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How does RERA protect home buyers from delayed possession
How does RERA protect home buyers from delayed possession
Here are certain provisions of the RERA Act to protect home-buyers against delayed possession by developers.

One of the most common grievances that home-buyers have always had has been that of delayed possession. Earlier, buyers had to make frequent court visits to realise what was promised. But the implementation of RERA has put home-buyers in an advantageous position.

The RERA act has some important provisions to make developers accountable to buyers and the regulatory authority.

Written affidavit

One important provision is that the possession date promised by the developer will have a legal status to it. Along with the other documents, the developer is required to give a declaration (supported by an affidavit) stating the time period within which the project, or a specific phase of the project, will get completed.

Mention possession date in the agreement

The RERA Act aims to leave home-buyers in a more informed and aware position. It requires the developers to mention the exact date of possession in the agreement of sale of the housing units. This would ensure that the buyers enter the agreement completely informed. Moreover, the agreement must also mention the rate of interest in case of any defaults.

Clear land title

Sometimes it happens that buyers discover at later stages that the land on which the project is being built is involved in a dispute. A dispute of any kind leads to delays in construction, and consequently, in possession. The act requires developers to provide a written affidavit stating that the legal title is authenticated by legally valid documents.

Encumbrance-free title

There have been cases where home-buyers booked a house in a project, unaware of the legal/financial liabilities attached to that land. To avoid this, RERA demands the developer to provide a written affidavit (or encumbrance certificate) that the land is clear of all encumbrances. The developer may be unable to legally transfer title to the property in case of pending liabilities. Moreover, home-buyers would need the EC while applying for a home loan.

Separate account for construction

One common excuse for delayed possession is lack of sufficient funds to complete the construction. Earlier, there was no proper way to check how developers utilised all funds. But, with the implementation of RERA, buyers can rest assured that their money is being utilised for the construction of their project only. As per RERA, 70 per cent of the payment amount from the buyers for a particular project shall be deposited in a separate account in a scheduled bank. This amount can be used only to cover the construction and land cost of that project. All withdrawals from this account should be in accordance with the completion process. An engineer, an architect and a chartered accountant need to audit it every six months.

In case a developer does not adhere to the rules, he will not only lose the RERA registration of his project but may also be punished by imprisonment (up to three years) or with a fine up to 10 per cent of the estimated project cost. If the promoter's RERA registration is cancelled, the buyer has the right to a refund.

In case the developer defaults or delays the possession (as stated in the agreement of sale), the buyer has the right to a refund of the amount along with the interest. But, if the buyer does not want to withdraw from the project, the developer will be liable to pay interest for every month of delay.

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