The Real Estate (Regulation and Development) Act, 2016 (RERA) has revolutionized the Indian real estate sector by introducing a new level of transparency and accountability. In Tamil Nadu, RERA has had a significant impact on property transactions, ensuring that buyers are well-informed about their purchases. This article explores the specifics of RERA, its effects on homebuyers, and additional content to provide a comprehensive understanding of this crucial legislation.
What is RERA?
RERA was established to protect homebuyers and encourage investments in the real estate sector by creating a more transparent and fair system. The act requires all real estate projects to be registered with the Real Estate Regulatory Authority before they can be marketed or sold. This registration aims to provide transparency in project details and ensure timely delivery.
Key Provisions of RERA
Carpet Area Definition: Under RERA, carpet area is defined as the net usable floor area of an apartment, excluding the area covered by external walls, service shafts, exclusive balcony or verandah areas, and exclusive open terrace areas. It includes the area covered by internal partition walls of the apartment. This standardization ensures buyers understand the exact usable space they are purchasing.
Transparent Pricing: RERA mandates that developers must charge buyers based on the carpet area, not the super built-up area. This provision ensures that buyers are not misled by inflated figures that include common areas, bringing fairness to the pricing of residential properties.
Project Registration and Details: All real estate projects must be registered with the state’s Real Estate Regulatory Authority. This registration includes providing detailed information about the project, such as layout plans, timelines, and approvals, helping buyers make informed decisions.
Regulation of Agents: Real estate agents must also register under RERA. This regulation helps monitor their activities and ensures they adhere to ethical practices in property transactions.
Timely Delivery and Compensation: RERA includes provisions for the timely delivery of projects. If there are delays, developers are required to compensate buyers. This provision aims to reduce project delays and ensure buyers get possession of their homes as promised.
Builders’ Practice of Charging Based on Super Built-Up Area
Despite RERA’s emphasis on carpet area, many builders continue to charge based on the super built-up area, which includes the carpet area plus a proportionate share of common areas like lobbies, staircases, and amenities. Here’s why this practice persists:
- Inclusion of Common Areas: The super built-up area accounts for shared spaces that all residents use. By charging for these areas, builders recover the cost of constructing and maintaining these communal facilities.
- Higher Revenue: Charging based on super built-up area typically results in higher overall pricing, which increases revenue for builders. This practice, although not aligned with RERA’s principles, is still prevalent.
- Industry Norm: The real estate industry has long followed the practice of selling properties based on the super built-up area. This norm continues despite RERA’s regulations.
- Buyer Perception: Some buyers perceive more value in having access to extensive amenities and well-maintained common areas, making them more willing to pay for the super built-up area.
Ensuring Transparency and Fairness
RERA aims to address these issues by making it mandatory for builders to clearly state the carpet area and ensure that buyers are aware of what they are actually paying for. This transparency is crucial in promoting fair real estate transactions. Buyers should always ensure that they receive clear details from developers regarding the areas included in their property’s measurement.
Conclusion
RERA has brought significant changes to the real estate sector in Tamil Nadu, ensuring that homebuyers are protected and well-informed. By standardizing terms like carpet area and mandating transparency in pricing and project details, RERA helps buyers make better decisions. While the practice of charging based on super built-up area persists, understanding the provisions of RERA can empower buyers to demand fairness and transparency in their real estate transactions. As the real estate market continues to evolve, RERA will play a crucial role in shaping a more transparent and accountable industry, ultimately benefiting homebuyers and promoting a healthy real estate market in Tamil Nadu.