Three years ago, my father bought a new house in an under construction building. It offered all the required amenities which my existing building lacked. We were all excited to move in to the new house. However, the builder had multiple on-going projects due to which the project was delayed and we did not get possession in time. Consequently, we had to sell off the house. We suffered a terrible loss! Our loss was compounded since we had bought the house on loan and interest added up. I can vouch that many buyers face a similar predicament.
Taking notice of such instances, the government has passed the regulatory Act, RERA (Real Estate Regulation and Development), 2016. This Act states that a buyer can refuse to take possession of the house due to undue delay on the builders’ part and consequently, he would be liable to pay the dues of the buyer till date with 10.9% interest rates. Also, 70% of the project money accrued with the builder needs to be maintained in a separate account and the funds from this account can be withdrawn by the builder only for the current project. These would severely restrict the builders to start multiple on-going projects with the buyers’ money and thereby safeguard buyers’ interest.
I can tell you from my observation and experiences of other people over the years, that the builders have siphoned money from the buyers in disguise. This Act would now ensure that such siphoning of money would not happen and also the buyers would be completely aware about the project details online on RERA website which includes the details about number of houses sold, layout plans, agents, etc. Further, this Act restricts builders to change the layout plans without the permission of two-third buyers and ensures that the buyer pays only for the carpet area
The Act has also made the builders liable to rectify any structural defects that are noticed within five years of handing over the possessions to the buyers, thus making sure the builder uses the right quality of building materials and works efficiently without deceiving the buyers.
To conclude we can be assured that, in this era of globalization and ease of doing business as exhibited by Urban Redevelopment Authority of Singapore https://www.ura.gov.sg/uol RERA shall be the first definitive step towards bringing transparency in highly unorganized Real Estate Sector.