Real Estate under RERA Regime.
After 4 months of implementation of RERA, Builders and Developers are in dilemma of legal compliances relating to RERA. THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016 has altered the Real Estate Business altogether and it is a big challenge for professional to help their client with the same. In this Article we are going to deal with the basic question of how the working style and business practices going to get affected under RERA regime.
Following are the key points for understanding the impact:
- No Real Estate promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project.
- A promoter cannot even market or advertise the project without registration. This means there cannot be pre launching or pre booking for project which can be a big financial issue for some.
- No Real Estate promoter can accept more than 10% of sales consideration for the buyer without getting into an Agreement of sale.
- 70% of the amounts realized for the real estate project from the allottees has to be kept in a separated Bank account to cover the cover the cost of construction and the land cost and shall be withdrawn only after getting a signed certified by an engineer, an architect and a chartered accountant in practice.
- Get his accounts audited within six months after the end of every financial year by a chartered Accountant in practice and shall produce a statement of accounts duly certified and signed. Fact that the amounts collected for a particular project has been utilized for the project and the withdrawal has been in compliance with the proportion to the percentage of completion of the project, has to be audited by a chartered Accountant in practice along with other compliances.
- The Builder/Developer has to make sure that Cancellation and refunds are handled in accordance with the Act.
- Project should have its Brokers and Agents listed with the Real Estate Regulatory Authority (RERA) and all those Brokers and Agents should be registered as Real Estate Agents with the RERA.
- The Promoter has statutory duty to operate with in various time frames, he shall ensure timely Completion of the project, and completion certificate is obtained, occupancy certificate and forming a Residential welfare society and handing over possession of common area to it.
- Online Web page has to be maintained with RERA regarding project and has to be updated.
- Quarterly filing with RERA for every project along with Annual Filing.
As a professional we can serve our clients in following ways in this new field:
Scope of work under RERA:
- Consultancy relating RERA compliances.
- Registration of Real Estate Project.
- Registration of Real Estate Agents.
- Managing fund in accordance with Section 4(2)(1)(D) Of The Act.
- Issuing certificate of withdrawal for Specific Bank Account under RERA.
- Handling legal litigation and representing client in RERA and Appellate Tribunal.
- Drafting Brochure, Allotment Letter, Agreement to Sale and Sale Deed in accordance with the REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016.
- Filing Quarterly update with RERA.
- Audit of Financials in accordance with Section 4(2)(1)(D) Of The Act and filing with the RERA.