Homes and gardens

Buying an apartment in the RERA era

Purchase and maintenance, role of owners’ welfare association, and other issues from a home buyer’s perspective. By K. Sukumaran

Here is an attempt to flag some of the critical problems a home buyer may have to face in the present scenario of Real Estate (Development & Regulation) Act and RERA rules in force.

The pre-buying exercise

While in the past, reliability, location, quality, price and past performance of the builder used to be the basic issues a buyer had to grapple with, followed by obtaining loan on favourable terms, today the Regulator being in place, the key issues have shifted to:

Reference to the Regulator’s website for details of registration of the builder

See the registered information on the project as stated in the relevant section of the Regulator’s website

The builder’s standing as stated in the registration as an assurance to performance

Any penalisation faced by the builder in the past as prescribed in the Act and Rules, to ensure compliance

The post-buying issues.

Maintenance of the apartment complex and facilities like power, water, and solid waste management are to be the focus in the ‘second half’ of the deal. The arrangement for setting up Owners’ Welfare Association, adoption of byelaws, election of office-bearers and registration of the Association with the Registrar of Societies are essential for smooth transition of maintenance work from builder to owner. The responsibility of running the Welfare Association in many cases is a ‘thankless job’ but this has to be in safe hands. Many owners are found to be defaulters in payment of maintenance fees. Maintenance is a casuality especially in small projects developed by overnight promoter-builders.

Role of Owners’ Welfare Associations

These Associations are registered under the Societies’ Registration Act and come under the Registrar of Societies’ jurisdiction. There is hardly any supervision on their day-to-day functioning except filing a return annually when a renewal of the registration is done. These requirements are dealt with in a routine way unless some financial or criminal irregularities are noticed. No Owners’ Association normally enforces its powers to cut off electricity or water supply to reign in recalcitrant owner members/tenants.

Post-audit of compliance with rules and regulations.

While the real estate regulator may only go by the letter of the RERA Rules, rarely we may find a bureaucratic set-up going out of the four walls of it. However, if the Rules can be interpreted to include ‘post audit’ of implementation of ‘welfare and protection’ of the rights of the home buyer, putting in place a ‘compliance audit’ for both construction and maintenance, it will really be good for the real estate sector, especially the apartment housing segment.

The Apartment Owners Welfare Associations are more than Residents’ Welfare Associations, they are also protectors of law for a vital sector, coordinating with the builder and the regulator. The success of the RERA is essential for the proper growth and quality of the sector.

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Printable version | Feb 19, 2020 2:15:22 PM |

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