RERA Act in India
RERA Act in India- In May 2016, the Indian government passed the RERA Act to promote transparency in the home buying process. RERA was quickly put into action to address homebuyers, developers, brokers, and other real estate industry stakeholders’ concerns. RERA has introduced many changes since its establishment, and more are on the anvil. That’s why learning RERA rules and guidelines as a homebuyer or developer can help you manage the landscape of your estate with ease.
So look at RERA more closely, its effects, and more.
RERA, which is the full form of Real Estate Regulatory Authority, stands for accountability in the real estate sector.
Why is RERA (Real Estate Regulatory Authority) required?
According to the RERA Act, RERA committees were established across India to promote consistency and transparency and to regulate the real estate sector. For more information, see RERA Karnataka, RERA Delhi, RERA West Bengal, RERA UP, RERA Punjab, RERA Goa, etc.
With RERA in place, each builder or developer is required to inform homebuyers of construction progress, give them keys to their property by that date, and adhere to every principle specified by RERA to ensure transparency.
Key Advantages offered by RERA
RERA has produced a positive change in every facet of the real estate sector. Here’s how.
- RERA aims to reduce delays and mis-spelling of programs. To do so, authorities made RERA registration mandatory for all builders/developers before starting a project.
- RERA was subdivided into smaller regulatory bodies, each responsible for the development of real estate in a separate state or union territory in India.
- RERA rules apply to both commercial and residential properties.
- RERA’s standardization is aimed at protecting the rights of both consumers and developers.
- Within the real estate industry, the RERA Act has introduced more accountability and transparency.
How will RERA Impact Homebuyers?
RERA benefits homebuyers in some ways. Take a look at what they are.
- Builders should report every aspect of the project they have undertaken on the official website of RERA with the implementation of the rules of RERA. Most importantly, they should regularly update this data. This ensures transparency in the timelines of the project to buyers.
- According to the RERA rules, the land must be charged based on the area of the carpet or the city surrounded by walls.
- Builders have to put in a separate bank account 70 per cent of the money they receive from homebuyers, which they can only use for building purposes.
- RERA focuses on completing projects promptly. Any delay means that for the delay time, the developer will charge you interest of 2 per cent over the MCLR of SBI.
- You can disclose building defects for up to 5 years after you obtain a handover and have them rectified by the contractor.
- Developers are expected to resolve disputes with buyers within 120 days of filing.
- By telling two-thirds of the owners about such a move, the developer or contractor can not make changes or adjustments to the building plan. Only if a majority of homebuyers agree can it proceed?
- The Act forbids builders from taking over 10 per cent of homebuyers as an advance.
- When you notice a difference in your title deed at the time of possession, you may immediately ask the owner for payment.
Carpet area defined under the RERA Act
According to the guidelines, a home or apartment carpet area is identified as the area within the house’s four walls. This can not include the amenities or measurements of the common city that are usually included in the super built-up area.
How will RERA Impact Real Estate Agents?
Builders and builders need to be more open as RERA comes into effect.
- All schemes planned which reach an area of 500 sq. Mt. or more than eight apartments shall be registered with the RERA State concerned.
- Builders are expected to deposit 70% of the project money collected by checks from homebuyers in bank accounts. This means that construction companies are no longer able to engage in fraudulent transactions and money laundering. It is essential to account for every rupee spent and earned.
- There will be one model sale agreement among all builders and homebuyers.
RERA Act in different states of India – RERA Act in India
Two years have progressed since the enactment of the RERA Act, and it is being adopted by more than 22 Indian states and six union territories.
MahaRERA or RERA Maharashtra, for instance, received approximately 6,631 grievances (as of April 2019) and resolved 64 per cent disputes. Other states like Manipur, West Bengal, and Assam, are launching their RERA websites following the package.
What are the Penalties under RERA?
You may file a claim with RERA or the Court of Appeals as a homebuyer. Depending on the crime you list, a fine is levied on the creator or promoter. Here is a rundown of the penalties that apply when finding guilty.
- If developers do not register under RERA, they will pay 10 per cent of the total cost of the project. Besides, 5 per cent of the total cost of the project will be fined if they are found to give false information about the project.
- Violation of laws can result in imprisonment for up to 3 years for promoters and cost them 10 per cent of the total cost of the project.
- Agents are fined Rs.10,000 per day up to 5 per cent of the project’s value if they are found to be constructing or selling on their project without RERA registration.
- Severe failure to comply with RERA will require developers to pay a daily penalty of up to 5% of the likely value of the project.
- In the event of failure to comply with the Appellate Tribunal, the punishment is imprisonment for up to 1 year, or 10 per cent or both of the estimated cost of the project.
Also, consumers must also abide by RERA. If you are discovered guilty of failure to comply, you will have to pay a daily fee of up to 5 per cent of the project’s approximate cost. On the other hand, failure to comply with the Appellate Tribunal may result in imprisonment for up to 1 year, or 10% or both of the likely cost of the project.
How to Register Projects under the RERA
If you wish to register a scheme under RERA Kerala, RERA Arunachal Pradesh, RERA Haryana, RERA Sikkim, or any other state, follow these steps.
- Open a bank account as defined in RERA Act Section 4(2)(I)(D) and collect all the necessary documents.
- Full and apply Form A, the RERA registration form. You will also need to use Form B as a promoter or broker, stating your position in the real estate industry.
- Also, you may need to apply certain forms in compliance with RERA rules to explain the specifics of your design.
- To complete the registration process, charge the RERA registration fees. This amount varies from one country to another.
- Use the RERA number assigned to you and the project for all future contact once you have enrolled.
Projects that come under RERA
When RERA is complied with by all states and union territories, all real estate ventures must fall within its scope. Take a look at some factors in the meantime that decide when and when a plan comes under RERA.
- Projects that do not have a certificate of completion but were completed before the RERA Act was implemented are considered to be part of RERA.
- Projects that have completed construction for renovation/repair/ re-development purposes and that are not re-allocating, promoting, advertising, selling or allocating any homes, plots or buildings will not be subject to RERA’s liability.
- Through a new RERA registration, projects under construction will document each phase of development as a separate project.