Owning a home is every person’s dream. However, every one of us might not be able to afford a home with the increasing real estate prices and the comparatively low-income levels. To add to the problems, every builder had their norms due to the absence of standard norms. Previously, the practices followed by builders were different and they structured builder-buyer agreements in favor of the builder.
Buyers who invested their lifelong savings in buying real estate property had only limited rights. Therefore, to shield and defend the rights and interests of the buyers and to avoid exploitation of buyers by the builders and developers, the government enacted the RERA act. The introduction of RERA has provided many rights to home buyers and has also specified some rules that are to be followed by all developers and buyers. A few significant benefits of RERA are discussed below.
The carpet area, on the basis of which the developer determines the price of the property was not fixed before the enactment of the RERA act. This means that every builder will have their calculation of carpet area. For the same flats in Kochi or any other city in the country, one builder would calculate the carpet area as 1600 square feet and another builder would calculate the area as 1500 square feet. This happened due to the lack of a gold standard formula that enabled easy calculation of the carpet area. However, with the RERA act, this has been clearly defined and all builders have started to use the same formula to calculate the carpet area of an apartment, flat, or villa.
In accordance with the carpet area as specifically defined under the RERA Act, the computation is now standardized. This directly influences the prices of real estate properties. It is primarily because the builders charge based on the carpet area. The cost of a real estate property is calculated as follows:
Cost of property = Carpet area x Rate per square feet
Before the passing of the RERA act, developers and builders used to inflate the carpet area of real estate properties which increased the cost of properties. As the method to calculate the carpet are has been clearly defined by the RERA, builders, and developers will not be able to manipulate carpet area calculation to increase the cost of real estate properties, thereby preventing the exploitation of buyers by developers and builders.