RERA UNLOCKED | Nikhil Pattani
The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, is a landmark legislation in the Indian real estate industry. It aims to bring accountability, transparency, and efficiency to the real estate sector, protecting the interests of homebuyers and ensuring fair practices among builders and developers.
Key Points of RERA
1. Establishment of Regulatory Authority (Section 20-41):
RERA mandates the establishment of a Real Estate Regulatory Authority in every state and union territory. This authority is responsible for overseeing and regulating the real estate sector, ensuring compliance with the provisions of the Act.
2. Registration of Real Estate Projects (Section 3-10):
All commercial and residential real estate projects with a land size of more than 500 square meters or eight apartments must be registered with RERA before launching. This registration ensures that developers adhere to approved plans and disclose all necessary information.
3. Transparency in Project Details (Section 4):
Developers are required to provide detailed information about the project, including land status, layout plans, approvals, agreements, and contractor details. This information must be uploaded to the RERA website, ensuring transparency for buyers.
4. Protection of Buyers’ Interests (Section 4, 11):
Developers must deposit 70% of the project funds in a separate escrow account to prevent the diversion of funds. This ensures that the money is used solely for the construction of the project.
5. Timely Project Completion (Section 8, 18):
The Act mandates developers to adhere to project deadlines. If the developer fails to complete the project on time, they are liable to compensate buyers for the delay. This provision aims to prevent project delays and ensure timely delivery of homes.
6. Standardized Sale Agreements (Section 13):
RERA introduces standardized sale agreements between buyers and developers. This reduces the risk of biased clauses favoring developers and ensures a fair and transparent agreement.
7. Grievance Redressal Mechanism (Section 31-39):
The Act establishes a fast-track grievance redressal system. Buyers can file complaints against developers for any violation of the Act. RERA authorities are empowered to resolve disputes and impose penalties on defaulting developers.
8. Quality Assurance (Section 14):
Developers are responsible for rectifying structural defects or poor workmanship within five years from the date of possession. This provision ensures that buyers receive quality construction and protection against defects.
9. Agent Registration (Section 9-10):
Real estate agents must also register with RERA to facilitate transparency and accountability in real estate transactions. Registered agents are expected to adhere to fair practices and maintain accurate records.
10. Penalties for Non-Compliance (Section 59-72):
RERA includes stringent penalties for non-compliance. Developers can face fines, imprisonment, or both for violating the provisions of the Act. This ensures strict adherence to the rules and deters malpractices in the industry.
Detailed Explanation of Sections
- Section 3: Prior Registration of Real Estate Project with RERA: No promoter can advertise, market, book, sell, or offer for sale, or invite persons to purchase in any manner any plot, apartment, or building without registering the real estate project with the Real Estate Regulatory Authority established under this Act.
- Section 4: Application for Registration of Real Estate Project: The promoter must apply to the authority for registration of the project, providing details such as the project layout, sanctioned plan, development schedule, financial details, and agreements with contractors.
- Section 8: Obligation of Authority consequent upon lapse of or on revocation of registration: In case the registration of a project lapses or is revoked, the authority must take necessary actions to protect the interest of allottees, which may include directing the association of allottees to take control of the project.
- Section 9: Registration of Real Estate Agents: Every real estate agent who intends to facilitate the sale or purchase of any plot, apartment, or building in a real estate project must register with the Real Estate Regulatory Authority.
- Section 10: Functions and Duties of Real Estate Agents: Registered real estate agents must not facilitate the sale of any project which is not registered under RERA, maintain proper books of account, records, and documents, and assist buyers in various processes.
- Section 11: Functions and Duties of Promoter: Promoters must disclose all project details on the RERA website, adhere to approved plans, and update project status quarterly. They must also be responsible for providing essential services and rectifying defects.
- Section 13: No deposit or advance to be taken by promoter without first entering into agreement for sale: Promoters must not accept more than 10% of the cost of the apartment, plot, or building as an advance payment without first entering into a written agreement for sale with the allottee and registering the said agreement.
- Section 14: Adherence to sanctioned plans and project specifications by the promoter: Promoters are required to carry out the development work in accordance with the approved plans and project specifications, and are not allowed to make any alterations or additions without the consent of at least two-thirds of the allottees.
- Section 18: Return of amount and compensation: If the promoter fails to complete or is unable to give possession of an apartment, plot, or building, they are required to return the amount received along with interest and compensation to the allottees.
- Section 20-41: Establishment and Functions of the Real Estate Regulatory Authority: These sections detail the establishment, composition, and powers of the Real Estate Regulatory Authority, which include ensuring compliance with the Act, protecting the interests of allottees, and promoting a fair and transparent real estate sector.
- Section 31: Filing of Complaints with the Authority or the Adjudicating Officer: Any aggrieved person may file a complaint with the authority or the adjudicating officer for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder.
- Section 59-72: Penalties and Adjudication: These sections outline the penalties for non-compliance with the Act, which can include fines, imprisonment, or both. The penalties vary depending on the nature and severity of the offense.
RERA is a comprehensive reform aimed at transforming the Indian real estate industry. By promoting transparency, accountability, and timely project completion, it seeks to restore buyer confidence and create a more organized and efficient real estate market. The Act empowers buyers, regulates developers, and aims to build a trustworthy environment for real estate transactions in India.
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