RERA: Know RERA Act, Registration Process & Documents

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Implications of RERA Act and Authority

  • Each state set up the Real Estate Regulatory Authority to regulate real estate development.
  • Provisions applicable to both residential and commercial properties.
  • Standardization of norms to protect the interests of buyers and developers.
  • Expected to bring in transparency and accountability in the real estate sector.
  • Aims to minimize rampant project delays and mis-selling.

RERA stands for Real Estate Regulatory Authority

RERA is an act for regulation and promotion of the real estate sector to ensure the sale of apartment, plot or building in an efficient and transparent manner. The Act aims to protect the interest of consumers. It was enacted by the Parliament in May 2016 and the Act has come into force with all its 92 sections from 1st May 2017 across India. So far, 14 states and union territories such as Uttar Pradesh, Gujarat, Bihar, Madhya Pradesh, Odisha, Andhra Pradesh, and Maharashtra have notified their rules with RERA and the others are expected to follow suit.

The implementation of RERA is expected to bring relief to the homebuyers as builders will be accountable for the timely delivery of the projects and to protect buyers from fraud sellers. The developers would also gain from the increased confidence of the consumers in a regulated environment.

It is mandatory for the developers to get all approvals from various government agencies before launching a project and disclose all the information on the website that the respective state RERA regulatory authority will set up.

Real estate agents will be provided a registration number by the regulator which they have to mention in every property sale. This will help in eliminating the possibility of misleading the purchaser. The authority has wide ranging powers to impose penalties and imprisonment of agents in case of violation of the law.

Benefits of RERA for Homebuyers

  • Builders have to disclose every detail of the project on the website of authority and update these on a regular basis
  • The buyer will have to pay only on the basis of carpet area (area within walls). The builder cannot charge them for the super built-up area (lift, balcony, stairs, and lobby)
  • Timely completion of projects as 70% of the money collected from the customer has to be transferred in a separate bank account and can be used only for the purpose of completing the construction of the project
  • Any delay in completion of the project will require the developer to pay an interest rate of 2% above SBI’s Marginal cost of lending rate to the buyer for a delayed period
  • Any defect in the building will be the responsibility of the builder for a period of 5 years
  • Any disputes with the buyers need to be resolved within 120 days

Key Provisions of RERA

  • RERA will be followed in every state of India and this regulation applies to both residential and commercial properties.
  • The sale of property will be based on carpet area and not on super built-up area.
  • Builders are required to deposit 70% of the funds collected from buyers in a separate bank account for the construction of the project
  • Developers have to disclose the project details (financial statements, legal title deed, and others) on the website and update it on a quarterly basis related to the construction progress
  • Projects with a plot size of a minimum 500 sq. mt or 8 apartments need to be registered with the RERA Authority
  • Builders require to submit the original approved plans for their project and the alterations made to RERA
  • Developers and buyers both have to pay the same interest rate of 2% above SBI’s MCLR in case of any delay
  • Imprisonment of up to 3 years for the developers and up to 1 year for agents and buyers for violation of law
  • Any structural or workmanship defects in the building during the period of 5 years must be rectified within 30 days by the promoter without any further charges. If he fails to do so, the buyer is entitled to receive the compensation under RERA
  • Developers cannot demand more than 10% of the property cost as an advanced payment booking amount before signing a registered sale agreement
  • Developers are not allowed to advertise, sell, offer, market or book any plot or apartment without registering to the authority
  • The buyer can contact the developer in writing within 1 year of taking possession to demand the shortcomings in the project. Filling of complaints under RERARERA will be followed in every state of India and this regulation applies to both residential and commercial properties.
  • The sale of property will be based on carpet area and not on super built-up area.
  • Builders are required to deposit 70% of the funds collected from buyers in a separate bank account for the construction of the project
  • Developers have to disclose the project details (financial statements, a legal title deed, and others) on the website and update it on a quarterly basis related to the construction progress
  • Projects with a plot size of a minimum 500 sq. mt or 8 apartments need to be registered with the RERA Authority
  • Builders require to submit the original approved plans for their project and the alterations made to RERA
  • Developers and buyers both have to pay the same interest rate of 2% above SBI’s MCLR in case of any delay
  • Imprisonment of up to 3 years for the developers and up to 1 year for agents and buyers for violation of law
  • Any structural or workmanship defects in the building during the period of 5 years must be rectified within 30 days by the promoter without any further charges. If he fails to do so, the buyer is entitled to receive the compensation under RERA
  • Developers cannot demand more than 10% of the property cost as an advanced payment booking amount before signing a registered sale agreement
  • Developers are not allowed to advertise, sell, offer, market or book any plot or apartment without registering to the authority
  • The buyer can contact the developer in writing within 1 year of taking possession to demand the shortcomings in the project.

