Personal Finance

Do your ‘home’work online

Meera Siva | Updated on December 02, 2018 Published on December 02, 2018

Use information available on RERA websites before deciding to buy a house

The Real Estate Regulatory Act (RERA) has been a great enabler for home buyers. The greatest benefit has been transparency — there is a lot more genuine information available about properties and developers. Unlike in the past, when buyers only got marketing and sales pitches from the developer, you now have free access to detailed data on projects and promoters. And home buyers can tap these resources quite easily to make a better decision.

Project details

The first and best source to look online is the RERA website of your State. All developers are required to register their projects and provide detailed information with the authority, which is published on the website. For example, the Tamil Nadu RERA website lists projects that have been registered. You can also see various approvals such as that for building and those given by the town planning authority. Project completion date and other project-related data — carpet area, number of units, land area, names and details of architect, structural engineer and contractors — are also readily available.

Another key data is information on the developer. A list of earlier projects done by them and any issues reported are accessible online. The site also gives quarterly status updates as shared by the developer, including updates on construction (with photographs) and sales. This can provide comfort to a buyer on how the project is progressing.

Non-filing of this report when it is due could be a warning sign of impending trouble. If you are buying the house through an agent, you can verify if the agent is registered with RERA.

Negative list

While deciding to buy, it also helps to look at the real-estate projects that have been rejected. While the reasons for rejection are not provided on the websites, it is good to check this list and make enquiries.

The RERA websites in nearly all the large States have a list of complaints filed — in English and/or in the regional language. These may be in various stages of processing — order passed, arbitration or just filed. You can verify if the builder has any pending complaints against them and the nature of the issue. Based on the details and the orders given, you can decide how comfortable you are on dealing with the developer. For example, if there are multiple complaints pending or they show bad intent, it may be good to exercise caution or avoid the developer.

Possible trouble

Going through the complaints and the final decision made on them can throw some light on possible issues home buyers may have to face. Karnataka and Maharashtra RERA websites, for instance, let you download all the orders passed on the complaints filed.

One issue that buyers may face is change of specifications after booking a house. In one instance, the carpet area of the house was changed, and the buyer got a refund when he wanted to withdraw. Another common issue is that of delays. The RERA Tribunal has noted that a home buyer cannot refuse to pay registration costs and taxes when the project is delayed, and must adhere to the payment terms of the agreement first. They can seek compensation if the building terms are not met fully.

Buyers may also have to themselves tackle and follow up on the false assurances given by developers. For example, in one case, the developer produced a completion certificate by the architect and an occupancy certificate when buyers lodged a complaint. The tribunal found these to be incorrect as the project was not yet complete; it ordered that compensation for delayed delivery be paid (interest calculated from the originally promised completion date).

There have also been cases where the developer had failed to disclose pending cases against them while registering a project. The RERA Bench instructed the developer to update the information, but only after a complaint was filed in this regard.

Buyers’ rights

The case facts and judgements throw light on the recourse available for home buyers. For example, in one case, a project was delayed as the developer hadn’t got environmental clearance. While this may seem like a situation where the buyer cannot seek compensation, the ruling stated that the developer was at fault and had to refund the amount paid with interest.

Likewise, another judgement noted that projects that received partial occupancy certificates when the Act took effect are also under the purview of RERA. The Haryana RERA Bench has noted that a buyer can approach authorities for redressal after project completion, too, even if the project is not registered under RERA.

Maharashtra and Tamil Nadu RERA have noted that even long-term lease agreements in which a substantial payment is made, are covered by the Act, just like purchases.

In Karnataka, a buyer wanted a refund of the deposit as he had decided not to go ahead with the purchase. The developer was asked to return the deposit amount.

The writer is an independent financial consultant

Published on December 02, 2018

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