Real Estate (Regulation and Development) Act, 2016

Introduction

Hello, I am Anup Singh Grewal, a dedicated real estate agent with years of experience in navigating the intricate world of real estate. I am passionate about helping clients find their dream properties while ensuring they are well-informed and protected throughout the process.

In this blog, I will be diving into the Real Estate (Regulation and Development) Act (RERA) rules 2016, which are crucial for anyone involved in real estate transactions in India. Understanding these rules can empower buyers, sellers, and agents alike, ensuring transparency and fairness in the market.

History of the Real Estate (Regulation and Development) Act, 2016

The Real Estate (Regulation and Development) Act, or RERA 2016, came into being to address the many issues plaguing India’s real estate market. Before RERA, buying a home was often a stressful experience due to frequent project delays and lack of transparency. The idea for regulating the sector was first proposed in 2009. After years of discussion and revisions, the draft bill was introduced in Parliament in 2013. It was finally passed in 2016 and came into effect on May 1, 2017. RERA established regulatory authorities in each state to oversee real estate transactions, ensure projects are completed on time, and protect buyers’ interests. By making developers register their projects and adhere to strict guidelines, RERA has brought much-needed transparency and accountability to the real estate sector, making the home-buying process more secure and reliable.

Scope and applicability of the Real Estate (Regulation and Development) Act, 2016

The Real Estate (Regulation and Development) Act, 2016, or RERA, is designed to bring more transparency and accountability to the real estate sector in India. It applies to all residential and commercial projects, requiring developers to register their projects with the state RERA before selling or advertising them. This includes projects with a plot area of 500 square meters or more or those with eight or more apartments. RERA also covers real estate agents, who must register to legally operate. The Act ensures that developers provide complete project information, stick to promised timelines, and deposit 70% of the funds received from buyers into a separate account for project use. It applies across all states and union territories in India, except Jammu and Kashmir. Overall, RERA aims to protect home buyers and ensure fair practices in the real estate market.

Need for the Real Estate (Regulation and Development) Act, 2016

1. To control and regulate the real estate sectors by shutting out malpractices;
2. To keep consumers out of perils such as delayed delivery, transfer of title of the property, the quality of amenities provided and necessary changes to be made etc., before purchase;
3. To appoint authorities to manage the real estate sector and to establish an Appellate Tribunal for each State. To enable home buyers to file complaints in case of any wrongdoing committed by the builders or developers; 
4. To contribute a good percentage to India’s GDP;
5. To create accountability and responsibility for the authorities so appointed;
6. To tighten the security on the use of investments done by the home buyers or investors;
7. To have a supreme authorisation on the registration for the projects required to be registered; and
8. To maintain quality in delivering the project to the buyers as per their interest and give scope for complaints to the authorities in case of any structural defects. 

Benefits of RERA Act 2016

The RERA Act was enacted to regulate the real estate sector, promote transparency, and protect consumer interests. It seeks to establish a fast-track dispute resolution mechanism and enhance accountability in the construction process. By doing so, it ensures that buyers have access to vital information, including project details, promoter’s profile, and timelines.

• For Buyers:
  • Increased Transparency: Buyers can now access all project-related information online, including approvals, project layout, and construction stages.
  • Protection of Investment: Ensures that the money paid by buyers is used only for the intended project and not diverted elsewhere.
  • Timely Delivery: Promoters are legally bound to complete projects on time, failing which they are liable to pay compensation to buyers.
  • Access to Information: Detailed information about the project and the promoter is available on the RERA website.
• For Promoters:
  • Clear Guidelines: RERA sets clear guidelines for project execution and delivery, reducing ambiguity.
  • Legal Protection: Ensures a legal framework to protect the interests of genuine promoters from frivolous complaints.
  • Increased Trust from Buyers: With greater transparency and accountability, buyer confidence in the real estate market improves.
• For Agents:
  • Standardization of Practices: Brings uniformity in the practices and conduct of real estate agents.
  • Legal Recognition: Provides legal recognition and registration, which adds to their credibility.
  • Credibility: Registered agents are viewed as more trustworthy by buyers and promoters.

