[RERA] [All you need to know about RERA] Definition: The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The Act establishes a Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute resolution. Real Estate Regulatory Authority and Appellate Tribunal Act will help to establish state-level Real Estate Regulatory Authorities (RERAs) to regulate transactions related to both residential and commercial projects and ensure their timely completion and handover. Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities to dispose of complaints in 60 days while no time-frame was indicated in earlier Bill. What will change for the developers and the real estate buyers? 1. The developers are expected to maintain minimum 70% of the money collected from potential buyers in an escrow account opened with a bank, to be utilised exclusively to meet the cost of that project. 2. Every project with the proposal of developing 8 flats or acquiring 500 square meters of the plot will have to be registered with the regulator. If the project is to be completed in phases, each phase needs to be registered separately. If the developer fails to do so, he will have to pay a penalty of up to 10% of the project cost, and if he /she becomes a habitual offender, he/she can be jailed for 3 years. 3. Developers will have to sell flats on the basis of carpet-area. Selling apartments at built-up and super-built up rates is prohibited under RERA. 4. The builder would be held responsible for structural defects in the first 5 years. 5. If the project is delayed, the developer will have to pay the interest to the customer. 6. The developer need permission from a minimum of 2/3rd of allottees to make changes to the original plan. 7. Availing insurance for the land titles would become possible. 8. Appellate Tribunals and Regulatory Authorities will have to dispose of complaints within a stipulated time period. 9. Even property brokers will also have to register themselves under RERA. Furthermore, they can advise their clients only about registered projects. They shall operate only within the specified territory or state. If they are found violating any of these provisions, they can be penalised. In other words, brokers can't scuffle shrug off their responsibility and accountability towards their clients. 10. Buyers will have to ensure that they take possession of property within 2 months of project receiving the Occupancy Certificate (OC). Benefits of RERA: 1. Standardisation of carpet area 2. Reducing the risk of insolvency of the builder 1 3. 4. 5. 6. 7. 8. 9. Advance payment: Rights to the buyer in case of any defects: Interest to be paid in case of default: Buyer’s rights in case of false promises If defect in title, consumer can claim compensations Right to information Grievance Redressal What you should be keeping in mind while searching for the new property (Buyer’s) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Who is the builder? What has been his track record? Has he completed the construction of his projects as per schedule? Visit the site and inspect the quality of construction The rate which he is offering for the amenities offered You may also visit other sites developed by the same builder just to check whether he has fulfilled all promises made and offered amenities as promise Title of the property on which the construction is taking place or has taken place (to ensure that it free from any encumbrances and litigations) Has he obtained all statutory permissions? In case of a ready property - i.e. newly constructed or a resale property, has a society being formed Is the builder listed or recognised by the housing finance company (in case if you want to avail a home loan facility)? Project Categories under RERA 1. 2. 3. 4. 5. Residential and commercial projects inclusive of plotted developments Projects with sizes exceeding 500 sqm or 8 units Projects minus completion certificate prior to implementation of Act Every phase to be taken as standalone realty project needing fresh registration Projects for repair/redevelopment/renovation which does not have any re-allotment, selling/marketing/advertising or new allotment of apartments/plots/buildings will not come under the aegis of RERA. Developer Information required under RERA 1. 2. 3. 4. Type, number and carpet area of units Consent from allottees for additions or alterations Time frame for completion of project Quarterly updating of information on RERA website with details like approvals which are pending and unsold inventory 5. No cancellation (arbitrary) of units by the developer 6. No false commitments or statements made in the advertisement 7. Project Registration under RERA 2 Requirement for registering projects under RERA: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Compulsory registration of new/existing projects prior to launch Dispute resolution within a period of 6 months at RERA/RERA Appellate tribunals Separate registration for multiple project phases Authenticated approval copies, sanctioned plan, commencement certificate, specifications, layout plan, facilities proposed, development work plan, agreement for sale, proforma allotment letter and conveyance deed Details of projects launched in last 5 years from developers with reason for delay and status Timely updates on the RERA website Maximum extension of 1 year in case of delay if it is not the fault of the developer Annual audit of project accounts by CA Construction and land title insurance Conveyance deed for common areas in favour of the resident’s welfare association (RWA) Time period for completion of project RERA for real estate brokers/agents Here’s what AGENTS/BROKERS have to keep in mind with regard to RERA registration1. 2. 3. 4. 5. 6. 7. 8. 9. 