File Your Income Tax Return Before 31st July 2024.
India being a developing country, urbanization and industrialization plays a major role. The urbanization has a major role in the economy of the country. Real Estate can be considered to be a core sector of the country. If you are involved in the Real Estate business or are looking for a property then you should know about RERA. In this article we will discuss, Synopsis of RERA.
|
Table of Content |
Real Estate
Real Estate is the second-highest employment generator in India after agriculture. Further, it employs around 5.5 crore people in the country. According to an IBEF report, Indian real estate is expected to grow to 1US$ trillion by 2030. As of 2021, it contributed 7% of the country’s GDP. Further, by 2025, it is expected to contribute 13% of the country’s GDP. Moreover, According to Colliers India, the Indian real estate sector is expected to grow by 4%.
RERA (Real Estate Regulation Act), 2016
RERA is established for the regulation and promotion of the real estate sector. Further, it ensures the sale of plot apartments, buildings or real estate project is efficient and transparent. Moreover, it ensures to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute readdress. Additionally, it also establishes an Appellate Tribunal to hear appeals from the decision, direction or orders of the real estate regulatory authority and the adjudicating officer and for matters connected therewith or incidental thereto.
The act came into being on 1 May 2016.
Terms Used in RERA
The following are some terms used in RERA,
- Projects: The development of a building or a building consisting of apartments, or converting an existing building or a part of it into apartments, or the development of land into plots or apartments, for the purpose of selling all or some of the said apartments or plots or building, and includes the common areas, the development works, all improvements, and structures.
- Promoters: A person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignee.
- Real Estate Agents: Any person, who negotiates or acts on behalf of one person in a transaction of transfer of his property, in a real estate project, by selling it to another person or transfer of property, of any other person to him and receives remuneration or fees or any other charges for his services whether as a commission.
Benefits and Key Provisions of RERA
The following are some of the benefits of RERA,
- Builders have to disclose every detail of the project on the website and update the details on a regular basis.
- The buyer will have to pay only on the basis of carpet area
- Timely completion of projects
- Any defect in the building will be the responsibility of the builder for 5 years.
- Any disputes with the buyers has to be resolved within 120 days.
Further, here are some Key Provisions of RERA,
- It is followed in every state of India and this regulation applies to both residential and commercial properties.
- The sale of property will be based on carpet area and not on super built-up area.
- Builders are required to deposit 70% of the funds collected from buyers in a separate bank account for the construction of the project.
- Projects with a plot size of a minimum 500 sq. mt or 8 apartments need to be registered with the RERA Authority.
- Builders require to submit the original approved plans for their project and the alterations made to RERA.
- Developers cannot demand more than 10% of the property cost as an advanced payment booking amount before signing a registered sale agreement.
- Developers are not allowed to advertise, sell, offer, market or book any plot or apartment without registering to the authority.
The need for RERA and its Objectives
Suppose you want to buy a flat or build you own house. You contact a Builder lobby and they show you a prospectus of a project. You like and purchase the property. In these cases there are chances of fraud, delays and the property not being upto the prospectus. The RERA puts a check on this by demanding transparency. Further, you can also lodge a complaint to the RERA against the builders lobby.
The following are some of the objectives of RERA,
- Fair Transaction
- Transparency
- Timely Delivery
- Quality
- Speedy Adjudication
Document Requirement for Registration
The following are the documents that you will need to register a project with the RERA,
- PAN card
- ITR of the last 3 years
- Specifications of the apartment
- Legal Title of the land with proof
- Details of the land
- The consent letter of the actual owner (if the builder is not the owner)
- Details of the project
- Information of the people involved
Real Estate Agent
You need to fill an application along with fees and documents to get registered with the RERA. You will receive a registration number from the regulator. Moreover, you need to mention this number in every property sale. Further, you need to maintain the books on accounts, records and documents related to every transaction. Further, you need to share all the information and documents about the project to the buyer. However, you have to be careful and truthful because you may be suspended for misrepresentation and fraud.
Filing a Complaint
Any aggrieved person can file a complaint with the RERA, for any violation of the provisions of the Act.
However, if you are not satisfied with the decision made by the RERA or its officers, you can file an appeal before the Appellate Tribunal. Further, you a time of 60 days to lodge your appeal.
Further, if you are still unsatisfied with the decision of the Appellate Tribunal, you can file a complaint to the High Court. However, you have to file the complaint within 60days of the decision of the Appellate Tribunal.
Penalties and Punishment
The following is a table for the penalties and punishments for the violation of the RERA provisions,
| Offence | Penalty | |
| Promoter | Non-registration of a project | 10% of the estimated cost of real estate project |
| Violation of law | Imprisonment for up to 3 years with or without fine for 10% of the estimated cost of the project | |
| Providing false information | 5% of the estimated cost of the project | |
| Other contraventions | 5% of the estimated cost of the project | |
| Agents | Non-registration of a project | ₹ 10,000 per day of default which may extend up to 5% of the cost of property |
| Failure to comply with Authority | Penalty on a daily basis which may extend up to 5% of the estimated cost of plot | |
| Failure to comply with Tribunal | Imprisonment for up to 1 year with or without fine of 10% of the estimated cost of the project | |
| Home-buyers | Failure to comply with Authority | Penalty on a daily basis which may extend up to 5% of the estimated cost of apartment |
| Failure to comply with Tribunal | Imprisonment for up to 1 year with or without fine of 10% of the estimated cost of the apartment |
Conclusion
With the implementation of the RERA, an authorised body is formed that deals with both residential and commercial transactions of real estate.It aims to make the work easier, transparent and timely. It requires full disclosure of information to a buyer. So that, you as a buyer can make an informed decision. The RERA was introduced in 2016 to protect the interest of the home buyers and to protect them from malpractice of unfair builders.
