Basics of RERA
The much needed Real Estate (Regulation and Development) Act, 2016 came into effect on 1st May, 2016. 59 of 92 Sections of the Act were notified on 15 April, 2016 making them effective from May 1, 2016. This enabled preparation of Real Estate Rules, setting up of Regulatory Authorities and other infrastructure. Remaining sections were notified on 19th April 2017 making them effective from 1st May, 2017 which required registration of the projects within 3 months of the notification.
The Act is aimed to regularise and boost investment in real estates industry in India and at the same time protecting the interest of the home buyers, speedy dispute redressal. It requires registration of the real estate projects as well as those which have not got completion or occupancy certificates.
Under the Act, Real Estate Regulatory Authority (RERA) is to be established by each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute redressal.
Registration of Projects and agents
Section 3 of the Act mandates registration of the real estate projects.
Prior Registration- Prior registration with Regulatory Authority- RERA is required for sell or offer of sale of any plot, apartment or building. For the ongoing projects, the promoter shall make application with the RERA within 3 months from the date of commencement of the Act.
Where the project is to be developed in phases, registration to be done for every phase separately.
Exemption from registration- The projects having land area less than 500 square meters or having number of apartments less than 8 (eight) are exempt from registration. Also the project for renovation or repair or re-development which does not involve marketing, advertising, selling or new allotment of any apartment, plot or building are exempt.
Application for Registration- The application for registration to be made under section 4 of the Act with the prescribed documents and information. Application for registration must be disposed of within a period of 30 days by RERA. On successful registration, the applicant shall be provided with a registration number, a login id, and password to fill up essential details on the website of the RERA.
The registration as granted may be revoked by the Authority on receipt of complaint or suo motu on the basis that the promoter makes default, violation of any the terms and conditions, promoter is involved in any kind of unfair practice or irregularities.
Registration of real estate agent- As per section 9 of the Act, the real estate agents must obtain prior registration from RERA. Such agents will be issued a single registration number for each State or Union Territory, which must be quoted by the agent in every sale facilitated by him.
The registered real estate agent shall not- facilitate the sale of a plot, apartment or building which are not registered under RERA.
Functions and duties of Promoters
Chapter III of the Act states about the functions and duties of the promoters.
Security of Home buyers
The Act empowers the home buyers to receive the property within stipulated time, obtain all the relevant information relating to the project, take the possession and title of the property. 70 per cent of the money has to be deposited in bank accounts through cheques. The promoters will have to quote prices based on carpet area not on super built-up area. Under RERA, it is mandatory for the builders to disclose the carpet area.
Real Estate Regulatory Authority and Appellate Tribunal
The appropriate Government shall establish a state level Authority under section 20 of the Act, to be known as Real Estate Regulatory Authorities (RERA) to regulate transactions related to residential and commercial projects and ensure their timely completion and delivery. The objects of the Authority is to facilitate the growth and promotion of a healthy, transparent, efficient and competitive real estate sector. The objective of the Authority is the protection of interest of the home buyers, creation of a single window system for ensuring time bound project approvals and clearances, creation of a transparent and robust grievance redressal mechanism, encouragement of investment in the real estate sector, encourage construction or environmentally sustainable and affordable housing.
The appropriate Government shall within a period of one year, establish an Appellate Tribunal in the State or UT. Appellate Tribunals will be required to adjudicate cases in 60 days and Regulatory Authorities to dispose of complaints in 60 days while no time-frame was indicated in earlier Bill.
Section 84 of the Act sates that within six months of the Act being enforced, State Governments shall make rules for carrying out the provisions of the Act. The Authority shall within a period of three months, make regulations consistent with this Act and the rules made thereunder to carry out the purposes of this Act.
*So far, the following States have implemented the Rules and formed the Authority in their respective states/ UT:
Uttar Pradesh, Gujarat, Chandīgarh, Madhya Pradesh, Delhi, Lakshadweep, Maharashtra, Dadra and Nagar Haveli, Bihar, Andaman and Nicobar Islands, Daman and Diu, Andhra Pradesh, Rajasthan, Odisha, Jharkhand, Uttarakhand, Tamil Nadu, Karnataka, Haryana, Punjab, Chhattisgarh, Assam, Puducherry, Tripura, Telangana, Himachal Pradesh, Goa, Kerala, Manipur, Mizoram.
*Source: website of Ministry of Housing and Urban Affairs
The Real Estate (Regulation and Development) Act, 2016 aims at bringing in a healthy, competitive, transparent and safe real estate industry, which is secured and safe for home buyers and also boost the investment in the sector.
Author- Sonika Bharati- Email id- firstname.lastname@example.org