The Real Estate (Regulation and Development) Act, 2016 (the Act, from hereon) is an initiative by Indian Government to enhance transparency in the real estate related transactions by creating a systematic and a uniform regulatory environment, thereby protecting consumers’ interest and making real estate developers liable for timely completion of projects.
The RERA bill was drafted in the year 2013 and was passed by the Rajya Sabha on 10th March 2016 and by the Lok Sabha on 15th March 2016. It received the Presidential nod on March 25th 2016 and came into force on 1st May 2016 with 69 of 92 sections notified.
Yes, A Central Advisory council will be set up to advice the Central Government on the implications of the Act to recommend policies in order to protect consumers’ interest and to supervise the growth & development of the real estate sector. In addition, there will be a dedicated Appellate Tribunal set up for RERAs to hear appeals from orders of the RERAs and the adjudicating officer.
As per the RERA rules, the consumer is entitled to receive information about the sanctioned plan, approved layout plan, stage wise progress of the project, carpet area and facilitation of basic amenities & services such as drinking water, electricity, sanitation etc.
The consumers can claim possession of the unit and the association of consumers can collectively claim possession of the common areas as declared by the real estate developer
In case the real estate developer fails to meet the timeline or does not deliver what was promised then the consumer has the right to claim refund of amount paid with prescribed interest and compensation for the same
It is mandatory for the consumers to make payments on time to the real estate developer as per the agreement. He/she is also liable to pay the share of registration charges, municipal taxes, maintenance charges, ground rent, electricity charges, water supply charges etc.
Once the real estate developer issue the occupancy certificate, the consumer is required to take possession within two months
The consumer is liable to pay prescribed interest if he/she fails to make timely payments for his purchase
It is mandatory for a consumer to actively participate in the formation of an association, a consumer federal or any cooperative society
A consumer must participate towards the registration of the conveyance deed of the unit
An escrow account is a bank account to which an account holder makes periodic deposits, and permit the bank to withdraw funds to pay for certain fixed obligations. As per RERA regulations, a real estate developer is required to open an escrow account in a government recognized bank. As per the Act, to prevent siphoning or using of funds collected from one project for business expansion, it is mandatory for the developer to deposit 70% of all collections in an escrow account maintained with a scheduled commercial bank. The real estate developer can withdraw the funds solely for the purpose of the construction of the said project in proportion to the stage of work. The request for withdrawal of the funds is to be certified by an engineer, architect or a chartered accountant. This will give relief to the consumers from the pain of project delays and will assure them that their payments to the real estate developer are being used for the development of the project where he/she owns a unit/units.
It is mandatory to set up an Appellate Tribunal by the state government within one year of the commencement of the Act. So, the aggrieved consumer is required to approach the RERA in the case of disputes and the RERA will prescribe penalty or punishment by acknowledging the nature of the violation.
If in case the consumer is aggrieved by the decisions of the RERA or an adjudicating officer then he/she can appeal to the Appellate Tribunal. This setup will speed up the process of dispute settlement because it minimizes the involvement of the existing judicial system. Further, if the consumer is not satisfied with the decision of the Appellate Tribunal then he/she can appeal in the High court within 60 days of receiving the decision.
In this case, the state Government will appoint any other body as Appellate Tribunal that currently exists to hear the appeals in the interim. If in case the Appellate Tribunal is established during the course of hearing then the particular appeal will be transferred to the same under and will no longer be with the interim body.
In order to escalate the responsibility and accountability of real estate developers towards consumers, the RERA has made the following compulsory for them:
It is mandatory for the real estate developer to register the project with the RERA and obtain a valid registration number before proceeding
Any kind of marketing, advertising or selling of units is strictly prohibited before the registration of the project
The real estate developer is required to submit all documents related to the project which is considered necessary by the RERA
The real estate developer must deposit 70% of the payment received from the consumers in an escrow account and ensure that the amount is solely used for the development of the project for which it was taken
Must adhere to the project plan at all times
Refund the money taken from the consumers with an applicable interest in case the project cannot be completed.
Compensate the consumer for the time delay if any
To repair any structural defects in the construction even after 5 years of handover of the project
The following documents are required while registering a project with RERA -:
Details of the project such as name, address, type, names and photographs of the promoters etc.
