INTRODUCTION
India is a developing country, urbanization and industrialization play a vital role in the development of a country. India has witnessed rapid urbanization in the last decade. Urbanization in India has become an important and irreversible process in India. It has a great impact on the growth of national income. Both are directly proportional to each other as urbanization increases employment and poverty reduction.
Real Estate is the sector that is linked with the core sector of the economy, such as steel cement and other raw materials for buildings. and it directly or indirectly affects 270 other industries. Real Estate is the booster for the economy
STATISTICS OF REAL ESTATE
Real Estate is the second-highest employment generator in India after agriculture. The sector employed around 5.5 crore people in the country.
According to an IBEF (India Brand Equity Foundation ) report, Indian real estate is expected to reach 1US$ trillion by 2030. By 2025 it contributes 13% of the country’s GDP. in 2021 it contributes 7% of GDP.
Indian real estate attract 5 billion US$ institutional investment in 2020, which is 93% of previous year investment
According to Colliers India, the Indian real estate sector is expected to grow by 4%
RERA (REAL ESTATE REGULATION AND DEVELOPMENT) ACT 2016
RERA is established for the regulation and promotion of the real estate sector and to ensure the sale of plot apartments or buildings as in the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute readdress and also to establish the APPELLATE TRIBUNAL to hear appeals from the decision, direction or orders of the real estate regulatory authority and the adjudicating officer and for matters connected therewith or incidental thereto.
The act came into force on 1 May 2016. There have been several amendments from the date of enforcement. After the enforcement of the act, all the institutions and companies related to real estate need to register them.
Terms Used In Real Estate Regulatory and Development Authority Act 2016
PROJECTS
The development of a building or a building consisting of apartments, or converting an existing building or a part of it into apartments, or the development of land into plots or apartments, for the purpose of selling all or some of the said apartments or plots or building, and includes the common areas, the development works, all improvements, and structures.
PROMOTERS
A person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignee
REAL ESTATE AGENT
Any person, who negotiates or acts on behalf of one person in a transaction of transfer of his property, in a real estate project, by selling it to another person or transfer of property, of any other person to him and receives remuneration or fees or any other charges for his services whether as a commission.
Agents are the soul of real estate. As the buyer is not able to directly contact the builders, they need agents who can give them complete details of the project. Such as building type, mode of payment site visits, etc. so that they get all the details easily.
STATISTICS OF RERA
At present 34 States and UT’s notified rules for RERA.
30 States and UT’s have set up real estate regulating authorities.
Regulating 27 states have operational websites according to RERA regulations.
Total projects and agents registered in RERA 69,610 and 55032 respectively.
As RERA has its own tribunal as of now that tribunal disposes of 75156 no of cases all over India.
PROJECTS REGISTERED STATE WISE
Maharashtra is on the top in the RERA ranking as there was max no. i.e. 31221 projects and 31551 agents were registered. Gujarat is in second place with 9089 projects and 1702 agents.
Haryana implemented RERA in 2017. At present Haryana established a permanent regulatory body with the permanent appellate tribunal and Adjudicating Officer
Haryana is the only state which has regulatory authorities, one in Gurgaon and the other in Panchkula( this is for the rest of the state).
Haryana has registered 879 projects and 2499 agents. Total no. of cases 15980 disposed of by H-EREA ( Haryana real estate regulatory authority) authority.
Uttar Pradesh disposed off max no of cases till now 29534 cases. Haryana on the second no with 15980 cases.
WHY RERA IS NEEDED
A middle class person wants to construct his own house, and wants to buy a flat. The Builders lobby shows him a prospectus of the project and the middle man is attracted to it and purchases the property. A middle class person makes one house in his whole life and in it he invests all his capital. RERA has put a check on it by giving transparency ,after RERA every detail of the project will be shown on the state’s official RERA website.If any issue arises then the person can file a complaint. Disputes will be stalled within 60 days. RERA will make sure that the middle class should not face any problem if he wishes to own a house.
BENEFITS OF REAL ESTATE REGULATING AUTHORITY
REAL ESTATE REGULATING AUTHORITY ACT 2016 is passed by the parliament when it is beneficial for the citizens. Indians have the mentality to save money by investing in property or gold. This law will empower citizens who invest in real estate. Earlier the builders were on the upper hand but after the REAL ESTATE REGULATING ACT 2016 there is a balance between the two.
FAIRY TRANSACTION : AFTER Establishment of RERA, builders need to submit the detailed estimate of the project. Builders will maintain separate accounts for each project and 70% of the amount collected by the home buyers must be used for the construction and land purpose and can only withdraw money after the approval certificate of Engineer, Architect and Chartered Accountant of the assigned projects.
TRANSPARENCY : Builders have to upload all the project details under the project name on the RERA official website of the individual state. Buyer will get all the information regarding the project, such as project layout, schedule of completion, licence by the Town and Country Planning Department(DTCP), approval like water, electricity and sanitation and other documents related to the project by just visiting the RERA website. There is no fabrication or false display of details and advertisement, all the documents were authentic.
TIMELY DELIVERY: Builder will give timely possession of the property to the Buyer, as mentioned in the agreement or updated on RERA website. Normally 6 months extension period given to the builder, after that excuse will be entertained from the buyer side except in avoidable situation such as coronavirus-19 outbreak, delay will be valid but only for limited period. If the builder is unable to deliver the possession then the penalty will be paid by the builder with interest as mentioned in the agreement.
QUALITY: Now Builders were using the best quality of raw material according to the construction provisions. As they are accountable if there is any structural defect or issue that arises within the prescribed period, buyers just need to inform the builder and the problem will be resolved by the builders, either they repair or change it.