 Impact of RERA Act 2016

 

•  The Changes in the Real Estate Market Since the Implementation of RERA:
  • The introduction of RERA has ushered in significant changes in the Indian real estate market. It has led to improved project management, with promoters adhering to declared project timelines and budgets. The requirement for all real estate projects to be registered with RERA has brought about greater discipline in the industry.
• Highlight Improvements in Transparency and Accountability:
  • Promoters are now mandated to register their projects with RERA and provide regular updates on the progress. This ensures that buyers have access to accurate and timely information. The act mandates that 70% of the money collected from buyers must be deposited in a separate bank account and can only be used for construction purposes. This has greatly reduced the risk of funds being diverted to other projects.

How to Register Projects Under RERA

• Step-by-Step Guide on the Registration Process:
  • Step 1: Visit the official RERA website of the respective state.
  • Step 2: Create an account or log in if you already have one.
  • Step 3: Fill out the application form with details of the project, including land title, layout plans, and promoter’s profile.
  • Step 4: Upload the required documents, including land title deeds, project plans, and financial statements.
  • Step 5: Pay the registration fee online.
  • Step 6: Submit the application and wait for approval from the RERA authority.
  • Step 7: Once approved, the project details will be available on the RERA website.
• Required Documents and Fees:
  • Documents like land title deeds, project layout plans, details of the promoter, and financial statements. Mention that the registration fees vary by state and project size. Typically, the fee can be a certain percentage of the project cost or a fixed amount per square meter.
• Common Mistakes to Avoid:
  • Common errors such as incomplete documentation, incorrect information, or missing deadlines that can delay the registration process. Emphasize the importance of accuracy and thoroughness in the application to avoid rejections or delays.

Responsibilities of the appropriate Government 

1. Notify the rules for the implementation of this Act, within six months of commencement of this Act
2. Establish the Real Estate Regulatory Authority, within one year of commencement of this Act, ie., latest by 30th April 2017.
3. Shall depute an officer, preferably, a housing secretary as an interim regulatory Authority
4. Establish the Appellate Tribunals within one year from its commencement, ie. , maximum by 30th April 2017.
5. Identify an existing Appellate Tribunal for the time being established under any other law in force, as the Appellate Tribunal until a full-time Appellate Tribunal is established.
6. Appoint members of the Appellate Tribunal and the Chairperson and members of the Regulatory Authority based on the suggestions and recommendations of the Selection Committee. 
7. Appoint employees and other officers of the Regulatory Authority and the Appellate Tribunal.
8. Identify and establish office space and other infrastructure for its functioning. 
9. To constitute the Real Estate Regulatory Fund, 2017. 
10. The Central Government is required to establish the Central Advisory Council.

  How to File Complaints Under RERA

• Step 1: Visit the official RERA website of the respective state.
• Step 2: Navigate to the complaint registration section.
• Step 3: Fill out the complaint form with details such as your name, contact information, project details, and the nature of the complaint.
• Step 4: Attach supporting documents, including the builder-buyer agreement, payment receipts, and correspondence with the promoter.
• Step 5: Pay the complaint registration fee, which varies by state.
• Step 6: Submit the complaint and note the complaint reference number for future tracking.

Projects exempt from the ambit of the Real Estate (Regulation and Development) Act, 2016

The following projects do not require to be registered under the Act when:

1. the area of land does not exceed 500 sq. metres;
2. the number of apartments does not exceed eight. 
3. In the case of renovation or repair or re-development:
4. where the area of land proposed to be developed does not exceed 500 square metres or the number of apartments proposed to be developed does not exceed eight, inclusive of all phases;
5. where the promoter has received a completion certificate for a real estate project before commencement of this Act;
6. For renovation or repair or re-development which does not involve marketing, advertising, selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project

FAQs

Conclusion

RERA has been a transformative force in the Indian real estate sector, bringing much-needed transparency, accountability, and protection for home buyers. Whether you’re a home buyer, developer, or real estate agent, understanding RERA is crucial for navigating the real estate market effectively.

I hope this comprehensive guide helps you understand the importance and benefits of RERA. If you have any questions or need further information, feel free to reach out vaasrealty.in