Last Updated On:
July 23, 2020, 7:13 p.m.
The Real Estate Regulation and Development Act, 2016 is an Act to protect home buyers and helps to enhance investments in the real estate industry.
As per RERA Act 2016, Without registering the real estate project with RERA established under this Act, no promoter shall advertise, book, sell, market, offer for sale or engage any persons in purchasing any apartment, plot, or building, in any real estate project or part of it, in any planning phase, without registering the real estate project with the RERA established under this Act.
The Purpose of RERA Act:
- To establish the Regulatory Authority and promotion of the Real Estate industry.
- To make sure there is transparency in all real estate projects.
- To protect the interest of buyers in the Real Estate Sector and to create an adjudicating mechanism for speedy dispute resolution.
- To provide complete details about the Promoter.
- To Provide recommendations to appropriate Government authority in matters relating to the development & promotion of the real estate industry.
Features of RERA Act:
- RERA establishes the State Real Estate Regulatory Authority as the government body for redressal of grievances against any builder.
- This law governs both the residential and commercial real estate transactions.
- RERA Act makes it mandatory for developers to post all details & information related to project plan, layout, government approvals, land title status, sub-contractors to the project, scheduled for completion with the State Real Estate Regulatory Authority (RERA) and then in effect pass these details to the consumers also.
- In case of any violation of the RERA Act, the jail term for a developer is a maximum of three years with or without a fine.
- RERA Act ensures that any delay in project completion will make the developer accountable to pay the same interest as the EMI being paid by the consumer to the bank back to the consumer
- The developer cannot make any changes to the plan that had been sold without the written consent of the buyer.
- Every project measuring more than 500 square meters or having more than eight apartments will have to be registered with the RERA.
Key points to remember under RERA Act:
- Promoter has to deposit 70% of the funds collected from buyers in a separate bank account.
- Projects with a plot size of a minimum of 500 sq.mt or 8 apartments must be registered with Regulatory Authorities.
- The liability of developers for structural defects is for five years duration.
- Imprisonment of up to 3 years for the promoter and up to 1 year in case of agents and buyers for violation of any terms as per RERA Act 2016
RERA REGISTRATION PROCEDURE:
1. Projects (Application by Promoter): –
- An application to the Authority for registration of the real estate project shall be made in writing in Form, along with below documents & information
- PAN card of the promoter
- The annual report along with the liabilities, promoter debt to asset ratio, audited balance sheet, P&L statement, cash flow statement, directors report and the auditor’s report for last three financial years and where annual report is not available, the audited profit and loss account, balance sheet, cash flow statement and the auditor’s report of the promoter for the immediately preceding three financial years;
- The number of open parking areas and the number of covered parking areas available in the real estate project;
- Authenticated copy of the legal title deed reflecting the title of the promoter to the land on which development of the project is proposed along with legally valid documents for chain of title with validation and authentication of such title;
- Details of encumbrances on the land on which construction of the project is proposed; including details of any rights, interest, litigation, title, dues, and name of any party in or over such land. The non-encumbrance certificate is issued by the concerned revenue authority like Tehsildar or above.
- Where the promoter is not the owner of the land on which development of the project is proposed, details of the consent of the owner(s) of the land along with a copy of the registered collaboration agreement, development agreement, joint development agreement or any other agreement, as the case may be, entered into between the promoter and such owner and copies of a title and other documents reflecting the title of such owner on the land on which project is proposed to be developed.
- Name, photograph, contact details and address of the promoter if it is an individual and the name, photograph, contact details and address of the chairman, partners, directors, and the authorized person, in case of other entities.
2. Real Estate Agents:
- Every real estate agent shall make an application in writing to the Authority in Form RERA-I, in triplicate, for registration along with following documents, namely:- The brief details of agent enterprise including its registered address, name, type of enterprise
- The particulars of registration whether as a society, company, partnership, proprietorship, etc. including the bye-laws, MoA, AoA, etc. Name, contact details, address, and photocopy of the real estate agent, if it is an individual and the Name, contact details, address and photocopy of the partners or directors, etc. in case of other entities.
- The authenticated copy of the PAN card of the real estate agent.
- The authenticated copy of the address proof of the place of business.
- Such other information and documents, as may be specified by regulations.