Purchasing a dream home is a significant milestone for many individuals, but the real estate sector has often been marred by a lack of transparency, delays, and other unfair practices. To protect the interests of home buyers and instil confidence in the real estate market, Karnataka introduced the Real Estate (Regulation and Development) Act, 2016 (RERA). This progressive legislation has revolutionized the home-buying experience, bringing in a host of benefits for buyers seeking their dream abode.
Let’s explore how Karnataka RERA empowers home buyers and ensures a fair and transparent home-buying process.
Transparency and Accountability
One of the essential features of Karnataka RERA is the increased transparency and accountability it brings to the real estate sector. Developers are now required to register their projects with all relevant details on the official RERA website, including project plans, approvals, timelines, and contact information. This ensures that buyers have access to all necessary information, making their decision-making process more informed and secure.
Mandatory Registration for Projects:
Karnataka RERA mandates that all commercial and residential projects, where the land is over 500 sq. meters or includes apartments and is under construction, must be registered with the regulatory authority. This process ensures that projects are brought under scrutiny, promoting transparency and reducing the risk of fraudulent activities.
Standalone Project Registration:
Every phase of apartment development is considered a standalone real estate project, requiring separate registration. This approach enhances the accountability of developers and enables buyers to access project-specific information with ease.
No Changes Without Written Consent:
One of the essential features of Karnataka RERA is that the developer cannot make any changes to the project plan without obtaining the written consent of the buyer. This provision protects buyers from any unilateral modifications by developers after the sale agreement is signed, ensuring that they get what they were promised.
Timely Delivery:
Karnataka RERA takes timely project completion seriously. Developers are bound to provide a committed timeline for project delivery at the time of registration. In case of any delays, the developer is liable to pay interest on the amount paid by the buyer. This measure not only ensures accountability but also encourages developers to adhere to the stipulated timelines.
Limit on Advance Payments
To protect buyers from undue financial risks, Karnataka RERA restricts developers from asking for more than 10% of the property’s cost as an advance before the sale agreement is signed. This measure prevents developers from taking substantial payments without formalizing the sale contract, safeguarding the interests of home buyers.
Escrow Account Protection
Karnataka RERA mandates that developers must deposit a minimum of 70% of the amount realized for the real estate project by the investor and the buyer into a separate escrow account within 15 days in a scheduled bank. This fund is reserved solely for construction purposes, reducing the chances of fund diversion and ensuring timely project completion.
Clear Carpet Area Disclosure
Karnataka RERA mandates that the carpet area must be mentioned in the property brochure. This ensures that buyers are aware of the actual usable space they will get, enhancing transparency in property transactions.
Compensation for Delays
One of the major concerns for home buyers has been project delays. However, under RERA Karnataka, if a project is delayed, the buyers are entitled to get all their invested money back, or they can opt for returns of the invested money from the developer. This provision ensures developers stick to their committed timelines, protecting buyers from unnecessary delays.
Defect Resolution and Long-term Warranty
Karnataka RERA takes responsibility for project quality seriously. The builder is accountable for any issues related to the project up to five years after the purchase, and any defects brought to their notice within this period must be rectified within 30 days. This long-term warranty ensures that buyers have peace of mind regarding the quality and maintenance of their homes.
Grievance Redressal Mechanism:
Home buyers can approach the Karnataka RERA body to seek redressal of their grievances. The RERA authority serves as a reliable platform for dispute resolution, saving buyers from prolonged and costly legal battles.
Strict Enforcement and Penalties
To ensure compliance, RERA Karnataka enforces strict penalties for developers, buyers, and agents in case of violations. Any violation of the Act may result in 1-year imprisonment for agents and buyers, and developers may face imprisonment for three years. These penalties act as a strong deterrent against fraudulent practices and non-compliance.
Penalties for Non-Registration
Developers who fail to register their projects with RERA can face penalties of up to 10% of the project cost. Repeated violations may even lead to severe consequences for the developer.
Karnataka RERA has significantly transformed the home-buying landscape, empowering buyers with transparency, protection, and a robust grievance redressal mechanism. With mandatory registration, clear disclosure, and strict adherence to timelines, RERA has redefined the relationship between buyers and developers, creating a win-win situation for all stakeholders. As the real estate market gains credibility, home buyers can invest in their dream homes with confidence, knowing that their rights and interests are well-protected under Karnataka RERA. With enhanced transparency, strict regulations, and accountability, Karnataka RERA has emerged as a game-changer, revolutionizing the real estate sector for the betterment of home buyers.
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