The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016.
The main objectives of RERA are:
To protect interest of consumer in real estate sector
To establish a process for speedy dispute redressal
To ensure sale of plot, building or apartment, or real estate project, in an efficient and transparent manner
To establish a tribunal to hear appeals from decisions, directions or orders of Real Estate Regulatory Authority and adjudicating officer
The RERA Act was assented by the president of India on 25th March, 2016 and was notified in Gazette of India for public information on 26th March, 2016. However, commencement of specific sections of the ACT will be done in step by step manner. The entire process will take around 12 to 18 months.
The Act was notified in e-Gazette on 26th March 2016. The Act is applicable to whole of India except Jammu & Kashmir
A number of key terms have been defined. Some of them are:
Advertisement, Agreement for Sale, Allottee, Apartment, Architect, Building, Carpet Area, Commencement Certificate, Common Areas, Completion Certificate, Development, Development Works, Engineer, Estimated Cost of Real Estate Project, External Development Works, Family, Garage, Immovable Property, Interest, Internal Development Works, Local Authority, Occupancy Certificate, Person, planning area, Project, Promoter, Prospectus, Real Estate Agent, Real Estate Project, Sanctioned Plan
Yes, no developer or builder shall advertise, market, book, sell or offer for sale, or invite persons to purchase any plot, apartment or building, in any real estate project or part of it, in any planning area, without registering Real Estate Project (REP) with Real Estate Regulatory Authority (RERA).
There are three situations:
Where area of land proposed to be developed does not exceed 500 sq m or number of apartments proposed to be developed does not exceed 8 inclusive of all phases
Where promoter has received completion certificate for Real Estate Project prior to commencement of Act
For purpose of renovation or repair or re-development which does not involve marketing, advertising, selling or new allotment of any apartment, plot or building, under real estate project
It is stated that RERA shall operationalise a web based online system for submitting applications for registration of projects within a period of 1 year from date of its establishment. RERA is yet to be established. Until a web based online system is established, all applications shall be made in paper format.
Details of the company
Detail of projects launched by developer in the past five years whether already completed or being developed, including current status of said projects, any delay in its completion, details of cases pending, details of type of land and payments pending
Authenticated copy of approvals and commencement certificate from competent authority for real estate project mentioned in application
Sanctioned plan, layout plan and specifications of proposed project or phase, and whole project as sanctioned by competent authority
Plan of development works to be executed in proposed project and proposed facilities to be provided including fire fighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy
Location details of project, with clear demarcation of land dedicated for project along with its boundaries including latitude and longitude of end points of project
Pro-forma of allotment letter, agreement for sale, and conveyance deed proposed to be signed with allottees
Number, type and carpet area of apartments for sale in project along with area of exclusive balcony or verandah areas and exclusive open terrace areas apartment with apartment
Names and addresses of his real estate agents for proposed project
Names and addresses of contractors, architect, structural engineer and other persons concerned with development of proposed project
Declaration, supported by an affidavit, which shall be signed by promoter or any person authorised by promoter
Declaration to be provided by the promoter in his affidavit while making an application to RERA.
The developer shall deposit 70% of amounts realised for real estate project from allottees, in a separate account to be maintained in a scheduled bank to cover cost of construction and land cost and shall be used only for that purpose.
The developer shall withdraw amounts from separate account, to cover cost of project, in proportion to percentage of completion of project
Registration by RERA shall be granted within 30 days from date of application. RERA shall also provide registration number, Login ID and password to applicant for accessing website of Authority and to create his/her web page and to fill details of proposed project.
RERA shall communicate in writing the reasons for rejection of application within 30 days from date of application.
If RERA fails to grant registration or reject application, project shall be deemed to have been registered. RERA shall also within 7 days (from expiry of 30 days) provide registration number, Login ID and password to applicant for accessing website of Authority and to create his web page and to fill details of proposed project.
Registration shall be valid for a period declared by promoter for completion of project or phase.
Force majeure means a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project.
Yes, as per section 3(1) of the Act, ongoing / existing projects, which have not received completion certificate are covered under the Act. The said section is reproduced below:
“……Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act……” (RERA ACT & LAW)
Yes, RERA can revoke registration on receipt of a complaint or on recommendation of competent authority.
The following four acts are lead to revocation of registration by RERA:
Promoter makes default in doing anything under Act / Rules / Regulations
Promoter violates any terms or conditions of approval given by competent authority
Promoter is involved in any kind of unfair practice or irregularities
Promoter indulges in any fraudulent practices
RERA shall debar promoter from accessing its website in relation to that project and specify his name in list of defaulters and display his photograph on its website and also inform other Real Estate Regulatory Authority in other States and Union territories about such revocation or registration
RERA shall facilitate remaining development works to be carried out in accordance with provisions of section 8
RERA shall direct the bank holding the project back account, to freeze account, and take necessary actions, including consequent de-freezing of said account, towards facilitating remaining development works in accordance with provisions of section 8
RERA may, to protect interest of allottees or in public interest, issue such directions as it may deem necessary
RERA may, instead of revoking registration, permit registration to remain in force subject to such further terms and conditions as it thinks fit to impose in interest of allottees and any such terms and conditions so imposed shall be binding upon promoter.
Upon lapse of or on revocation of registration, RERA may consult Appropriate Government to carry out remaining development works by competent authority or by association of allottees or in any other manner, as may be determined by RERA
In case of revocation of registration of a project, association of allottees shall have first right of refusal for carrying out of remaining development works
Yes, RERA may in reasonable circumstances, without default on part of promoter, based on facts of each case, extend registration granted to a project for such time as it considers necessary, which shall, in aggregate, not exceed a period of 1 year.
No, as RERA is not a Constitutional Amendment Act affecting the States, no consent / ratification, by whatever name called is required. States are bound to implement the Act according to the timelines provided therein.
Registration granted may be extended by RERA on an application made by promoter due to force majeure. Also, RERA may in reasonable circumstances, without default on part of promoter, based on facts of each case, extend registration granted to a project for such time as it considers necessary, which shall, in aggregate, not exceed a period of 1 year.
Yes, the promoter shall get his accounts audited within 6 months after end of every financial year by a chartered accountant in practice, and shall produce a statement of accounts duly certified and signed by such chartered accountant and it shall be verified during audit that amounts collected for a particular project have been utilised for project and withdrawal has been in compliance with proportion to percentage of completion of project.
Yes, the promoter shall make an application to RERA within 3 months from date of commencement of Act.