Perspective

RERA seeks to bring clarity and fair practices that would protect the interests of buyers and also impose penalties on errant builders. Here is how it intends to solve the most pressing concerns of NRIs looking to purchase property/properties in India.

1. Assured, Timely Delivery of Property:

Before RERA, builders invariably failed to deliver their projects on time, because they would either divert the funds to another project, or they would sell the projects without following the necessary statutory regulations. Such delays led to price escalations, which would lead to buyers being on the losing end of the transaction. After RERA, it is now mandatory for the builder to keep 70% of the buyer’s money in a separate account.

The money from this account will be used solely for the construction of the buyer’s property. If the builder fails to deliver the project on time, he will be liable to pay the money back with attached interest.

RERA has also declared that developers will not be able to ask more than 10 percent of the property’s cost as an advanced payment booking amount, before actually signing a registered sale agreement.

2. Transparency:

Builders will no longer be able to withhold essential information from buyers, nor will they be able to deviate from the project by compromising on essential amenities and space. RERA has made it mandatory to furnish all the relevant information about the project on the builder’s website as well on the RERA website. This information includes:

• Layout plan with specifications of the project
• Number of homes for sale
• Government approvals
• Status of land title
• Details of all the intermediaries
• Subcontractors names
• Schedule for completion (deadlines)
• Payment schedules
• Project updates

Once a project has been approved, the builder will not be allowed to make any changes without the written consent of at least two-thirds of the allottees. All the details provided by the builder will have to be certified by a Chartered Accountant.

Most importantly, the NRI buyer will be able to access all the information related to the project he/she has invested in by accessing the website. No longer will an NRI buyer have to worry about following up with the builder incessantly.

3. Quality of Projects:

RERA will provide protection to buyers for 5 years from the date of possession in this respect. If the buyer highlights any problems to the regulator in this period, including in the quality of construction and the provision of services, the property developer will have to rectify the same within 30 days.

4. Legality of Projects:

Property developers will not be able to advertise, sell, offer market or book any plot, apartment, house, building, investment in projects, without first registering it with the regulatory authority. Furthermore, after registration, all advertisements inviting investments will have to bear the unique RERA registration number. The registration no. will be provided project-wise. This will ensure that the projects NRIs invest in are legal.

Besides RERA, there are other policy changes that will also resolve the issues that NRI investors face when purchasing property in India.

The Benami Transactions (Prohibition) Amendment Act, 2016 has been formulated to deal with “benami” transactions - transactions where the property is owned by one person and paid for by another, or a property purchased under a fictitious name. All such properties will be confiscated by the central government. For NRI investors, this Act will bring in more clarity in terms of ownership, or title of a property.

Similarly, the GST (Goods And Services Tax) aims at eliminating the difference in indirect taxes applicable across various states in India, by introducing a single-tax regime. The existing channels include issues of multiple taxations amounting to indirect taxes and no uniformity.

The introduction of the above-mentioned policies in India definitely aims at making it easier for an NRI to invest in property in India. However, the challenges faced by an NRI owner don't end there. Managing and maintaining the property/properties from abroad can also be an immense challenge. What NRI owners need is a solution to their property management woes - A Property Management Service!

Property Management services are designed to take care of all the daily operations of an NRI’s real estate investments. The property manager, or a real estate portfolio manager, assigned by the service will handle it all - right from the upkeep of vacant properties, to handling the ones occupied by tenants, from dealing with tax-related and legal issues to the periodic inspection and maintenance of the properties.

If you are looking for a dependable, real estate portfolio manager - Get in touch with Homzhub today!