RERA Real Estate (Regulation & Development) Act, 2016
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About RERA Real Estate
The Real Estate Regulation and Development Act (RERA) is a landmark legislation in India that promotes transparency and accountability in the real estate sector. It empowers homebuyers by establishing a regulatory framework that protects their rights and interests. By streamlining processes and fostering trust, RERA fosters a more buyer-friendly real estate market.
RERA Intends
- To regulate and promote the real estate sector
- To protect the interest of consumers
- To bring a smooth flow of event information between both the promoter and the purchaser
- To bring accountability of the promoters towards the purchasers
- To bring uniformity, professionalism, and standardization in different business transactions and practices in this sector;
- To establish a mechanism for fast-track dispute resolution
- To ensure fair-play and infuses transparency & reducing fraud
Project that come under RERA
- Registration of Real Estate Project – As per RERA Act 2016, every Promoter /developer shall be required to register its ongoing and new project measuring more than 500 square meters/598 square yards in size and no.of the flats exceeding 8 inclusive in all phases, with respective State RERA authority. RERA registration is required for on-going project and new project as under.
- On-going Project – every project which has not received completion certificate as on 01/05/2017, is required to get registered with respective State RERA authorities.
- New project – As per RERA Act, every new project after 01/05/2017 shall get registered with respective State RERA Authority before any kind of advertisement, promotion, booking or offer to sell or any kind of invitation for the purchase of any part of the project.
Some of the major provisions of the Act
- Every promoter shall maintain a separate bank account for every project.
- Every registered promoter/builders have to disclose every detail of the project they have undertaken on RERA’s official website regularly. This assures buyers of transparency regarding project timelines.
- The buyer is required to pay for the property based on the carpet area or the area enclosed by walls. Promoter cannot charge you for the super built-up area that includes lifts, balconies, stairs, and lobbies.
- Registered promoter/Builders have to put 70% of the money they collect from homebuyers into a separate bank account, which they can only use for construction purposes.
- RERA emphasizes the timely completion of projects. Any delay means that the developer has to pay you an interest of 2% over SBI’s MCLR for the period of delay.
- After the handover of the flat, the buyer can report construction defects for up to 5 years and have the developer rectify them.
- Developers have to resolve disputes with buyers within 120 days of it being filed.
- The developer or builder cannot make alterations or additions to the building plan without informing two-thirds of the owners about such a change. It can only proceed if a majority of homebuyers consent.
- The Act prohibits developers from taking more than 10% as advance from homebuyers.
- If at the time of possession buyers discover a discrepancy in the title deed, the buyer can immediately ask for compensation from the developer.
The key facilities being provided to promoters are as follows:
- Registration of Real Estate Projects
- Registration of Real Estate Agents.
- Quarterly update provision for each project
- Extension of Real Estate Projects
- Complaints Filing
Heavy Penalties
- Promoters have to pay 10% of the project’s estimated cost if they do not register under RERA. Moreover, they are charged 5% of the project’s estimated cost if they are found giving out false information related to the project.
- For promoters, violation of laws can lead to imprisonment for up to 3 years or cost them 10% of the project’s estimated cost.
- Agents are charged Rs.10,000 per day up to 5% of the cost of the project, in case they are found conducting construction and sales on their project sans RERA registration.
- Severe non-compliance with RERA will require developers to pay a daily penalty of up to 5% of the project’s probable value.
- In case of non-compliance with the Appellate Tribunal, the penalty is imprisonment for up to 1 year, or 10% of the project’s probable cost, or both.
Registration Duration
Registration of Project under RERA takes the shortest time and can be completed within a min. of 3 – 5 working days. Despite registration taking the shortest time possible, this solely depends on government procedures and approvals during the time of your registration
