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 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 redressal. The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016. The Act came into force on 1 May 2016 with 59 of 92 sections notified. Remaining provisions came into force on 1 May 2017.
Here’s what you need to know about RERA
The Real Estate Regulation and Development (RERA) Act, 2016 is considered as one of the landmark legislations passed by the Government of India. Its objective is to reform the real estate sector in India, encouraging greater transparency, citizen centricity, accountability and financial discipline. This is in line with the vast and growing economy of India as in future many people will be investing in real estate sector.
Punitive provisions including de-registration of the project and penalties in case of contravention of the provisions of the Act or the orders of the Authority or the Tribunal;
Mandatory registration of real estate projects and real estate agents who intend to sell any plot, apartment or building, with the Real Estate Regulatory Authority
Mandatory public disclosure norms for all registered projects like details of the promoters, layout plan, plan of development works, land status, status of the statutory approvals, disclosure of pro-forma agreements, disclosure of names and addresses of real estate agents, contractors, architect, structural engineer etc.
Provision of RERA
RERA for Promoters/Builders/Developers
Promoters will have to furnish the following information and documents for registration of a real estate project with the regulatory authority:
In accordance to the Rules, the Promoters of ongoing projects which have not received completion certificate shall, within the times specified, make an application to the Regulatory Authority in the form and manner as specified in rules.
Within a period of three months of the application for registration of the project with the Authority, the Promoters are to deposit in a separate bank account, 70% of the amounts already realized from the allottees, which have not been utilized for construction of the project or the land cost for the project. If the receivable of the ongoing project is less than the estimated cost of balance construction, then the promoter shall deposit 100% of the amounts to be realized in the separate account.
Here the Ongoing Projects means a project where development is going on and for which completion certificate has not been issued but exempts such projects which fulfill any of the following criteria on the date of notification of these rules, namely.
In respect of layouts where the streets and civic amenities sites and other services have been handed over to the Local Authority and Planning Authority.
In respect of apartments where common areas and facilities have been handed over to the registered Association consisting of majority of allottees; the provision facilitating is as per provision of the Karnataka Ownership Act, 1972.
Where all development works have been completed as per the Act and certified by the competent agency and sales/ lease deeds of 60% of the apartments/ houses/ plots have been registered and executed.
Where all development works have been completed as per the Act and certified by the competent agency and application has been filed with the competent authority for issue of completion certificate /occupation certificate
Where Partial occupancy certificate is obtained to the extent of the portion for which the partial Occupancy Certificate is obtained.
RERA for Real Estate Agents
A Real estate agent is basically an intermediary between the Builders and the buyers. They have a strong presence in real estate sector as they have the marketing skills to profitably buy or sell a property. A buyer does not know all the property details and a Builder does not sell his properties himself, thus, a real estate agents’ role is of paramount importance. RERA has set certain guidelines for the real estate agents in order to prevent any wrongdoing by them.
Under this Act, the Real Estate Agent shall furnish the following information and documents for registration along with the required forms with the regulatory authority:
RERA for BUYERS/ALLOTTEES