Details of the project already launched by the real estate developer and their status (in the preceding 5 years)
Approval and commencement certificates obtained from the competent authority for each phase of the project separately. This is to the benefit of both consumer who will firmly know that no changes in the particular phase will be further allowed and the real estate developer who will enjoy the flexibility of changing plans for future phases of the entire project
Sanctioned layout plan, the development plan for the project and details of basic facilities being made available like drinking water, electricity etc.
Pro forma of allotment letter, agreement for sale and conveyance deed to be signed with the consumers
Location of the project with clear demarcation of the land for the project
Number, type and carpet areas of units to be sold
The details of open areas if any like terraces, balconies etc.
Details of associated engineers, contractors, architects and intermediaries in the project
A declaration stating that the land of the project is verified &authenticated and the developer has a legal title to it
A written declaration stating that the project will be completed within specified period of time and 70% of the received funds from the consumers will be deposited in a dedicated escrow account and this amount will be used only for that particular project
Carpet area is the net usable area which excludes common areas, balconies, verandas, terraces etc., whereas the super built-up area could be the addition of both. Therefore, to let the consumer know what he/she is paying for, it is mandatory for the real estate developer to specify the carpet area thus enacting a straight forward definition to be adopted across the country.
The real estate developer has to specify the project completion time in the RERA application form. Hence,
the real estate developer is accountable to follow the timelines otherwise, he will suffer losses/ penalties.
The real estate developer who will violate the order of the appellate Tribunal of the RERA may face imprisonment up to three years with a fine of up to 10% of the total estimated cost of the project in question.
RERA will prohibit promoter from accessing its website for that project, specify his name in list of defaulter, display his photograph on its website and also inform RERAs in other States & Union territories about such revocation or registration
RERA will direct the bank holding the project back account, to freeze the account, and take necessary actions including consequent de-freezing of the said account to facilitate remaining development work in accordance with provisions of section 8
RERA may issue necessary directions to protect interest of allottees
Yes, both the developers and the landlord or any such party which is the beneficiary of a sale of a project & receive payments from consumers as real estate developers (Promoters) are liable to adhere to the Act.
As per the government rules, only registered agents are legally allowed to function in the real estate business. Also, the RERA makes it mandatory for a developer to make a declaration about the real estate agents, architects, structural engineers and similar parties to the appellate Tribunal of the RERA.
The RERA have strict guidelines for the marketing of the projects. As per the rules, anything shown in the marketing material must be same with the final product or else real estate developer will be liable to penalties under the Act. Also, the advertisement or prospectus issued or published by the developer must mention the website address of the authority, where all details of the registered project have been entered along with the registration number obtained from the authority.
Yes, a developer can do so by taking written approval of 2/3rd of project’s consumers and also the prior approval of the RERA. If a consumer or his family holds more than one unit in the project then he/she will be considered as one consumer only.
As per the RERA act, 2016, an intermediary is required to be registered with the RERA and retain a valid registration number before facilitating any real estate deal on the behalf of any real estate developer. He/she is also required to maintain and preserve account logs and other documents as prescribed by the Act. Also, he/she have to facilitate all information and provide any further assistance as prescribed by the Act to the consumer.
The Act promotes professionalism in conducting real estate business and prompts intermediary to adopt ethical means of dealing with consumers.
Fraud, misrepresentation, breach of any terms & conditions of the Act and any sort of unfair practice can cause the registration to be revoked by RERA after not getting a satisfactory reply from the intermediary.
Disclaimer :- Apnarera.com is an online media/website/platform/portal to display or broadcast information related to the Real Estate (Regulation & Development) Act (RERA) and RERA registered projects & agents. Apnarera.com is a private portal and should not be considered as the official / Government website belonging to Real Estate Regulatory Authority (RERA) of Central Government or any State Government. Viewers are requested to verify the RERA registration number and the details of the projects / agents listed at apnarera.com with the respective developers or agents, as the case may be. We also advise the visitors to validate the RERA registration information with the Real Estate Regulatory Authority of their respective states by visiting the official website of RERA or RERA office of that state. APNA RERA doesn’t take any responsibility for any omissions, errors and inaccuracy in the contents provided herein. Visitors are advised to validate and verify all the information independently from the official RERA website or the RERA office of the respective state before involving in any transactions. Read more...