10. There can be no booking/advertising/selling/offer for sale of projects minus RERA registration Project cannot be sold by agent without getting RERA registration RERA number of agent has to be documented in sales enabled by him/her Registration is renewable and it can be revoked/blocked in case of any breach has been made for conditions of registration within a particular timeline No agent can sell an unregistered project and books and records have to be maintained Unfair trade practices are a strict no-no No incorrect statements, either written/oral/visual can be made Representation cannot be done that the developer or the broker has any affiliation or approval which the former does not possess Publication of advertisements in newspapers or otherwise is not allowed for services which will not be available Agent has to enable possession of all necessary documents for the allottee while booking Filing complaints under RERA | Penalties 1. Complaints can be filed by aggrieved parties under the Section 31 of RERA, 2016 with the adjudicating officer/Real Estate Regulatory Authority. These complaints may be made against the allottees, promoters or the real estate brokers/agents. State Government regulations already have the full procedure and form provided for applications in this regard. 2. With regard to Uttar Pradesh or the Chandigarh UT, they are the Forms M or N. Complaints have to be in the prescribed form based on the respective rules of States. This can be filed in respect of projects under RERA registration within the time period prescribed in case of contravention/violation of provisions/rules under RERA. With regard to cases which are pending under the NCDRC or consumer forums, allottees/complainants may withdraw the case and approach authorities under the RERA framework. Other offences (with the exception of complaints under Sections 14, 12, 18 and 19) may be filed to the RERA authority. 3 How to File a Complaint Under Section 31 of RERA, complaints can be filed against promoters, buyers, or agents. Here are the steps to follow while filing a complaint are: • • • • • • • • • • • Find a RERA lawyer and file a complaint under the appropriate jurisdiction. Fill the complaint as per the rules prescribed by the concerned state in which the project is situated. Include the following details: Details of the applicant and the respondent. Address and registration number of the project. A brief statement of the facts as well as the grounds of the claim. If any relief is sought, then details of the relief and interim reliefs (if any). Pay the fee. Keep in mind that this amount differs from state to state. For example, the fee in Maharashtra is Rs.5,000, while it is Rs.1,000 in Karnataka. Alternatively, you can file a complaint online by visiting your state’s RERA website. If you aren’t satisfied with the decision made by RERA, you can file a complaint with the RERA Appellate Tribunal within 60 days. You can also approach the High Court within 60 days if you aren’t satisfied with the Appellate Tribunal’s decision. Penalties that apply under RERA Here’s penalties that are applicable under the RERA frameworkA. Offence-wise Penalties for Promoters | builders Section Offence Penalties Section 59 Non-registration of a project 10% of estimated cost of real estate project Not obeying orders or directions in connection with the above Section 59 offence Imprisonment up to 3 years with an or without fine being 10% of the estimated cost of real estate project Providing false information etc. Section 60 and other conventions 5% of the estimated cost of real estate project Penalty for every day of defaults which may Contravention of any order of the cumulatively extend up to 5% of the estimated cost Section 61 RERA of real estate project Imprisonment up to 3 years with or without fine Contravention of the orders or which may cumulatively up to 5% of estimated cost Section 64 direction of the appellate tribunal of real estate project. 4 B. Offence-wise Penalties for Real Estate Agents Section Offence Penalties Contravention of the applicable provisions of the Section 62 Act Rs. 10,000 per day of defaults which may extend up to 5% of the cost of the property Contravention of the orders Section 65 or direction of the RERA Penalty on a daily basis which may cumulatively extend up to 5% of the estimated cost of the property whose sale or purchase was facilitated Contravention of the orders or direction of appellate Section 66 tribunal Imprisonment up to 1 year with without fine which may extend up to 10% of estimated cost of project C. Offence-wise Penalties for Allottees Section Offence Penalties Penalty for the period during which defaults continues Contravention of any order which may cumulatively extend up to 5% of the apartment Section 67 of the RERA or building cost Contravention of the orders or direction of Section 68 appellate tribunal Imprisonment up to 1 year with or without fine for every day during which such defaults continues, which may cumulatively extend up to 5% of the apartments or be building cost NOTE: Keep yourself updated with new RERA policy. Implementing states of RERA (as of on 17th fab 2020) State/UT Date of notification Rules Website Gujarat 29 October 2016 [2] http://gujrera.gujarat.gov.in/ Uttar Pradesh 11 October 2016 [3] www.up-rera.in Chandigarh 31 October 2016 [4] http://rera.chbonline.in Dadra and Nagar Haveli 31 October 2016 [5] Andaman and Nicobar Islands 31 October 2016 [6] http://maharera.mahaonline.gov.in/ http://www.tnrera.in/ Lakshadweep 31 October 2016 [7] Daman and Diu 31 October 2016 [8] http://maharera.mahaonline.gov.in/ Madhya Pradesh 22 October 2016 Rules http://rera.mp.gov.in/ 5 Delhi 24 November 2016 [9] http://dda.org.in/rera/index.aspx Maharashtra 19 April 2017 [10] https://maharera.mahaonline.gov.in/ Andhra Pradesh 28 March 2017 [11] https://www.rera.ap.gov.in Odisha 25 February 2017 [12] http://orera.in/ Bihar 1 May 2017 [13] https://rera.bihar.gov.in/ Rajasthan 1 May 2017 [14] http://rera.rajasthan.gov.in/ Jharkhand 18 May 2017 [15] Uttarakhand 28 April 2017 [16] http://rera.jharkhand.gov.in/ http://www.uhuda.org.in/real-estateact/ Tamil Nadu 22 June 2017 [17] http://www.tnrera.in/index.php Karnataka 10 July 2017 [18] https://rera.karnataka.gov.in/ Punjab 8 June 2017 [19] https://www.rera.punjab.gov.in/ Chhattisgarh Haryana Assam Telangana Himachal Pradesh Goa Tripura Puducherry Kerala 26 April 2017 [20] 04 October 2018 [21] https://rera.cgstate.gov.in/ http://www.haryanarera.gov.in/ 6 May 2017 [22] 4 August 2017 [23] 28 September 2017 [24] 24 November 2017 [25] 27 October 2017 [26] http://rera.telangana.gov.in/ http://www.hprera.in/ https://rera.goa.gov.in/ https://udd.tripura.gov.in/acsnrules 18 July 2017 [27] 18 June 2018 [28] https://rera.kerala.gov.in/ Manipur Mizoram 15 March 2019 [29] 6 http://udpamizoram.nic.in/RERA.HTML
