RERA or Real Estate Regulatory Authority was established under the Real Estate (Regulation and Development) Act was first commenced on 1st May 2016. However, on 59 out of 92 sections of the Act was enacted on this date and the rest were commenced exactly one year later on 1st May 2017. The Real Estate (Regulation & Development) RERA Act was introduced to address and solve the concerns of builders, brokers, home buyers and other stakeholders of the Real Estate Sector.
What is RERA?
The Real Estate (Regulation & Development) Act, 2016 is an act of the Parliament of India that strives for protecting home buyers and helps escalate the investment made in the real estate industry. The (RERA) Real Estate Regulatory Authority was established under this Act to regulate the real estate sector. Additionally, it acts as the adjudicating body for faster dispute resolution related to the real estate industry.
What is the need of RERA?
Under the Real Estate (Regulation & Development) RERA Act, numerous RERA committees have been set up across the country to promote uniformity and transparency in the real estate sector. Additionally, it was founded to regulate the real estate industry.
With Real Estate Regulatory Authority in effect, every builder or developer has to inform home buyers of the progress of construction, offer the keys to their property by the mentioned date, and abide by every rule outlined by RERA, to ensure accountability.
Key benefits of RERA
RERA has brought about many positive changes in every facet of the real estate industry.
The list given below are some of them;
- RERA aims to reduce project delays and to mis-sell the properties. To ensure that, authorities have made it obligatory for all builders/ developers to carry out RERA registration before they start any project.
- The RERA has been sub-divided into smaller regulatory bodies, each of which looks after the real estate development in a particular state or union territory in India.
- The policies of Real Estate Regulatory Authority are applicable to both residential and commercial properties
- The regulations brought about by RERA aims to protect the interests of buyers and developers similarly.
- The RERA has brought about more accountability and transparency within the real estate industry.
Impact of RERA on Homebuyers
The RERA holds many benefits for homebuyers in a number of ways as follows;
- With the implementation of the RERA’s rules, builders have to release every detail of the project they have undertaken on the RERA’s official website. Also, more importantly, they need to update the details on a regular basis. In like manner, this keeps the buyers updated about the project timelines and increases transparency regarding the same.
- As per RERA rules, you need to pay for the property based on the carpet area. Additionally, the Builders cannot charge you for the super built-up area, which includes balconies, lifts, lobbies and stairs.
- Developers/ Builders have to put 70% of the money they collect from homebuyers into a separate bank account, which they are only allowed to use for the construction purposes.
- RERA pays attention to the timely completion of projects. Additionally, any delay means that the developer has to pay you (the home buyer) interest of 2% over SBI’s MCLR for the period of delay.
- Also, when you get a handover, you can report constructional defects for up to 5 years and have the builder rectify them for you.
- Furthermore, Developers have to resolve disputes with buyers within 120 days of it were filed.
- The builder or developer cannot make alterations or additions to the building plan without informing two-thirds of the owners about such a change. Also, it can only proceed if a majority of homebuyers consent is provided.
- The Act prohibits builders from taking more than 10% as advance from homebuyers.
- In case of the time of possession, you discover a discrepancy in your title deed, and you can immediately ask for compensation from the developer.
Impact of RERA on Real Estate Agents
After the launch of the Real Estate Regulatory Authority, builders and developers have to be more transparent with the home buyers;
- All projects exceed an area of 500 sq. Mt. or is more than eight apartments must be registered with the respective state Real Estate Regulatory Authority.
- Also, it is compulsory for builders to deposit 70% of the project amount collected from the homebuyers in bank accounts through cheques. Also, it means the builders can no longer engage in fraudulent transactions or money laundering.
- There has to be a sale agreement between all builders and homebuyers as prescribed.
Read our article:RERA Complaint or Consumer forum (NCDRC): Which is better?
RERA in different states of India
RERA Karnataka, RERA Delhi, RERA West Bengal, RERA UP, RERA Punjab, RERA Goa and so on.
Projects under RERA
All the states and union territories comply with RERA, and all real estate projects come under its purview. Furthermore, these are the conditions under which a project can be registered under RERA;
- Projects do not hold completion certificate but were completed or had finished construction before the commencement of the (Real Estate Regulatory Authority) RERA Act.
- Furthermore, the projects that have undertaken construction for the purpose of renovation, repair or re-development. Additionally, projects which are not marketing, re-allotting, advertising, selling or allotting any apartments, plot or building, will not come under the purview of RERA.
- Also, projects that are under construction have to report each phase of construction as a standalone project through a fresh RERA registration.
As a home buyer, it is important for you to select a RERA registered project so that you make a safe investment and eliminate any possible losses.
How can you register projects under RERA?
Follow these steps if you wish to register a project under RERA Arunachal Pradesh, RERA Sikkim, RERA Haryana, RERA Kerala or any other state;
- Open a bank account as specified by Section 4 (2) (I) (D) of the RERA Act and then accumulate all the necessary documents.
- Then, fill and submit Form A, the form specified for RERA registration. Furthermore, being a promoter or agent, you will also need to submit Form B, declaring your role within the real estate sector.
- Also, you may have to submit other forms as per Real Estate Regulatory Authority guidelines to further clarify your project’s purposes.
- Furthermore, you need to pay the RERA registration fees to complete the registration procedure. This amount is different in different states of India.
- Once registered, you can use the RERA number allotted to you, for procuring the project and for all future communications.
Filing complaints under RERA
Under the Section 31 of RERA, 2016 the Complaints can be filed by the aggrieved parties to the adjudicating officer or the Real Estate Regulatory Authority(RERA Act). These complaints are generally against the real estate brokers or agents, allottees or the promoters. The regulations of the State Government already have the complete procedure and form granted for applications in this regard.
All the complaints are to be in the prescribed form according to the concerned rules of the States. With respect to Uttar Pradesh or the Chandigarh, we have the Forms M or N. This can be filed for all the projects under the RERA registration within the prescribed time period in case of any contravention or violation of provisions or rules under RERA. Other offences (with exception under Sections 14, 12, 18 and 19 of the complaints) can be filed to the authority of RERA.
Penalties that apply under RERA
The penalties that are applicable under the RERA framework is given below –
|Section Applicable||Type of Offence||Penalties that apply|
|Section 9 (7)||Securing of registration via fraud or breach of terms or misrepresentation||Number of Agent Registration will be revoked.|
|Section 62||Contravention of Section-9 & Section 10||Fine of Rs. 10,000/- each day for the default period Extending up to 5% of unit cost|
|Section 65||Contravention of orders by RERA authorities||Penalty up to 5% of unit cost|
|Section 66||Contravention of Appellate tribunal orders||Imprisonment up to 1 year or Fine that extends up to 10% of unit cost|
Equally, buyers too have to abide by the guidelines of the RERA. Furthermore, if you’re found guilty of non-compliance, you will have to pay a daily penalty which can be up to 5% of the approximate cost of the project. Then again, non-compliance with the Appellate Tribunal can lead to imprisonment for up to 1 year, or 10% of the project’s probable cost, or both.
Before the establishment of Real Estate Regulatory Authority (RERA Act) , there was no authority or body which was responsible for regulating or providing guidelines regarding the real estate sector. However, with the commencement of the Real Estate (Regulation and Development) Act, 2016, everything fell into its place, and new rules were set up. The real estate sector was made more transparent from the ends of builders, developers and brokers for the home buyers.
Read our article:Everything You Need to Know Regarding the RERA