The Real Estate (Regulation and Development) Act, 2016 is an act of the Parliament of India which was enacted/passed with the primary objective of protecting home-buyers and boost investments in the real estate industry in India. Real Estate Regulatory Authority (RERA) was established in each state for regulation of the real estate projects and acted as an adjudicating body for speedy dispute resolution.

The RERA Act came into force on 01^st May 2016. Under this act, the State Governments and Central are liable to notify the rules. Each state has its own rules under this Act. However, more or less, all states have similar regulations under this Act.

Applicability - Who shall register

Projects that have been approved and given building permission on or after 01-01-2017 by the Competent Authorities which are UDAs/DTCP/Municipal Corporations/Municipalities/Nagar Panchayats/TSIIC as the case may become under the purview of RERA Act & Rules.

But the following are not required to register under RERA

1. The land that needs to be developed is less than 500 square meters.
2. The apartments that need to developed does not exceed eight inclusive of all phases.
3. Any Renovation or repair work or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project.

Documents required for registration

1. Name, contact details, photograph, contact details and address of the promoter in case of an individual.
2. Name, contact details, photograph, and address of the chairman, partners, directors in the case of business entities.
3. An authenticated copy of the PAN Card of the promoter
4. Balance sheet along with the profit and loss account for the last three assessment years.
5. Annual report, Director's report and Auditors report of the promoter for the last three financial years.
6. The number of open and closed parking areas available in the real estate project.
7. Copy of the legal title deed indicating the title of promoter to the land/plot on which the project to be developed has been proposed.
8. Details of the consent of the owner of the loan along with documents such as collaboration agreement, development agreement, joint development agreement, etc. in case the promoter is not the owner of the land on which the project to be developed is proposed.
9. Application for registration with the Regulatory Authority.
10. Lastly, the registration fee in the form of demand draft or banker's cheque or online.

RERA registration fee

RERA registration process

Each State Government has its own website under which the project developers can register the project. The registration is required for each project. All the above-said documents shall be uploaded in the specific portals of the state governments and application fee shall also be paid online. Then the application needs to be verified and approved within 30 days.

Once the registration is successful, the Applicant will get RERA Registration Number with login and password details for future use.

The real estate agents shall also register under this Act. Agents who market or promote any project without registration are liable for fines, penalty and imprisonment under the Act.

Time taken

RERA certificate is issued in 30 days in most of the cases, but there may be delay due do many reasons.

Consequences of non-registration

If anyone fails to register under this RERA Act, then the following are the consequences: 

1. 10% of the Project Cost will be collected as a penalty, or
2. Three years of imprisonment may be imposed

Advantages to home buyers

• Transparency in financial transactions, since 70% of the project cost shall be received and spent from the Bank Accounts only. Means only 30% of cash transactions are allowed.

• The builder shall quote prices on the carpet area, not the super built-up area. Hence the buyers will get correct area prices.

• Buyers can file cases in RERA, RERA Appellate Tribunal or even in National Company Law Tribunal for any unwanted actions of the Builders.

• Buyers can get verified data in the RERA website of each state for the Projects under construction.

• Buyers can get genuine details about projects under development.

Advantages to builders & agents

• Good publicity for advertising the projects
• Builders can get funding by the investors as the projects are genuinely conducting the activities
• Avoiding penalties for non-registration of the Projects
• Builders and promoters of the project can improve the transparency of their business as the financial transactions are routed through the Bank accounts or digital modes.

Conclusion

The RERA act which came into force on 01^st May 2016 has yielded good and progressive results so far. As the registration process and fee payment are online, all the builders and promoters finding the registration process easy and user friendly. The home buyers are protected from their hard-earned money, and this Act gives them more protection. However, there are some more amendments and advanced changes to be implemented in the days to come.

Also read: Decoding the AtmaNirbhar package for Indian developers & home buyers

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