What is RERA?
RERA is the abbreviation for Real Estate Regulatory Act which was introduced with a perspective to establish regulatory authorities for registering the residential state projects. Furthermore, it is important for the builders, promoters and real estate agents to have the RERA registration.
Who can all apply for RERA Registration?
- Builders who want to build an independent building or apartments.
- Builders who are responsible for modifying the existing apartments.
- Builders, estate developers, colonizer and contractors.
What are the benefits of RERA Registration?
The advantages of registering under the RERA, 2016 are as follow:
-
Timely delivery by the Builders
The builders often use to misinterpret the clients, stating that they will deliver the project on time. With the implementation of the RERA Act, builders make sure that they complete their project on a timely basis. In case, the builders are unable to meet the deadline within the time frame; then they are liable to refund the amount to the client with interest.
- Need to Deliver Accurate Project Details
The Builder represents and promotes its project stating various amenities and infrastructure information during the construction stage. The builder cannot make any changes in the projected plan. Any fault in the same will penalize the builder for paying 10% of the project expenses and imprisonment up to three years.
- Ensuring all permissions
This RERA bill ensures that builders do not make false promises to the purchasers about the pre-launch offers stating that they will provide huge discounts. The buyers get attracted by the proposals and do not look for the clearances. This act can help the purchasers in this way.
- Ensuring Proper Structure up to five years
It is the responsibility of the builder or constructor to repair structural defect for up to five years. In case the buyer finds any defects in the infrastructure and development of the building, then he/ she can raise a complaint against this in accordance to this act.
- No Advertisement is permitted without RERA Registration
Promoters are not allowed to advertise any project without RERA registration with the Real Estate Regulatory Authority established under this Act. Additionally, each advertisement needs to carry the RERA registration number.
- Reduction of Booking Amount
The sum to be paid by the buyer has been reduced from 20% to 10%, which needs to be remunerated only after registering the contract for sale with the builder. Termination of the contract is allowed only if the buyer defaults on payment thrice. The buyer is entitled to serve a 15-day notice.
The Validity of RERA Registration
The approved registration will be valid for a period, specified by the promoter for completion of a real estate project. Also, it will be valid for the period specified to complete a particular project, as mentioned in the affidavit following the application form.
However, the validity of such registration can be extended under the following circumstances;
- Force Majeure like drought, war, flood, fire, cyclone, earthquake or any other calamity caused due to natural factor, affecting the usual development of a real estate project
- Other than force majeure or the ‘Act of God’, the concerning authority may extend the registration to maximum one year in case it feels that the circumstances and reasons for the extension of the case are reasonable
RERA Registration Process
Every promoter and agent need to register themselves with their respective state RERA Authority. There is a separate provision for the steps involved in the registration of agents and for registering for a real estate project. Let’s look at bot the procedures in detail;
Registration for Real Estate Projects
The promoters need to convene a board meeting concerning the following to register for a project;
- Opening a separate bank account to cover the cost of construction
- Drafting of the RERA registration application
- Attaining approval for the allotment letter, sale agreement, and sales deed
- Obtain the title search report concerning proposed land
- Acquire essential NOCs and licenses from the government authorities such as the Fire Department, National Highway Authority of India, Airport Authority of India, National Authority Disaster Management Authority etc.
- Collecting all the necessary documents for filing application in Form A
- Submitting the RERA registration application with the respective state authority along with the prescribed fees
Registration of Agents
Real Estate Agents need to follow the steps given below to acquire the registration;
- For obtaining RERA Registration, you need to file a duly filled form along with the prescribed fees and documents
- After you file the application, you will receive a registration number from the regulatory body which must be provided in documents related to the sale of the property
- Also, you need to maintain a Books of accounts, records and other transaction-related documents quarterly
- You have to provide detailed information and supporting documents regarding the project you entered with the buyer.
- While applying, you must be aware that the agent may be suspended in case of misrepresentation of facts or fraud at the time of RERA registration.
Documents Needed for RERA Registration
Although the documents required for registering under RERA differs from state to state here are some of the basic documents required for RERA Registration;
Documents Needed by Developers to apply for an ongoing project
- Personal details of the promoter such as name, address, photo, and contact details
- In case of other than the individual promoter, the details of partners, chairman, directors, and another authorized person. Additionally, the details of the entity, it’s type, name, address, etc. of the entity has to be provided
- Copy of the promoter’s identity proof such as PAN and Aadhar Card.
- A copy of the approval obtained from the concerned authority.
- Development plan
- Project details
- ITR and audited financial statements of the last three years
- Title deed, along with the chain of title.
- Ownership documents like sale agreement, perforation of the allotment letter, conveyance deed, etc.
- Information on architect, engineers, etc.
Documents Needed by Agent
- Details of real estate agent like name, photograph, partners, directors, address, contact details
- PAN and Address of Real estate agent
- Address proof
Who Does Not Need to Register Under RERA?
The specified persons are exempted from registering under the Real Estate Regulatory Act, 2016 (RERA);
- The area of land proposed for developing is less than 500 square meters or the number of apartments designed does not exceed eight apartments, including all the phases, are exempted from registration.
- The promoter has received the completion certificate for a real estate project prior before the commencement of RERA.
- The real estate project requested for remodelling, replacement or development of projects is those projects which do not require marketing, advertising, selling or new allotment of an apartment
Offences and Penalties
If any of the entitled people fail to obtain a registration, they are liable for penalties under Section 59 or Real Estate Regulatory Act, 2016 as follows;
- Penalty up to 10% of the estimated project cost
- In case of continuous default, an additional fine up to 10% of the estimated project cost
- Imprisonment up to three years
Conclusion
RERA Registration is applicable for promoters, builders or anyone involved in the purchasing or selling of housing properties. Also, it is mandatory to hold the registration under the RERA unless exempted by law. Furthermore, the Real Estate Regulation Act, 2016 was introduced to provide the rules and by-laws for the supervision of buying, selling and construction of housing properties.