Understanding RERA : Everything You Need To Know About the Real Estate Regulation and Development Act

Everyone dreams to have their home. However, everyone can't afford to have a home, as the real estate price is still high in comparison to income level. The real estate agent doesn't have any fixed norms and regulation and the builders follow their own rule which will be beneficiary to them. In this process, the one who suffers the most is the common man. Therefore to protect the interest of the buyer and to reduce this exploitation the government of India introduced the RERA Act.

What exactly is RERA?

RERA represents Real Estate Regulation and Development Act. This bill was introduced in the year 2013 by the UPA 2. But this bill was enacted by the parliament in May 2016 and come into force with all its sections from 1st May 2017. So far, many states and union territories have notified their rules with RERA and others are expected to join soon.

Objectives

• This act will be followed by every state both on residential and commercial properties.
• Standardization of rules and regulations to protect the interest of buyer and developer.
• To bring transparency and answerability in the real estate sector.
•  To minimize rampant project delays.

The implementation of RERA is expected to bring relief to the buyers as the builder will be accountable for timely delivery and it will save the buyers from fraud sellers. The developers would also be beneficiary from the confidence of the consumer in a well-regulated environment. It is mandatory for the developer to get approval from various governmental agencies before launching any new projects and to mention all the information on the website made by the respective state RERA regulatory authority. The agents of real estate will be provided a registration number by the regulator which they need to mention in every property sale. This will decrease the possibility of misleading the buyer. This authority has a wide range to the power of imposing penalties and imprisonment of agents in case of violation of rules.

Benefits for home-buyers

• Builders have to disclose every detail of the project on the website and need to update these regularly.
• The buyer will have to pay only based on carpet area and the builder cannot charge them for other built-up areas like balcony, stairs, lobby, etc.
• Any dispute of the buyer needs to be resolved within 120 days.
• Any defect in the building will be the responsibility of the builder for 5 years and will be rectified by the builder within 30 days without any further charges; if he fails to do so then the buyer is entitled to get compensation under RERA.
• Timely completion of projects. And reduces the risk of builder insolvency and bankruptcy as he needs to deposit 70% of the money of the project in a separated bank account & can withdraw it based on completion of the project.
• The builder needs to submit the original approved plan of their project and any alteration to RERA.
• There is a facility of imprisonment of 3years for the developers and 1 year for buyer and agents for violation of the law.
• The developer can't demand more than 10% of the property cost as advance money before signing a registered sale agreement.
• The developers are not allowed to advertise, sell, offer and book any plot without registering under the RERA authority.

RERA is applicable on all developers and builders except the following;

• Where the area of land which going to be used does not exceed 500sq meters or the number of apartments which are proposed does not exceed 8.
• In case the promoter has received completion certificate before the introduction of RERA.
• For renovation or repair which does not involve any advertisement, marketing or new allotment of any apartment, building or plot.

Some other facts about RERA are, it is only applicable to the development of property not on renting properties. It also covers all residential and commercial construction programs such as building, shops, offices, etc.  And to ensure every family has a house of their own the government of India launched the Pradhan Mantri Awas Yojana wherein subsidy on loans is provided for the purchase of houses.

Registration process under RERA

• The mentioned document should be enclosed in hardcopy with the application.
• PAN Card and ITR of the last 3 years and the balance sheet of the builder.
• A builder must clarify about the apartment including the carpet area, number of floors, parking space, etc, and a declaration by the builder of legal title of the land with proof.
• Details of the project: location, layout plan, etc, ownership documents with the information of the persons' involved such architects, workers, and others.

For the real estate agents

• One needs to fill the application along with fee and documents to get registered with the authority. Then you will receive a registration number which needs to be mentioned in every project and they are required  to update book of account, documents related to the transaction, etc on a quarterly basis & also share all information with buyers. Agents can be punished for misrepresentation of documents.
• Under section 31 of RERA, a person can file a complaint with RERA for violation of the provision of the Act. In case the person is not satisfied with the decision given by RERA; he may file an appeal to the RERA Appeal Tribunal within 60 days. From the date of the decision made by Appellate Tribunal, one may appeal to the high court within 60days.

Conclusion

RERA is an initiative taken by the government of India to protect the interest of the homebuyer. The act tries to cover from the launch of the project and also makes the developers accountable for post-sale issues. All state government is required to establish a real estate regulator and website to provide benefits to the stakeholders.

Hey. I am Namrata Priyadarshini. I did my Post Graduation in Political Science from Utkal University, odisha. The motive of my life is to contribute towards the growth and development of the society.I love to write about social issues.

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