RERA Act 2016 was introduced to protect the interest of homebuyers, ensure transparency in the real estate sector, and facilitate effective and quick dispute resolution.
A major objective behind the implementation of The RERA Act is to boost investments in the real estate sector. Under the provisions of the act, it is mandatory for the builders to submit every detail of their ongoing project, which includes approved plans, alterations that are made to the plan, construction, completion and delivery timeline, revenue collected, etc.
So, read on to learn more about the RERA Act and its particulars.
Provisions of the RERA Act
Here are the provisions of the RERA Act, as notified by the Indian Government:
- Under the provisions of the RERA Act, it is compulsory to register a residential or commercial project before it is launched or advertised under their state’s (RERA) Real Estate Regulatory Authority, where the area of the land is more than 500 square metres.
- The real estate agents or promoters purchasing or selling the realty projects must register themselves with the RERA authority.
- Ongoing projects that are without CC (Completion Certificate) as of the act’s commencement date have to file for registration within three months. Within 30 days, the concerned authority will have to accept or reject the registration application. If the registration request is accepted, real estate agents or promoters have to furnish all the necessary project details on the official website of the RERA.
- In case builders do not register a project, they will be penalised.
- As per RERA’s new rules, it is mandatory to share the details of municipal taxes, registration charges, maintenance charges, energy costs, etc.
- Builders hold the charge of all the outgoings like water and electricity till the property is handed over.
- Homebuyers’ rights and duties include clearing necessary payments to the builder as stated in the sale agreement. If they are delaying the payment, then it will be
- Unless the agreement to sell is completed, buyers are not allowed to make more than 10% of the total amount to the builder.
There are different sets of RERA rules for possession. They are as follows:
- In case the builder or real estate agent does not hand over the project to the homebuyer as the norms stated in the agreement to sell, buyers can claim a refund along with interest.
- Home buyers can get an interest rate for every month of delay in case they don’t want to back out. Further, homebuyers are allowed to get a refund along with interest if the possession of the property is on hold because of revocation or suspension of the builder’s RERA registration.
- Promoters or builders have to give the title documents within thirty days of getting the completion certificate.
- Homebuyers get the right to possess the property within two months after getting hold of the occupancy certificate.
- Homebuyers or allottees are entitled to receive all the necessary documents related to the property after being given the said property’s physical possession.
Read More: Should you Rent or Buy a House?
Salient Features of the RERA Act
Besides knowing the RERA meaning, you must be aware of the salient features of the RERA Act:
- The RERA Act is implemented in every Indian state to track as well as adjudicate disputes/ discrepancies arising in real estate projects of a concerned state.
- RERA compliances include informing the allottees regarding any minor alteration or addition done to the plan of the project execution.
- It has brought along a fast-track mechanism for mitigating disputes. Disputes are settled via a dedicated adjudicating officer or an appellate tribunal.
- Real estate projects catering to the above-mentioned clause must be registered under RERA. It will enable the concerned authorities to have the project’s jurisdiction. Authorities can reject the registration of a particular project in case the project construction does not follow RERA guidelines.
- Written RERA approval and written consent from two-thirds of the allottees are required if the builder or promoter intends to assign or transfer maximum liabilities and rights on a project to a third party.
- Both buyers and promoters are liable to pay the same rate of interest in case there is any default on their part.
- Promoters are liable to compensate the buyers in case they cause them any loss for people laying claim to the property that has either been constructed or is under construction. There is no limit set to the compensation amount.
- If any decision from the RERA authority is found to be unsatisfactory, the aggrieved party is entitled to submit an appeal to the Appellate Tribunal.
- Civil courts do not have the power to interfere in any RERA-related matter.
- Penalty will be levied if the order of the Appellate Tribunal is not followed. The penalty can be either in the form of imprisonment or a fine.
Benefits of the Implementation of the RERA Act
RERA Act bestows buyers, real estate agents, and promoters with multiple benefits. These are
- Carpet area standardisation
The way builders used to set the price of the project before was not defined. Under the provision of RERA, builders have to follow a standard formula to compute the carpet area of the project. Hence, buyers do not have to think about paying higher prices.
- Right to information
Developers are required to share authentic details of the project. Also, buyers are entitled to acquire any details related to the project. It can be related to the layout, completion status, etc. This helps in facilitating transparency in the real estate sector.
- Repair of defects
If the buyers find any defect in the property at the time of possessing the property, they are entitled to claim compensation. Furthermore, if buyers discover any quality issues or structural defects within five years of owning the property, they can ask for rectification from the builder at no cost.
- On-time possession of the property
One of the significant loopholes in the real estate sector is that buyers are given fake promises about project completion and delivery. With the implementation of the RERA Act, buyers do not have to go through any financial worries, as promoters have to mention the anticipated date of the project completion and have to abide by that to escape huge penalties.
How to Register Properties Under RERA?
The process of registering properties under RERA is different for promoters and real estate agents. It can be easily done from the RERA website.
Here are the general steps that will help promoters register a property.
- Step 1: First, make a checklist and keep all the required documents ready. As per Section 4 (2) (I) (D) of the Act, get the bank account number.
- Step 2: Fill out Form A, Form B, and Form G and submit them. Also, submit an affidavit that states the information provided in Form G is not opposite to the RERA rules.
- Step 3: Also submit an affidavit that mentions that no booking amount has been gathered from prospective buyers and initiate the fee payment. This fee differs from state to state.
- Step 4: Send a hard copy of all the duly signed documents to the concerned Real Estate Regulatory Authority via post.
- Step 5: You can obtain an RERA certificate after filling out and submitting the Form.
Documents Required for RERA Registration
Promoters will have to submit the following documents to register a property –
- PAN card
- Encumbrance certificate
- Legal title deeds
- Commence certificate
- Plan of the work that is going to be executed
- Location details
- Layout plan
- Sanction plan,
- ITR of the promoter (last three years)
- Audited balance sheet,
- Profit and loss account,
- Copy of collaboration agreement (if the ownership of the land on which the project is being constructed does not lie on the promoter)
- Details related to the number of garages up for sale, etc.
Builders have to submit details of previous project experience (if any). To substantiate project experience, promoters have to submit the name of the project, status of the project, pending cases (if any), etc. If there are any pending cases, promoters have to submit the case name and number.
Real estate agents will have to submit the following documents.
- PAN
- Proof of address
- Information of the real estate agency (name, type of enterprise, co-operative society, partnerships, registered address, etc.)
- Details related to the registration of the enterprise, etc.
The incorporation of the RERA Act 2016 not only promotes transparency in the real estate sector but also regulates sales. Buyers can easily check the RERA registration status on the RERA website. They have to type the RERA registration number and captcha code, and if the property is RERA-registered, then you can see all the details. Further, buyers, agents, or promoters can easily file a complaint to the RERA authority in case they face any issues with respect to their project.
