What is RERA and what is the requirement for registration in RERA?
The Real Estate (Regulation and Development) Act, 2016 provides for establishing regulatory authorities at the state level to register residential real estate projects and seeks to regulate contracts between buyers and sellers in the real estate sector to ensure sale of plot, apartment or building, etc. in an efficient and transparent manner. It also proposes to ensure greater accountability towards consumers, and significantly reduce frauds and delays as also the current high transaction costs. By imposing certain responsibilities on consumers and promoters, it attempts to balance the interest of both. It seeks to establish ease of information between the promoter and purchaser, high level of transparency of contractual conditions, set minimum standards of accountability and a fast track dispute resolution mechanism.
The real estate sector plays a vital role in fulfilling the need and demand for housing and infrastructure development in the India. While this sector has grown rapidly in recent years, it has been largely unregulated, though in India there is state apartment act, with the absence of professionalism and standardization. The lack of adequate consumer protection mechanism resulted in exploitation and profiteering by unscrupulous builders. Thus, the Real Estate Act will protect the interest of buyers and also give much-needed impetus to the sector.
What is the main Objective of RERA Act?
Establishing a fast-track dispute resolution mechanism
Ensuring accountability towards buyers and protect their interest
Infusing transparency, ensure fair-play and reduce frauds & delays
Ensuring the sale of real estate project, in an efficient and transparent manner
Introducing professionalism and pan India standardization
Establishing symmetry of information between the developer and buyer
Imposing certain responsibilities on both developer and buyers
Promoting good governance in the sector and create investor confidence
RERA is application on promoters, project and real-sate agents subject to following conditions
The applicability of the Act has been extended to commercial and residential real estate (including plotted development).
All the residential and the commercial projects exceeding 500 square meters or more than 8 units/apartments have to mandatorily get register with the Real Estate Regulatory Authority (RERA); thereby ensuring that even the small projects by local promoters are brought under the ambit of the Act.
All the ongoing projects that have not received Completion Certificates have also been brought under the purview of the Act and such projects will need to be registered with the Regulator within 3 months.
Prior registration is required to be taken from RERA under respective state laws by the Real estate agents who facilitate selling or purchase of properties. Registration certificate is valid of whole state / UT.
Application for registration must be approved or rejected within a period of 30 days from the date of application by the RERA
On successful registration and approval from the authority, the promoter of the project will be provided with a unique registration number, a login id, and password for the applicants to update the necessary details about the company and project
For failure to register, a penalty of up to 10 percent of the project cost or three years’ imprisonment may be imposed.
What are the objectives of RERA?
The prominent object of the RERA is to generate faith and confidence of the stake holders whether promoter or buyer in Real Estate Sector. Some of the objectives of RERA are –
1. To establishing a Real Estate Regulatory Authority (RERA) for the sole purpose of regulation in real estate.
2. To provide transparency and grievance system in Real Estate Sector
3. To protect of right of buyers
4. To establish the authenticity of promoters, real estate project and real estate agents
5. To curb on unnecessary delay in approval of project, delivery of project etc
6. To Set up appellate System for grievance redressal system