real estate regulation act Archives - IND Real Estate Blog

The RERA Act, started under the Real Estate (Regulation and Development) Act of 2016. On March 10, 2016, India’s Parliament approved this bill in the Upper House (Rajya Sabha), and the Act came into action on May 1, 2016; nevertheless, 52 of its 92 sections were activated at that time. Rest, all of its remaining provisions were enforced starting May 1, 2017. The primary objective of the RERA Act was to establish the Real Estate Regulatory Authority, which is tasked with regulating and promoting the real estate sector. It also ensures that the sale of plots, houses, or apartments happens in a clear and fair way. Further, the Act was also introduced to protect real estate buyers and to establish a system to resolve disputes. Importance of the RERA Act As India takes a stronger role in the global market, industries and businesses have grown. This growth has led to a sharp increase in real estate prices. In order to address the increasing property rates and safeguard home buyers, the government enacted the Real Estate (Regulation and Development) Act, commonly referred to as the RERA Act, in 2016. This law monitors and oversees the real estate sector in all states. The RERA Act operates in every state to regulate the property market and ensure disputes get resolved without any delays. According to the RERA Act, every residential or industrial real estate project involving land over 500 square meters must now register with the Real Estate Regulatory Authority before starting any project. This registration helps ensure clearer transparency during project execution. Section 84 of the RERA Act mentions that State Governments must create rules to implement the Act’s provisions within six months of its enforcement. Key Points to Consider Under RERA Security: The RERA Act requires that at least 70% of the money from buyers and investors goes into a separate account. This fund is reserved for construction and land expenses, which builders can access. Developers are also not allowed to collect more than 10% of the property price as an advance before signing the sale agreement. Transparency: Builders need to provide the original documents for every project they work on. They must also get the buyer’s consent before making any changes to the project plans. Fairness: RERA now requires developers to sell properties by calculating the carpet area instead of the super built-up area. If a project faces delays, buyers can claim a full refund of the money they have invested. Quality: Builders have a responsibility to fix any problems reported by buyers within five years of the purchase date. They must address and resolve these complaints within thirty days of receiving them. Authorization: Without registering with the regulator, a builder cannot advertise, sell, construct, invest in, or book any plot. Once registered, every advertisement for investment must include a unique project-specific registration number assigned by RERA. Advantages of RERA Standard Method for Carpet Area Calculation: Earlier, builders weren’t required to follow any specific method to calculate the cost of a project. RERA Act introduced a fixed formula to calculate carpet area. This ensures that developers cannot exaggerate carpet areas to charge higher prices. Lowering The Risk of a Builder Going Bankrupt: Many developers work on several projects all at once. In the past, they could shift money collected from one project to another. Under RERA, this isn’t allowed anymore. Developers must keep 70% of the money collected in a specific bank account. They can use this money if an engineer, a chartered accountant, and an architect certify it. Advance Payments: Builders are not allowed to take over 10% of the project’s cost as advance or application fees from buyers. This rule helps buyers avoid rushing to arrange funds or pay a huge amount upfront. Rights Of the Buyer When There Are Defects: If buyers notice a structural issue or a quality problem within 5 years of getting possession, the builder must fix it free of charge. Repairs must happen within 30 days after being notified. Interest In Case of Delays: Before RERA, a promoter delaying possession paid much lower interest to the buyer compared to what the buyer had to pay for late payments. With RERA, this rule ensures both the buyer and the promoter owe the same amount of interest for such delays. Buyers’ Rights in Case of False Promise: Buyers can ask for a full refund when builders fail to deliver what they had promised. If the actual delivery does not match the promises, builders might also need to pay interest on the refunded amount. Right to Claim Compensation: When buyers find title defects in their possession, they can demand compensation from the promoter. There is no cap on the amount of compensation they can seek in such cases. Right to Information: Buyers have the right to receive all project-related details. They are entitled to know about things like layout plans, ongoing work, and project completion progress. Grievance Redressal: Buyers, promoters, or agents can lodge complaints about the project with RERA. However, if they find RERA's decision unsatisfactory, they have the opportunity to escalate the complaint to the Appellate Tribunal. Who Should Apply to Register with RERA? Builder or Developer: Builders or developers working on projects with land over 500 square meters or creating more than 8 apartments need to register with RERA. They also must share updates about the project's construction and current status with the authority. Real Estate Agent: The RERA Act says all real estate agents must register with RERA first. It gives each agent a unique registration number that acts as legal proof in property transactions. This number ensures that the agent follows RERA rules. The Process of RERA Registration Get Prepared for Registration To register for RERA, whether you're a builder or an agent, you need to gather all the essential details about your work. You should include project plans and proof of approval from the relevant authorities in this process. Required Documents The list of documents you need depends on whether you are a real estate agent or a builder, or a developer. Below is a list of all the required documents for RERA registration. Documents Required for Agent Aadhar Card PAN Card Office Proof - Rent Agreement ITR - Last 3 years Passport-size Photograph Documents for Real Estate Builders PAN Card of Builder/ Promoter Details of Land Proof of the Land Possession Details of Architects/ Engineers Projects Schedule Project Cost and Financing Past 3 years' project descriptions Time Needed to Get RERA Registration The RERA certificate gets issued in about 30 days, as mentioned under the RERA Act. However, sometimes it may take less time or even get delayed. Delays often happen due to reasons like submitting incorrect documents. It's a good idea to get help from experts to manage the paperwork and give precise legal advice based on RERA laws. All Summed Up The RERA Act creates a solid legal system to regulate real estate and brings important RERA benefits to homebuyers. It builds trust in the real estate market by making it more transparent and fairer while holding all parties accountable. It protects homebuyers, demands detailed project information, timely delivery assurances, and adherence to strict rules through a clear developer registration process. By encouraging fair practices and a reliable structure, it boosts builders' reputation, helps them secure funding, and widens their access to loans. Following RERA rules helps everyone involved avoid disputes and keeps the real estate market reliable and credible.

real estate regulation act Archives - IND Real Estate Blog | Homes

All About the RERA Act 2016: Key Benefits & Registration Steps

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