RERA vs. Non-RERA Projects: Key Differences Every Homebuyer Must Know



We all know how important home investment is for us and we also understand how daunting the complexities of real estate projects sound. But after the  Real Estate Regulatory Authority (RERA).  RERA, introduced in India in 2016 the real estate market has changed. RERA has brought transparency and accountability to the real estate sector, which is important to protect homebuyers and it also helps the developers in gaining lots of projects. 


But how has everything changed because of RERA and what is the difference between RERA and non-RERA projects? Understanding these differences is so important for all homebuyers to make informed and wise decisions for their real estate property. 

What is RERA?

The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, is a landmark legislation that establishes a regulatory framework for the real estate industry.  It mandates the registration of real estate projects with the respective State RERA authorities

Key Differences Between RERA and Non-RERA Projects:

Transparency and Disclosure:

  • Non-RERA Projects 

The information in the non-rera projects wasn't visible and there were no regulations so real estate agents got the chance of lying and misinterpreting things according to their ease. This lack of transparency can lead to uncertainties and potential risks.

  • RERA projects 

The rules and regulations of the RERA Act clearly state that clients can ask for any details of the project. Developers have to share all the information about the project, including approved plans, layout, land title, construction schedule, and financial details, on the RERA portal. This act of disclosing information enhanced trust in the real estate market and real estate agents.  

Timely Completion:

  • RERA Projects

RERA mandates developers that they have to provide timestamps for the whole project progress and they have to follow all these timestamps within the declared period.  The delays can cause penalties, and this will also shake the trust of clients from the developer.  Developers are required to deposit 70% of the collected funds in a separate escrow account, which can only be used for the construction and development of that specific project. This is essential for maintaining financial transparency and avoiding all possible financial disputes. 

  • Non-RERA Projects

Project delays are a common issue in non-RERA projects, and homebuyers often have limited legal recourse in such situations.  There is no mandatory escrow account, increasing the risk of fund mismanagement.

Quality of Construction

  • RERA Projects

The RERA completely takes charge of construction quality, and the increased transparency and accountability encourage developers to the standards that they promised at the beginning of the deal. 

  • Non-RERA Projects  

The fear and concern of quality work are continuously daunting throughout the project due to the lack of any set of regulations. 

Grievance Redressal

  • RERA Projects

RERA provides a dedicated grievance redressal mechanism for homebuyers. They can take action against the developer if they have done any unethical practices in the project. Moreover, the RERA authority has also introduced penalties for creating unnecessary disputes. 

  • Non-RERA projects 

The procedure of resolving issues in Non RERA Projects is complex due to the lack of clarity and involvement of other legal agencies. 

Booking Amount:

  • RERA Projects

RERA restricts developers from accepting more than 10% of the total property cost as the booking amount before the execution of the registered agreement for sale. This protects homebuyers from paying large sums upfront without any legal documentation.

  • Non-RERA Projects

Developers in non-RERA projects may demand a higher booking amount, putting a greater financial burden on homebuyers.

Agreement for Sale

  • RERA Projects

RERA mandates a standardized agreement for sale, which clearly outlines the terms and conditions of the transaction, protecting the interests of both the buyer and the seller.

  • Non-RERA Projects

The agreement for sale in non-RERA projects may be biased towards the developer, potentially leaving home buyers vulnerable.

Conclusion

RERA has brought about a paradigm shift in the Indian real estate sector, empowering homebuyers and promoting ethical practices among developers.

While non-RERA projects may seem tempting due to potentially lower prices, the peace of mind and security offered by RERA-registered projects far outweigh the perceived cost benefits.


By understanding the key differences between RERA and non-RERA projects, homebuyers can make informed decisions and safeguard their investments.


Always prioritise transparency, verify project details, and exercise caution before investing in any real estate venture. Contact RERA Vision to get an Expert RERA Advisory Consultation

Comments

Post a Comment

Popular posts from this blog

RERA Project Timeline Extensions: How to Apply and Maximize Your Chances of Approval

Image
In the fast-moving real estate industry, project delays are a common occurrence as a result of numerous factors, ranging from financial constraints and regulatory impediments to unforeseen circumstances like weather conditions.  The Real Estate (Regulation and Development) Act, of 2016, also known as RERA, was legislation to bring greater transparency, accountability, and efficiency in the real estate sector. As RERA is meant for the protection of home buyers, it also acknowledges that delays can occur by allowing developers to apply for an RERA project timeline extension . In this blog, we will take you through the process of how to apply for a RERA project timeline extension and share expert tips on how you can increase your chances of getting your extension approved. As a developer, no matter where you are in Mumbai or any other place, it is important to know what steps to take and what legal requirements to follow to maintain your project’s credibility and avoid penalties. Unde...
Read more

Why Real Estate Agents Must Prioritize RERA Registration in 2024

  RERA quarterly compliance is one of the most important factors that play a significant role in the real estate market. RERA ensures the transparency of project funds and other details and accountability in project management. Under the Real Estate (Regulation and Development) Act, 2016, developers must submit regular reports specifying project progress and financial discipline.  RERA quarterly compliance not only protects consumer interests but also enhances the credibility of developers in a competitive market. By following all the regulations mentioned in RERA, developers can build better relationships with their clients, which also increases their word-of-mouth marketing. Moreover, avoiding legal disputes is a significant task in the real estate market. With this blog post, we will try to understand why Prioritizing RERA quarterly compliance is essential for sustainable growth and success in 2024. Legal Compliance Projects with an area of more than 500 square meters or m...
Read more