Recently, cheating has been on the rise in the pre-launch sales of projects. To checkmate such activities, the Telangana State RERA has been working hard. However, some fraudsters are out to cheat the gullible public on the pretext of pre-launch sales offers.
Such a situation could lead to investors getting caught up in fear of psychosis. How is the fraud perpetrated under pre-launch sales? How can the public save themselves from such fraud?
In fact, the builders of such pre-launch projects would demand the customers give them cheques without specifying the price of the project, the area of the flat, the total area of the site, the number of floors to be built, the floor area ratio, the location of the project, and so on. It was atrocious.
The investors would not be able to make any decisions in the absence of complete transparency. Some developers would give priority to those customers who paid them in full in advance and allot them units to create fear among the investors that they would miss the project provided they did not give the cheque in full in advance.
They make false promises of earning the highest income on their investment. Some other developers are marketing projects not approved by the RERA. Such measures are violative of the RERA rules and would also cause immense losses to investors. To checkmate such activities and safeguard the interests of investors, the RERA has been created.
What does the RERA do?
Safety of funds: It provides security to the money of the investors by insisting the developer deposit at least 70 percent of the investors’ funds in a special account. The money should be used for buying land, construction activities, and other relevant expenses. It would lay down that the funds should not be diverted to meet other purposes.
Transparency: Builders are required to submit original project documents. In the event of any changes incorporated into the project plan, RERA permission should be secured for this. Depending on the carpet area of the project, the builder should sell the unit, but not depending on the super-built-up area.
In the event of a delay in the execution of the project, the buyers are eligible for a full refund. Otherwise, they can continue with the project and get some money from the builder in the form of fines.
Assurance to quality: The builder is required to solve problems that crop up to five years from the date of purchase of the project. Within 30 days of lodging the complaint, the problems should be rectified.
Compulsory registration: The developers should not give publicity to their project without first registering their property with the RERA. They should not sell the units without RERA registration, and they are also prohibited from building the project without registration. The RERA registration number should be displayed on the project’s advertisements.
If the builders violate the RERA rules, the RERA is authorised to take stringent action against them. The penalty for not registering the project with the RERA would be 10% of the cost of the project. The RERA prohibited real estate agents from taking part in transactions for projects not registered with the RERA. In spite of placing so many curbs, there is no end to the pre-launch sales for the projects. Therefore, the RERA is required to play a more proactive role. At the same time, investors are cautioned to tread carefully. They should verify all details before investing in any project. The RERA insists that all investments should be made in tune with the RERA Act.
