The Real Estate (Regulation and Development) Act (RERA), 2016, has not only made the realty sector transparent but has also provided certain rights to the homebuyers. However, in order to strike a balance between the interest of the homebuyers and the developers, the Act also lays down the duties of the buyers.
Homebuyers have several rights and responsibilities specified under the regulatory act. While the Act has majorly been implemented to address the grievances of the aggrieved buyers, it also specifies certain responsibilities that a homebuyer needs to fulfil. With RERA authorities functional in almost all the States now, it is necessary for the homebuyers to understand these rights and duties in order to facilitate balanced growth and development of the sector. To apprise, an allottee as per Section 2 of the Act, includes a person who has purchased an apartment or a plot by way of transfer or sale. However, the definition does not include a tenant. Section 19 under Chapter 5 of RERA deals with the rights and duties of allottees.
Rights of homebuyers under RERA
RERA registration is applicable for buildings comprising more than eight units or development of land, measuring more than 500 sq m. The buyers purchasing an apartment or a plot, having the required measurements, can ask the seller for the RERA registration number and enjoy the following rights.
- Right to Information: The homebuyer, under RERA, is empowered to obtain information with respect to sanctions and layout plans, along with the specifications approved by the competent authority. Along with this, a homebuyer also has rights to have an insight about the amenities provided by the seller and stage-wise completion schedule of the project.
- Right to possession: A homebuyer has rights to claim the possession of the plot or apartment upon completion of the period, as agreed upon by the builder and as mentioned in the agreement of sale. Along with this, the buyers’ association is entitled to claim the possession of common areas, as declared by the promoter of the project.
- Right to refund: In a case where the builder fails to comply with any of the provisions related to RERA, a homebuyer has the right to file a complaint with the regulatory authority and claim refund of the amount paid, along with interest and compensation for breach of contract. The buyer can also claim compensation under Section 18 (2) of the Act, in case there is a defect in the property title.
In addition to the above, a homebuyer also has the right to seek necessary documents and plans from the developer post possession of the unit. In the case where there is a revocation of registration of real estate project, the Association of Apartment Owners holds the first right of refusal to complete the pending construction works.
Duties of homebuyers
Not only the homebuyers, but RERA also has provisions to protect the interests of the developers. For this, a homebuyer has been made responsible for:
- Taking the physical possession of the unit within two months of the issuance of occupancy certificate. The idea behind it is to reduce the number of unoccupied properties with the builder.
- Making payments on time, as mentioned in the agreement between the parties. Not only the principal amount, but a buyer is also responsible for paying the registration charges, municipal taxes, maintenance charges, ground rent, along with water and electricity charges.
- Paying due interest in case of non-payment or delayed payment of the amount as mentioned here above. The amount of interest, however, can be curtailed as mutually agreed between the developer and the homebuyer.
Other than the above, the homebuyers should actively participate in the formation of an association or cooperative society for the benefit of the residents. Registration of conveyance deed is another significant matter that requires active participation of the buyer.
What to do in case of a dispute between the parties?
In case there is a dispute between the builder and the buyer, the latter can approach the regulatory authority under RERA, depending upon the nature of the violation. Section 31 of RERA states that the complaint filed by the aggrieved party should mandatorily be in the form as specified by the respective State. It should clearly mention the complainant’s name along with the details of the developer, the relief sought, and details of the property purchased. However, the fees for filing a complaint differs from State to State.
In case the buyer is not satisfied with the decision of the authority, he or she can further file the complaint before the Real Estate Appellate Tribunal and then to the High Court within 60 days from the decision of the tribunal. In case a developer fails to abide by the orders, the homebuyers have the right to seek compensation in the form of refund along with due interest. They can even cancel the booking in case the developer fails to deliver the property within the stipulated time frame. As informed by Mukesh Jain, Corporate Lawyer and Founder, Mukesh Jain and Associates, “Section 40 (1) of RERA provides for recovery of interest, penalty, and compensation from the defaulting developer. As per the provisions, the penalty for non-compliance shall be levied daily, up to a maximum of five percent of the estimated cost of the real estate project. Additionally, the promoter can also be imprisoned for a period of up to three years or with fine on a daily basis, subject to a maximum of 10 percent of the estimated cost of the real estate project.”
The provisions of RERA are for the benefit of buyers and developers alike. The purpose behind is not to be biased towards a particular stakeholder, but to regulate the sector in a cordial manner.