The Real Estate (Regulation and Development) Act, 2016 (RERA) has brought significant changes to the real estate sector in India. It is a central law that seeks to protect the rights of property buyers, regulate the real estate sector, and establish a mechanism for the speedy resolution of disputes.
One of the most important aspects of RERA is the requirement of a development agreement between the builder and the buyer. A development agreement is a legal document that outlines the terms and conditions of the property development project and the responsibilities of both parties involved.
Under RERA, a developer must register the project with the regulatory authority and enter into a development agreement with the buyer before accepting any advance payment. The agreement must be in writing and registered with the regulatory authority within three months of signing.
The development agreement typically includes the following details:
1. Project Details: It must provide details of the project, such as the location, number of units, the number of floors, and the amenities.
2. Payment Schedule: The agreement must include a payment schedule that outlines the dates on which the buyer must make the payment and the amount to be paid.
3. Delivery Date: The agreement must specify the date by which the developer must complete the project and hand over possession of the property to the buyer.
4. Quality of Construction: The agreement must specify the quality of construction materials to be used, the standard of construction, and the regulations to be followed.
5. Penalties: The agreement must outline the penalties for delay in completion, non-compliance with building regulations, and other breaches of the agreement.
6. Grievance Redressal Mechanism: The developer must specify in the agreement the mechanism for addressing grievances of the buyer if any issues arise during or after the project.
Development agreements under RERA are designed to protect the interests of both buyers and developers. The agreement ensures that the developer completes the project on time and delivers the property as per the agreed specifications. On the other hand, it also protects the buyers from fraudulent builders who can take their money and not deliver the project as promised.
In conclusion, development agreements are an essential tool in ensuring a transparent and fair relationship between buyers and builders. With RERA providing a legal framework for such agreements, buyers can be assured of the quality and timely completion of their dream homes. Additionally, developers can build a reputation for reliability and quality, which can lead to greater success in the sector.