Registration of projects under RERA

All commercial and residential real estate projects will have to register except in projects where:

  • The promoter has received completion certificate of the project prior to commencement of Act
  • The area of land proposed to be developed does not exceed 500 sq. mt
  • The number of apartments is not more than 8
  • Any repair or renovation of an existing building or structure that does not require marketing, advertising, and selling of any apartment or plot

Documents Required for Registration under RERA

Following documents should be enclosed in hardcopy with the application:

  • PAN Card of the builder
  • ITR of last 3 years and the balance sheet of the builder
  • The builder must clarify about the apartment (carpet area, number of floors, parking space)
  • Declaration by the builder of having legal title of the land with proof
  • Details of the land (rights, title, mortgage)
  • If the builder is not the owner of the land, the consent letter of the actual owner with documents will be required
  • Details of the project (location, sanctioned plan, layout plan)
  • Ownership documents (proforma of allotment letter, agreement of sale)
  • Information of the persons involved (Architects, Engineers and others)

The Registration Process for Real Estate Agents

  • Fill an application of Filling of complaints under RERA along with fee and documents to get registered with RERA
  • You will receive a registration number from the regulator. This need to be mentioned in every property sale
  • On a quarterly basis, you are required to maintain the books of account, records and documents related to the transactions
  • Share all the information and documents about the project with the buyer
  • The agent may be suspended for the misrepresentation or fraud during the registration process

Filling of Complaints under RERA

  • Any aggrieved person may file a complaint with RERA for any violation of the provisions of the Act.
  • In case the person is not satisfied with the decision made by RERA or its officer, he may file an appeal before the RERA Appellate Tribunal within a period of 60 days
  • From the date of the decision made by Appellate Tribunal, a person can file an appeal to the High Court within 60 days

Penalties and Punishments under RERA

On Promoters

OffensePenalties
Non-registration of a project10% of the estimated cost of real estate project
Violation of lawImprisonment for up to 3 years with or without fine for 10% of the estimated cost of the project
Providing false information5% of the estimated cost of the project
Other contraventions5% of the estimated cost of the project

On Agents

OffensePenalties
Non-registration of a project
Rs. 10,000 per day of default which may extend up to 5% of the cost of property
Failure to comply with AuthorityPenalty on a daily basis which may extend up to 5% of the estimated cost of plot
Failure to comply with TribunalImprisonment for up to 1 year with or without fine of 10% of the estimated cost of the project

On Homebuyers

OffensePenalties
Failure to comply with AuthorityPenalty on a daily basis which may
extend up to 5% of the estimated cost of
apartment
Failure to comply with TribunalImprisonment for up to 1 year with or without fine of 10% of the estimated cost of the apartment

List of States and Status of RERA Notification and Authority

StateRules Notified (Y/N)Contact details of
grievance cell
Andhra PradeshY
Arunachal PradeshN
AssamN
BiharY
ChhattisgarhN
GoaN
GujaratY
HaryanaN
Himachal PradeshN
JharkhandN
KarnatakaN
KeralaN
Madhya PradeshY
MaharashtraY+91-22-26590036
ManipurN
MeghalayaN
MizoramN
NagalandN
OdishaY
PunjabN
RajasthanY
SikkimN
Tamil NaduN
TelanganaN
TripuraN
UttarakhandN
Uttar PradeshY
West BengalN
Andaman and Nicobar IslandY
ChandigarhY
Dadra and Nagar HaveliY
Daman and DiuY
DelhiY
LakshadweepY
PondicherryY

RERA FAQs –

What is meant by Rera?

RERA (Real Estate Regulation Act) was introduced in 2016 to protect the interest of home buyers from the malpractices of unfair builders.

How do I check my Rera registration?

To check for RERA registration, you can visit the RERA website of the concerned state, then go to verify option. In the next page, you can select the registration type, enter the registration number, fill the captcha and click on ‘verify’.

Why is Rera important?

With the implementation of RERA, an authorized body is formed in each state which governs both residential and commercial transactions of real estate. It has made registration of projects even for agents, full disclosure of information related to the project whenever the buyer requires. It also ensures that the project is getting completed on time. RERA ensures that the buyer’s interest is protected under various circumstances.

Is Rera compulsory for builders?

Yes, registration under RERA is compulsory for any builder who wants to develop a residential or commercial property on land that is more than 500 sq. Meters or the number of proposed apartments in all phases is more than 8.

What are the RERA guidelines?

Some of the crucial guidelines of RERA are:

  • Registration is mandatory where the land is over 500 square meters.
  • Project details have to be updated by builders and developers quarterly.
  • 70% of the money received from customers has to be transferred to an escrow account by the developer.
  • As an application fee or advance, a promoter can not accept more than 10% of the cost of the project.

What is the fees for RERA registration?

The registration fee for an individual applicant is Rs. 10,000. Whereas, if the applicant is a body corporate registered under the Companies Act, 2013, then the RERA registration fee is Rs. 25 lakhs.

What are the rules of RERA?

Some important rules of RERA are:

  • The registration fee varies from Rs. 10,000 to Rs. 25 lakhs as per the applicant.
  • The Real Estate Agent is required to display the number of his registration in all its branches and offices.
  • The application of renewal of registration by the agent should be made at least 60 days prior to the expiry of registration.
  • After renewal, the registration is valid for 5 years.

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