SPEEDY ADJUDICATION: If the buyer has any dispute with the builder then they can file the complaint, by just registering a complaint on the state official website of RERA. Buyers can register complaints to the RERA AUTHORITY OR ADJUDICATING OFFICER. Time limit for disposal of cases is 60 days by the RERA authority or adjudicating officer. If the case is not disposed off within 60 days then the adjudicating officer needs to give a written explanation.
Requirement of Registration under RERA
PROJECT
Any building or land developed for the purpose of the sale is known as a project, that project needs to register under RERA.
Agent
Any person who deals in the sale or purchase of property, on the behalf of others, needs to register under RERA.
*Note
UNDER SECTION 3 OF RERA, No 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 with the Real Estate Regulatory Authority established under this ACT..
CRITERIA TO REGISTER PROJECTS UNDER RERA
Parties in the transaction
- Promoters:- who are land developers.
- Agents:- who deals in the sale or purchase of property on others’ behalf.
Property type
- Commercial:- Premises for business use
- Residential:- Premises for accommodation purposes.
Structure of property
- Land:- Area not less than 500sq meters in a project, or
- Building:- Not less than 8 apartments under the project
*Section59 of the RERA Act 2016 deals with the punishment for non-registration of projects by the promoter.
If any promoter contravenes the provisions of section 3 (registration of project), he shall be liable for penalty or punishment.
The penalty may extend up to 10% of the estimated project cost as sanctioned by the authority.
If the promoter fails to comply with orders, he shall be punishable with imprisonment up to 3 years or with a fine which may be extended up to a further 10% or both.
There are several times when promoters advertise real estate projects without prior registration of the project under RERA to promote their project. In recent order dated 12th October 2021 THE HARYANA, REAL ESTATE REGULATORY AUTHORITY(H-RERA) imposed a penalty of Rs 3 crore on real estate developer M3M for allegedly advertising and marketing its project titled City of Dreams without registering with the authority, which is a legal requirement as per the norms of RERA. In a statement issued by the chairman of H-RERA, Gurugram Mr. KK Khandelwal said that it has taken Suo moto cognizance of the issue. (Source: HINDUSTAN TIMES)
In January 2021 Haryana Real Estate Regulatory Authority, Gurugram imposed a penalty of Rs 2.5 crore on the three builders, besides ordering demolition by the MCG Municipal Corporation of Gurugram of unauthorized construction. (Source :The Times of India)
DOCUMENTS FOR REGISTRATION OF PROJECTS UNDER RERA
As 30 states and union territories established RERA in their respective states, every state has its own rules and regulations to implement RERA. For the registration, each state have different norms and need the different document, but some basic documents which are required by all the states are as follows:-
- Copy of license along with a schedule of land.
- All renewal letters relating to the validation of license
- Ownership documents of licensed area
- Bilateral agreement executed with the Town and Country planning department (DTCP)
- Documents of license and collaboration agreement in the revenue record.
- In case of a plotted colony, then:
- The latest layout plan
- Demarcation plan
- Zoning plan
- In case of group housing/ commercial sites, then:
a) A copy of the approved Zoning Plan.
b) A complete set of the last approved building plans.
- Cash flow statement of the proposed project.
- Certificate from a Chartered Accountant certifying that the information provided by the applicant in Form REP-I-C-X is correct as per the books of the Accounts Balance Sheet of the applicant.
- Non-default certificate from a Chartered Accountant.
- Copy of the draft allotment letter.
- Copy of the draft agreement.
- Approvals – Water/ Environment/ AAI, etc.
- Balance Sheet – last 3 yrs. of developer/ licensee.
- Project report showing the estimated cost of the project.
- Details of the securities furnished to the banks/ financial institutions against the aforesaid loan.
For more query visit Ministry of Housing and Urban Affairs https://mohua.gov.in/cms/implementation-status.php
STEPS FOR ONLINE REGISTRATION FOR HARYANA https://haryanarera.gov.in/images/manual.pdf
UNDER SECTION 9 OF RERA ACT AGENT REGISTRATION IS REQUIRED
No real estate agent without registration will sell or purchase or act on the behalf of another person to facilitate the sale or purchase of any plot building, which is part of the registered project under section 3 of RERA Act 2016.
Every real estate agent shall make an application to the authority for the registration. The authority will register the agent if it satisfies the condition. If not registered then the person will receive the communication letter which mentioned the reason. If the applicant does not receive communication about the deficiencies in his application or the rejection of his application, he shall be deemed to have registered.
There is a separate registration for each state, which is valid for 5 years after which the agent needs to renew its registration.
DOCUMENTS FOR THE REGISTRATION OF AGENTS UNDER RERA
Same as projects, agents registration is also compulsory under RERA . All the states have their own norms regarding the registration of agents . Basic documents that are required by every state are as following:-
1. Online Payment Receipt.
2. Self-attested copy of address proof of place of business.
3. Certificate of incorporation of the company.
4. GST registration.
5. Copy of PAN Card.
6. Proof of Residential address
7. Authenticated copy of registration in any other state or Union Territory.
8. Proof of last Educational Qualification.
9. Copy of the address proof, copy of Aadhar Card, Pan Card of partners/Directors of the Company, Society, Firm as required.
10. Copy of CIN No. and Pan Card of the company.
In my view it is a great initiative of the government Real Estate Regulating and Development Authority, it will provide security, transparency and accountability in the real estate projects. Such legislation enhances faith in government and in its working.
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DISCLAIMER: The entire contents of this article have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, the author assumes no responsibility therefore. Users of this information agree that the information is not professional advice and is subject to change without notice. The author assumes no responsibility for the consequences of use of this information. IN NO EVENT THE AUTHOR SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM OR ARISING OUT OF OR IN CONNECTION WITH THE USE OF THIS INFORMATION
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