Victory For Home Buyers!

Jayanagar-based developer 'Windmill Immovables Ltd' was ordered by the Bengaluru RERA Court to reimburse Rs.52,06,901 to the complainant Mr.Krishna Patil of Koramangala in connection with the 'Windmill' project.  Patil had filed a case against the builder stating that the carpet area in the flat he had purchased was lesser than what was initially promised by the builder.  The RERA Court heard the case on January 18, 2018. The Court also ordered an additional amount of Rs.18,19,547 as interest and tax amount paid by the buyer.

IT professional T Samarth was among the first few in the city of Bengaluru to be refunded his deposit of Rs.9,00,064 by Sri Krishnadeep Properties after he lodged a complaint with RERA.  He had paid the initial amount for a 1,400 Sq.Ft. house in Anjanapura.  Later he changed his mind as many of the amenities promised were absent and wanted refund.  He visited the builders office 10 times, but never got it.  The RERA court ruled in favour of Samarth!

Jaswinder Kaur and Malkiat Singh from Chandigarh were desperate when the Bank from which they had availed the Home loan started demanding Installments of repayment (EMI), although they had not received the possession of their first-ever flat. They had paid an advance amount of Rs.20 lakhs to the builder 'Frontier Homes' 3 years ago, for buying a flat costing Rs.2 crores. There was an inordinate delay in the delivery of the flat and the duo knocked the doors of the RERA court for remedy. The court decided in favour of the buyers, and ordered refund of the advance amount with interest!

(All the above three stories are real ones, but the names have been changed to preserve anonymity).

When one browses through the sites of RERA courts formed in different States, he can read many more such stories which provide great relief to the most vulnerable group of present and prospective home buyers.

Buying a home is every person's dream.  It is always a struggle between meager sources and the ever increasing cost of dream homes.  Added to this is the tricks played by unscrupulous builders who are ever-ready to exploit the hapless home buyers.  Therefore the long felt need of a level-playing rule was enacted by the present Government under the name RERA, Real Estate (Regulations & Development) Act 2016 which has become effective from  1st May 2017.

RERA is applicable to both on-going and new projects.  Projects covering area 500 Sq.mts or more and also buildings involving 8 apartments or more come under the purview of RERA.

10 major benefits of RERA

1.Standardized carpet area: 
RERA has prescribed a standard formula for assessing the standard carpet area of every property.

2.Rate of Interest on default:
In case of payment delay by the buyers or delay in delivery of possession by the builders, the rate of interest on default will be the same.

3.Remedy for false promises:
When there is a variation between what was promised and delivered, buyer can claim refund of the whole amount with interest.

4.Advance payment:
Builders can't seek more than 10% of the cost of the property as advance at the time of agreement for sale.

5.No diversion of funds by the builder:
70% of the money received from buyers has to deposited by the developers in a separate bank account.  This money can be withdrawn only for construction purpose of the specific project, that too on producing completion certificate from approved Engineers.  

6.Delayed possession:
In case of delayed possession, buyer is entitled to obtain refund of the entire amount with interest.

7.Defective construction: 
In case of defective construction, buyers can seek rectification within 5 years of taking possession. The defect has to be set right within 30 days free of cost.

8.Defective title:
In case the property title is proved defective, buyer is entitled to seek total refund of money with interest.  This right of the buyer is never barred by 'time limitation'!

9.Right to information:
Buyer is entitled to seek all information connected with the project from time to time.

10.Disputes resolving mechanism:
There will be a State appointed authority for looking into grievances of the buyers/developers who will decide the cases in shortest possible time.  There will also be an authority for hearing appeals against the orders of the former.

RERA is applicable to all residential and commercial projects. 

Also RERA registration is compulsory for real estate brokers and agents.  It seems even it applies to those who develop plots.

But we have witnessed many cases of one-to-one contracts of house construction wherein contractors have taken the most gullible house builders for a ride.  There is a need to bring such contracts also to the RERA fold.

2019-Good for home buyers!

Along with RERA, the newly introduced Insolvency & Bankruptcy Code (IBC) has also empowered home buyers.  Under IBC homebuyers also get same treatment as Banks while enforcing recovery of dues from builders. Moreover keeping General elections in mind, Government is in mood to show further reduction in GST for homebuyers.  Developers have now come to terms with the new realities which has ensured transparency and accountability. With nearly 7 lakh affordable and ready-to-move-in flats available for sale and ready availability of home finance, 2019 is going to be a good time for home buyers! 

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(Thanks to the sources of all pictures used in this blog)