RERA Disclaimer

What is RERA?

The Real Estate (Regulation and Development) Act, 2016, was formulated to safeguard the interest of homebuyers and to infuse transparency and credibility into the otherwise unregulated real estate sector.

The Rajya Sabha passed the Bill on March 10, 2016, and by Lok Sabha on March 15, 2016, after multiple amendments to the regulations. While 59 of the 92 sections were notified earlier in 2016, the remaining were notified on March 2017, before the Act was finally executed on May 1, 2017. By far, 22 States and six Union Territories have notified the RERA rules and around 19 States have an active online portal.

What are the key provisions pertaining to the registration of real estate projects?

The key provisions included in the Act, notified by the Government of India, are mentioned below.

• The Act mandates that all the commercial and residential real estate projects larger than 500 sq m, or eight apartments should be registered with their State’s Real Estate Regulatory Authority (RERA) before being launched.
• Ongoing projects without Completion Certificates (CC), as on the date of commencement of the Act, will have to file for registration within three months. The authority will have to either accept or reject the application within 30 days. Post acceptance of the registration request, the promoters will be required to present all the relevant details about the project on RERA’s official website.
• The failure to register a project would attract a penalty of 10 percent of the total project cost or imprisonment of up to three years.
• Real estate agents, facilitating the sale or purchase of realty projects, too, will have to register themselves with the authority.

What makes a project RERA-compliant?

• A Project should have received all requisite approvals before being advertised or sold.
• Information pertinent to sanctions, completion timeline and master plant should be disclosed.
• A separate escrow account for each project should be maintained with 70 percent of funds as advance deposits.
• Each unit should be said as per the carpet area instead of built-up area.

What are the mandates pertaining to structural defects in the project?

The promoter will have to rectify any structural defects, caused by poor workmanship, quality or provision of services, brought into notice within five years from the date of possession. The rectification would not attract any additional charges from allottees and will have to be carried out within a span of 30 days from the date of filing of the complaint. Failure to do so will entitle the allottees to seek relevant compensation as mentioned in the Act.

Will the allottee be penalised in case of delayed payments?

In case of a delay in payment from the allottee, the Act enforces similar stringent action. The allottee will be liable to pay a similar monthly interest as compensation to the promoter if they default in making timely instalments. Continued violations post-issuance of a notice give the promoter a right to terminate the allotment of property and refund the amount collected after deducting booking amount and interest.

What are the mandates pertaining to structural defects in the project?

The promoter will have to rectify any structural defects, caused by poor workmanship, quality or provision of services, brought into notice within five years from the date of possession. The rectification would not attract any additional charges from allottees and will have to be carried out within a span of 30 days from the date of filing of the complaint. Failure to do so will entitle the allottees to seek relevant compensation as mentioned in the Act.