Real estate sector in India is one of the key sectors when it comes to revenue generation. Multiple builders, brokers and vendors manage to fish out huge profits from this sector. But like in other sectors, certain events in this segment do go out of hand sometimes. In order to keep a close check on the policies and procedures and to ensure fair dealing between builder and buyer, a government bill was passed on March 15, 2016 which was called RERA, Real Estate (Regulation and development) Act 2016.
What is RERA?
The Real Estate (Regulation and Development) Act (RERA) 2016 was formulated to protect the interest of homebuyers and safeguard them against unfair practices of real estate and housing project developers Under RERA, it’s compulsory for developers to obtain all mandatory approvals from various government agencies before they can reveal the project to the public. The developers have to put all the information relating to project on appropriate website of State RERA Authority established by RERA. One of the primary benefits of RERA is the simplification of procedure to file a complaint in RERA authority. Earlier, home buyers had to file a complaint with the Consumer Dispute Redressal Commission) CDRC, which took ample amount of time in disposing of complaint for possession delay. The RERA regime makes it faster to file a complaint and take action against the builder for possession delay.
Objectives of RERA
The RERA Act has the following objectives:
- To maintain duty towards allottees and guard their interest.
- To infuse transparency, make certain fair-play and decrease frauds and delays.
- To establish symmetry of data among the promoter and allotee. To introduce professionalism and pan India standardization.
- To implement compulsory obligations on each promoter and allottees.
- To establish speedy-tune dispute resolution mechanism. To establish regulatory oversight mechanism to out into effect contracts.
- To sell right governance in the quarter which in turn would create investor self belief.
How will RERA impact home buyers
Some of the important compliances are:
- Informing allottees about any minor addition or alteration.
- Sharing information like project plan, layout, government approvals, land title status, sub-contractors.
- No launch or advertisement before registration with RERA.
- Consent of 2/3rd allottees about any other addition or alterations.
- Consent of 2/3rd allottees for transferring majority rights to 3rd party.
- Increased assertion on the timely completion of projects and delivery to the consumer.
- An increase in the quality of construction due to a defect liability period of five years.
- Formation of RWA within specified time or 3 months after majority of units has been sold.
Hence the most positive aspect of this Act is that it provides a unified legal regime for the purchase of flats, apartments, etc. and looks to standardise the practice across the country.
How to register projects under RERA
Following are the guidelines to follow in order to register a project under RERA.
- Applying for project registration with RERA.
- Registration of agents/brokers with RERA.
- Mandatory registration of new and existing projects with RERA before launch.
- Maximum 1 year extension in case of delay due to no fault of developer.
- Timely updating of RERA website.
- Annual audit of project accounts by a CA.
- Authenticated copy of all approvals including commencement certificate, sanctioned plan, layout plan, specifications, plan of development work, proposed facilities,
- Proforma allotment letter and agreement for sale and conveyance deed.
- Separate registration of different phases of a single projects.
- Developers to share details of projects launched in last 5 years with status and reason for delay with RERA.
- Conveyance deed for common area in favour of RWA.
- Project completion time period. Construction and land title insurance.
- Dispute resolution within 6 months at RERA and RERA appellate tribunals.
