RERA Registration is necessary for promoters, builders and real estate agents to be able to sell, advertise, market, purchase or book housing properties. Furthermore, the entitled persons need to make an application in the prescribed form along with the supporting documents and fees. In this article, we are going to learn how to obtain RERA Registration from the builders’ perspective.
Who Need to Apply for RERA Registration
The following people or group of people is entitled to obtain RERA Registration;
- Any person who constructs or wants to builds an independent building or a building consisting of apartments.
- Or an individual or entity involved in modifying existing apartments for the purpose of selling it further to somebody
- Anyone who develops the land into a project, to sell projects to other people
- Any development authority/ public body in respect of allottees of Buildings or plots constructed by such authority or public body on which owns land or placed at their disposal by the government
- Development authority owning plots or which is placed at their disposal by the government to sell the apartments
- A state-level cooperative housing finance society or a primitive cooperative housing society which constructs the buildings for its members
- Anyone who acts himself as a builder, contractor, developer, colonizer, estate developer or by any different name or
- A person who claims to be the holder of a power of attorney from the owner of the land or have the legal possession of the land or property on which the building or flat is constructed or a plot is developed for the purpose of sale
Benefits of RERA Registration
Given below are some of the benefits of registering under RERA or Real Estate Regulatory Act, 2016[1];
- Timely delivery
Previously it was seen that the builders or developers often used to make false promises about the completion date of a project, but hardly delivered on time. As per the Act, strict regulations will be enforced on builders to make sure that construction runs on time and flats are delivered to the customers within the decided time. Additionally, if the in case the builder is not able to provide the apartments on time, he/she becomes liable to refund the amount to the purchaser with interest.
- Delivery of Accurate Project Details
Builders need to promote their projects, defining various amenities and features related to projects in the construction stage. As per the Act, the builder cannot make any changes in the projected plan. And if a builder is found at fault then, he/ she will have to pay 10% of the project’s expenses or face jail time up to three years.
- Ensuring all permissions
Developers often attract buyers by providing huge discounts and pre-launch offers. Therefore, the buyer, enticed by the proposals, does not bother about the clearances and book or buy a property. But, due to delays in getting approval, the buyer does not get the flat on time. This bill ensures that builders get all the permissions before selling the apartments.
- Ensuring Proper Structure
It is the builder’s responsibility to repair structural defects for up to five years if a buyer finds any fundamental insufficiency in the development of the building
- No Advertisement is permitted without RERA Registration
Promoters are not allowed to advertise any project without RERA registration with the Real Estate Regulatory Authority established under this Act. Additionally, each advertisement needs to carry the RERA registration number.
- Reduction of Booking Amount
The sum to be paid by the buyer has been reduced from 20% to 10%, which needs to be remunerated only after registering the contract for sale with the builder. Termination of the contract is allowed only if the buyer defaults on payment thrice. The buyer is entitled to serve a 15-day notice.
The Validity of RERA Registration
The approved registration will be valid for a period, specified by the promoter for completion of a real estate project. Also, it will be valid for the period specified to complete a particular project, as mentioned in the affidavit following the application form.
However, the validity of such registration can be extended under the following circumstances:
- Force Majeure like drought, war, flood, fire, cyclone, earthquake or any other calamity caused due to natural factor, affecting the usual development of a real estate project
- Other than force majeure or the ‘Act of God’, the concerning authority may extend the registration to maximum one year in case it feels that the circumstances and reasons for the extension of the case are reasonable.
How will RERA protect the buyers?
Although RERA is a central law but the real estate is a state subject so its execution will be conducted by the state governments. Every state and UT shall have their own Regulatory Authorities (RA). The given below are the lists to protect the buyers:
- Affidavit – the promoters are obliged to give a written declaration which shall be supported by documents an information regarding the timeline of the project and every details on project.
- Final date on possession– it is mandatory for the developer to adhere with his committed date and the sale agreement shall state the date of possession and rate of interest in case of default.
