Risks of Buying a Property Not Approved by RERA
While you are in the process of purchasing a property, the buyer must ensure that the project for which he is going to buy the property has received approval from the Real Estate Regulatory Authority or RERA. RERA is an authority that regulates the interests of buyers in India. Purchasing a property that is not approved by the RERA legislation exposes oneself to several risks and the following points will point them out.
Lack of Legal Recourse
The RERA registered project are developed with the help of licensed contractors, architects and consultants, which provides the buyer certain legal assurance. Whereas, non-RERA certified properties do not possess these compliances and this is why the buyers face the risk of exposure to fraud, delay, or even total abandonment of the project.
The buyers can only seek legal remedies for the refund if the property is RERA registered. This could lead to huge financial and psychological losses to the customers.
Quality and Compliance Concerns
RERA approved projects are required to undertake various regulations to fulfill all the important safety and construction guidelines. This includes material quality of construction, fire provisions, labor safety, and construction quality. On the other hand, non-approved properties lack some of the essential standards as far as compliance is concerned therefore have poor quality and even have dangerous structures.
Financial Risks
This implies that anyone who is buying a property is likely to loose a serious amount of money if they are investing in a property that has not been approved by RERA. RERA ensures provision of financial management that entails the maintaining a portion of the funds received towards the completion of the project. The funds account can only be accessed to further the interests of the project, and to ensure the fund is appropriately used in the development of the property. However, this check is not available in case of non-RERA approved projects. The buyer is always vulnerable to being exploited by the developer in non-RERA projects.
Moreover, properties that do not have the RERA certification may fail to realize some of the traditional financial advantages such as housing loan approvals, tax exemption or for instance, institutional funding. This may then lead to the over all cost of the property being slightly on the high side, including the interest rates for private finance lending institutions.
Resale Challenges
This also poses some risks in case one intends to dispose of his property at some time in future, more especially if that is not RERA registered. This is because the prospective buyers may be discouraged from purchasing a house that no approval since it may bring legal and financial problems in the future. This reduces the property’s value significantly, meaning once the owner wishes to sell the property, the chances of selling the property at best prices are very slim.
Conclusion
These are some of the critical risks to be considered when buying a non-RERA approved property, Precaution is better than cure in the sense that buyers should only invest in those properties that are RERA compliant as it will safeguard buyers’ rights, disallowing unscrupulous developers engaging in fraudulent activities.
Considering a dedicated sole selling agency such as SkylineSales would always be helpful. The sole selling agencies do the necessary due diligence, property background check, and legal compliance for you and guide you in decision making. Buyers and property developers are taking help of sole selling partners to leverage the benefit of dedicated support team, who not only takes care of sales and marketing, but also risks and compliance assurance for both the parties involved.
In case, if you are looking for any such sole selling partner, reach out to SkylineSales today!
