With a motive to protect homebuyers as well as to boost investments in the real estate industry, the Real Estate (Regulation and Development) Act, 2016 came into force. Real Estate Regulatory Authority (RERA) was established in each state for regulation of the RERA for homebuyers in the real estate sector.
1st May 2016 the Real Estate (Regulation and Development)Act came into force with 92 sections out of which 59 are notified. Within a statutory period of six months, the Central and state governments are liable to notify the Rules under the Act.
What is the Objective of the Real Estate (Regulation and Development) Act, 2016?
The RERA Act seeks to protect the buyers and acts as an adjudicating body for speedy dispute redressal. The Central government has planned to set up an online platform for all the states and union territories for the real estate regulatory authority who are assigned to make laws stronger.
Where the land is over 500 square meters or eight apartments and in order to provide greater transparency in project-marketing and execution, RERA makes it mandatory for all commercial and residential real estate projects to register with the Real Estate Regulatory Authority (RERA).
The motive of the act are mentioned below-
- For promoting and regulating the real estate sector.
- Transparency and proper information about the projects and builders.
- Protecting the interest of the consumer.
- Provide recommendations on matters relating to the development & promotion of the real estate sector to appropriate Government
RERA Registration in India
Once the application of RERA registration is applied it must be either approved or rejected within a period of 30 days from the date of application submitted. The promoter of the project on successful registration will be provided with a registration number, a login id, and a password for the applicants to fill up important details on the website of the RERA.
In case of failure to register, a person holding the property will have to pay a penalty of up to 10% of the project cost or 3 years imprisonment may be imposed.
Further, the ongoing projects will have to seek registration within 3 months which have not received completion certificate on the date of commencement of the Act.
What are the documents required for RERA Registration?
Following documents are required from the Builder:
- PAN CARD.
- ITR and Balance sheet for the last 3 years.
- Proper clarification of the apartment by the builder i.e. carpet area, floor description.
- Land details, project details, and declaration by the builder of having a legal title of the land along with the proof.
- Details of the person involved and the ownership documents.
RERA Registration for home buyers
- Before the establishment of RERA Act 2016
Earlier before the establishment of the RERA Act, buyers were taken granted by most of the builders which results in delayed delivery across several cities. The buyers are still waiting for the possession who had booked after 2012-13. The sector was very unregulated and opaque with the customers and unable to provide complete information. The sector before the establishment was a source of black money over the past years.
- After the establishment of RERA Act 2016
On 1st May 2016, this bill was passed by the parliament which was the utmost significance to handle the pathetic situation of the real estate sector which requires redressal. RERA Act was passed for putting into place a regulatory authority and improving transparency for the buyers. A bill aims to establish a regulatory authority as a mechanism to enforce-
- Proper disclosure of information to the consumers,
- Fair practice and accountability in the real estate sector and
- To provide adjudication machinery for speedy dispute redressal.
- To protect the interest of the homebuyers.
All the respective states are mandated to constitute their real estate regulatory authorities to provide proper protection for the consumers/homebuyers. Additionally, RERA of all states can exchange their views and suggestions. It also provides a platform for the consumers to register a complaint against the builders who are not providing proper information and showing unnecessary delays in the completion of the ongoing projects.
What are the features of the Real Estate Regulation Act 2016?
- As per the provision of the RERA Act 2016 the builders have to disclose every small detail of the project to the buyers, which is a delightful scenario for all the home buyers.
- The act protects the buyers by prohibiting the unaccounted money from being pumped into the sector. Now it is compulsory to deposit 70% of the money in bank accounts through cheques.
- It governs both the residential and commercial real estate transactions.
- It is mandatory for all the builders and developers to provide all the information and also cannot make any changes to the plan without the consent of the consumers if the property has been sold.
- To get all approvals from the governments before launching any project
- Discloser on the website set up by the RERA regulatory authority.
- Eliminating the possibility of misleading purchase and to impose penalty and imprisonment in case of violation of the law
- The developer will be required to pay an interest of 2% above SBI’s marginal cost of lending rate to the buyer in case of any delay in the completion of the project.
- The builder will be responsible for a period of 5 years in case of any defect in the building.
- Dispute with the buyer needs to be resolved within 120 days.
Real Estate Regulatory Authority is implied on buyers, builders, and agents. Every state has to set RERA for real estate developments. As the applicability of RERA act is on both residential and commercial properties which ultimately protects the interest and to bring relief to the buyers. The regulator provides a registration number to the real estate agents and they have to mention the registration number in every sale of the property.