(RERA is an Act to regulate Indian Real Estate)
RERA stands for Real Estate (Regulation & Development) Act, 2016. The Indian Real Estate industry was highly unregulated before RERA. Here are some of the issues RERA aims to solve!
I. Delayed Possession
2. Diversion of Funds
3. Biased-Sided Agreements
4. Unequal Penalties in Agreements
5. Sales on Inflated and Misleading Super Built-Up Area
6. Misleading Ads in Real Estate Project Brochures
7. No Warranty on Workmanship Defects
8. Sales Before The Approvals
Section 3(1)
No builder is allowed to market or sell his project without the RERA registration. The penalty for breaking this clause can be 10% of the total project cost or imprisonment for up to 3 years.
Section 3(2)
Under construction projects with a land area equal to or less than 500 sqm or where the total number of flats is equal to or less than 8; need not be registered with RERA!
RTMI buildings with occupancy certificates, need not register with RERA. Redevelopment of buildings which doesn't involve marketing or sales to a new person doesn't need to be registered with RERA.
Section 4
Involves the RERA application process for a project. The builder must submit all the relevant details of his company, his past track record, copies of approvals, sanctioned plans and other details of the project along with the declaration.
Section 5
Involves the grant of RERA registration for the project within 30 days. Upon the grant, the builder receives a registration number and a login id to update all the project details on the RERA website.
Section 6
Involves the extension of RERA registration or the project's possession timelines due to the 'Force Majeure clause or unforeseeable circumstances such as war, riots, pandemics etc.
Section 7
Involves the cancellation of RERA registration of a project by the authorities due to violations.
Section9
Involves the RERA registration of brokers. Real estate brokers cannot sell or market RERA-registered projects without being RERA registered themselves.
Section 10
Talks about the duties of a real estate agent. Agents are not allowed to sell projects before the project receives its RERA registration number. An agent can be fined up to 5% of the flat cost upon violations.
Section 11
Talks about the duties of builders. They must update the construction status, and approval status of their project; and update the total number of flats & car parking sold, online every 3 months. False advertising is not allowed in brochures. Builders must form society and convey the title to the society (CHS) after the possession.
Section 12
False advertising is not allowed in the brochures. Builders must deliver what is shown in the brochures.
Section 13
Builders can't accept more than 10% of the total payment without registering a written agreement to Sale document with the buyer.
Section 14
The builder must adhere to the sanctioned building plans and to make any changes he will need approval from 2/3rd of the existing buyers or allottees. A warranty of 5 years will be provided to buyers against any structural or workmanship defects!
Section 17
The builder must execute a registered conveyance deed in favour of the buyers, along with the undivided title of the common areas and transfer the title to the association or society of allottees.
Section 18
If the builder doesn't give possession on time then he will either repay the entire amount to the buyer with interest (in case the buyer wants to exit the project); OR pay the buyer interest penalty on the buyer's money invested with him till possession (in case the buyer wishes to continue with the project).
Section 19
Talks about the duties of a buyer. The buyer is allowed to obtain any necessary information or documentation regarding the real estate project. The buyer must not default on the payments and will be liable to an interest penalty by the builder. Buyers must take possession of the unit within 2 months of receiving the Occupancy Certificate!
Sections 43 & 44
Any party not happy with the decision of the RERA authority can appeal to the Real Estate Appellate Tribunal within 60 days.
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