Brief History and the final Enactment:
Affordable housing story is the most hyped story. RBI defines that, cost of the house cannot exceed Rs. 65 lakhs and 50 lakhs in metros and non-metros respectively. RERA will force consolidation in the sector. Smaller real estate developers will end up collapsing into the arms of bigger builders.
The Real Estate act (RERDA i.e real estate development bill 2016), was passed by parliament in march last year and all the 92 sections of the act has come into effect from may 1 for almost waiting for 9 years. So far only 13 states have notified the rules.
The Indian Real Estate sector comprises of over 76000 companies across the country. As per the industry data, projects in the range of 2349-4488 (in number) were launched every year between 2011 and 2015 amounting to a total of 17,526 projects with investments of upto 13.70 lakhs crore in 27 cities, 15 being state capital
RERA (Real Estate Regulation Act) comes into force with a promise of protecting the right of consumers and bringing in the transparency in to this sector. Paradigm change is expected in the way the Indian Real estate sector functions.
|1.||The developers will now have to get registered with regulatory authority within 3 months from 1st may, 2017 for the following:|
|2.||70% of the funds received from the buyer should be deposited in a separate bank account for construction activity.|
|3.||All Developers are required to disclose their project details on the regulator’s website, and provide quarterly updates on the construction progress.|
|4.||Violation of orders of Appellate tribunal and regulatory authorities would lead to imprisonment of upto 3 years for developers and upto 1 year in case of agents.|
Real estate Developer’s take aways:
Gautam Chatterjee, an IAS Officer who is appointed by the Maharashtra government as an interim officer to set up RERA in the state, said process of registration will be as simple as filing a return. While the people involved in the said business view it as another burden of compliance.
|1.||In case of delay of projects, burden of paying monthly interest on bank loans taken for underconstruction flats will fall on developers unlike earlier which fell on home buyers- JLL India CEO and country head Ramesh Nair Source: Economictimes.com |
He Further adds, any structural or workmanship defect brought to the notice of the promoter must be rectified by him without any further charge.The aggrieved allottee is entitled to receive compensation under RERA
|2.||There will be a teething problems for many developers resulting in delay in launching projects and impact on home sales for the next few months.- Jaxay Shah, President of the real estate lobby group confederation of real estate developers association of India (CREDAI)|
|3.||‘There are many hurdles for developers and brokers to comply with the norms. Many states and cities do not have website ready to apply, so they cannot start selling without the registration number’- Getamber Anand, Chairman and MD of Noida based ATS Infrastructure Ltd.|
|4.||We don’t know the efficiency and turnaround time for the registration- Prakash Rohira, Mumbai Based Real Estate Broker. Source: Economictimes.com|
Note: Renovation or repairs or redevelopment projects involving marketing, advertising selling and new allotment need not be registered.
TRANSPARENCY and ACCOUNTABILITY
Benefits of RERA 1
|Inventory and Bank Accounts|| |
|Other Documentations required|| |
Information Need to be updated on MahaRERA website
⇒ Promoter’s Basic Information
|1||Type of Organisation|
|3||Other Than Individual||Name of Entity |
Contact Details of responsible Person
Information about all the partners/directors/trustees
Name of partners/directors/trustees
⇒ Projects Launched and completed in the last 5 years
|1||Name of the project|
|2||Area Developed in sq.Mtrs|
|3||Site location and address|
|4||Proposed date of completion|
|5||Actual date of completion|
⇒ Land Details
|Sr.No||Input Details||Documents to be uploaded|
|1||Area in Sq.Mtr||Title Report|
|2||Address||Owners consent, if promoter is not the owner|
|3||Location Details with clear Boundaries||Agreements|
|4||Latitude and longitude of all end points of the project||Documents of encumbarance on land if any|
⇒ Project Details
|Sr.No||Input Details||Documents to be uploaded|
|1||Name of the project||Certificates from Architect, Engineer and CA|
|2||Proposed and Sanctioned Information FSI Buildings/floors/wings Apartments Garages Covered Parkings Floors Recreation and open space||Promoters declaration in form B |
Copy of approvals, layout sanctioned plans and commencement certificates
Document on encumbrances on land if any.
|3||Project completion date||Sample allotment letter, agreement, conveyance Deed|
|5||Real Estate Agent Details|
Project cost details-line wise item
√ Quote Registration number on all the project documents
√ Operation only from Bank accounts opened for the purpose following rules and regulations
√ Quarterly report submission
√ All the actions to be carried out as per the Rules and Regulations of RERA Act.
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