- Clear title of land – the written affidavit shall include the confirmed name of the land which is in the agreement and the documents shall be relevant with the same so as to avoid any land dispute later.
- Maintaining a separate escrow account: it will be requisite for the builders to create a separate escrow account in which 70% of the received amount from the buyers shall be deposited maintained by a scheduled bank. Moreover, the project shall be certified from, an architect, a chartered accountant, an engineer and shall be subject to six-monthly audit.
RERA Registration Process
Every promoter and agent need to register themselves with their respective state RERA Authority. There is a separate provision for the steps involved in the registration of agents and for registering for a real estate project. Let’s look at both the procedures in detail:
Registration for Real Estate Projects
The promoters need to convene a board meeting concerning the following to register for a project;
- Opening a separate bank account to cover the cost of construction
- Drafting of the RERA registration application
- Attaining approval for the allotment letter, sale agreement, and sales deed
- Obtain the title search report concerning proposed land
- Acquire essential NOCs and licenses from the government authorities such as the Fire Department, National Highway Authority of India, Airport Authority of India, National Authority Disaster Management Authority etc.
- Collecting all the necessary documents for filing application in Form A
- Submitting the RERA registration application with the respective state authority along with the prescribed fees
Registration of Agents
Real Estate Agents need to follow the steps given below to acquire the registration;
- For obtaining RERA Registration, you need to file a duly filled form along with the prescribed fees and documents
- After you file the application, you will receive a registration number from the regulatory body which must be provided in documents related to the sale of the property
- Also, you need to maintain a Books of accounts, records and other transaction-related documents quarterly
- You have to provide detailed information and supporting documents regarding the project you entered with the buyer.
- While applying, you must be aware that the agent may be suspended in case of misrepresentation of facts or fraud at the time of RERA registration.
Documents Needed for RERA Registration
Although the documents required for registering under RERA differs from state to state here are some of the basic documents required for RERA Registration;
Documents Needed by Developers to apply for an ongoing project
- Details of an individual promoter such as name, address, photo, and contact details
- In case of other than the individual promoter, the details of partners, chairman, directors, and another authorized person. Additionally, the details of the entity, it’s type, name, address, etc. of the entity has to be provided
- Copy of promoter’s PAN and Aadhar
- A copy of the approval attained from the concerned authority
- Plan of development
- Details of the project
- Income tax return (ITR) and audited financial statements of the past three years
- Title deed with the chain of title
- Documents of ownership like Performa of the allotment letter, sale agreement, conveyance deed, etc.
- Information on architect, engineers, etc.
- Any other required documents
Documents Needed by Agent
- Details of real estate agent like name, photograph, partners, directors, address, contact details
- PAN and Address of Real estate agent
- Address proof
Who Does Not Need to Register Under RERA?
The specified persons are exempted from registering under the Real Estate Regulatory Act, 2016 (RERA);
- The area of land proposed for developing is less than 500 square meters or the number of apartments designed does not exceed eight apartments, including all the phases, are exempted from registration.
- The promoter has received the completion certificate for a real estate project prior before the commencement of RERA.
- The real estate project requested for remodelling, replacement or development of projects is those projects which do not require marketing, advertising, selling or new allotment of an apartment
Offences and Penalties
If any of the entitled people fail to obtain a registration, they are liable for penalties under Section 59 or Real Estate Regulatory Act, 2016 as follows;
- Penalty up to 10% of the estimated project cost
- In case of continuous default, an additional fine up to 10% of the estimated project cost
- Imprisonment up to three years
Conclusion
RERA Registration is applicable for promoters, builders or anyone involved in the purchasing or selling of housing properties. Also, it is mandatory to hold the registration under the RERA unless exempted by law. Furthermore, the Real Estate Regulation Act, 2016 was introduced to provide the rules and by-laws for the supervision of buying, selling and construction of housing properties.
Read our article:Highlights of Project Extension in RERA
