The year 2017 has been full of positive changes for home buyers, whether it’s reducing the Home Loan interest rate to as low as 8.5%, or launching affordable housing schemes for Indian citizens (such as PMAY). Recently, the Government of India has taken one more interesting step to bring a smile on the faces of home buyers – implementation of RERA Guidelines.
The Real Estate (Regulation and Development) Act 2016 (RERA) has come into effect on 1st May this year to regularize the real estate industry. Earlier, many sold and purchased properties used to go unregistered. The buyers had to face a lot of troubles due to lack of proper regulations concerning this issue. With the implementation of RERA guidelines, every new and existing project of all the real estate developers must be registered under its State RERA. RERA intends to protect the interest of home buyers and improve transparency in the Real Estate market.
If you have purchased a house and taken a Home Loan or planning to avail one in the near future, here is how RERA can impact you:
• All new Home Loan customers have to check RERA compliance with their developer. Banks will approve and disburse loans to only those builders who have registered their projects under RERA.
• The existing Home Loan customers also fall under the purview of RERA Act. A tranche demand raised by the builder will not be disbursed by the bank if the project is not approved by RERA. If the banks deny you Home Loans, you might have to pay heavy penalties to the builders for late EMI payments. So, make sure to ask your builder if your property is registered under RERA or not, and if it isn’t, get it done immediately.
The new RERA rules have been notified by many states and union territories, and the remaining ones are also in the process to do the same in the coming weeks. These guidelines will be pertinent for every new buyer of a residential as well as commercial real estate, except following projects:
• Where the area of land is 500 sqmt or lesser.
• Where the number of units, including all phases, is eight or lesser.
• Where the developers have obtained the occupancy or completion certificate on or prior to 30th April 2017.
It is mandatory for every project to register and comply with the RERA guidelines (if they haven’t already).
As per the new RERA guidelines, all new and WIP projects have to be approved under RERA and the buyer has to procure the following additional documents from the developer on duly stamped and signed letterhead:
• RERA Certificate containing the concerned project’s RERA registration number.
• RERA verified Account Details of the concerned project, duly signed and stamped by the Developer on the developer’s letterhead. All home loans for this project will be disbursed by the bank into this account only.
Under the new RERA regulations, Banks (in consultation with Reserve Bank of India) have decided not to offer loans to the WIP and new building projects that are not registered under RERA. The decision is expected to weed out all the unreliable builders from the real estate market. If you have obtained a Home Loan to buy a new house or if you are repaying Home Loan for an existing home purchase, don’t forget to check with your builder if it’s RERA approved or not. If it isn’t, get it done as soon as possible for smooth Home Loan repayment and getting a hassle-free ownership of your home.
If you’re planning to get RERA compliant Home Loans at affordable interest rates, talk to the Mortgage Specialists of MyMoneyMantra today. Our experienced Home Loan professionals have an expertise of more than 30 years, so they can guide you perfectly regarding Best Home Loan Offers and help you get the most suitable one.
Also Read: 5 Best Home Loan Providers in India
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