What is RERA ACT?
RERA stands for Real Estate Regulatory Authority, which came into existence as per Real Estate (Regulation and Development) Act, 2016 which aims to bring transparency to the real estate industry and address the existing discrepancies and issues within it. The act was passed by the Indian Parliament in 2016 and came into effect in May 2017 to make the home buying process more transparent and address the concerns of home buyers, builders, brokers, and other real estate industry stakeholders. Since its inception, RERA has implemented many reforms, and more are on the anvil. That is why, as a home buyer or a builder, knowing RERA rules and guidelines will help you navigate the real estate landscape with ease.
The Real Estate (Regulation and Development) Act, 2016 (RERA Act) is a comprehensive legislation in India that aims to regulate the real estate sector, protect the interests of homebuyers, and promote transparency and accountability in the industry. Along with the Act, there are specific rules and regulations framed by each state to implement and enforce RERA effectively. While the exact rules may vary slightly between states, here is an overview of the key provisions of the RERA Act and common features found in the rules:
Provisions under RERA Act
1. Registration of projects:
- Developers must register their real estate projects with the respective state's Real Estate Regulatory Authority (RERA) before advertising, marketing, or selling any units.
- Detailed information about the project, including land title, approvals, layout plans, schedule, and implementation status, must be provided at the time of registration.
2. Compulsory disclosure:
- Developers are required to disclose all relevant information about the project on the RERA website, such as project details, plans, specifications, carpet area, amenities, etc.
- Any changes or modifications to the project must be disclosed and communicated to buyers.
3. Escrow account:
- Developers must maintain a separate escrow account for each project, where a minimum of 70% of the funds received from buyers is to be deposited. These funds can only be utilized for the specific project's construction and development.
4. Carpet area:
- The sale of units is based on the carpet area, which is the net usable floor area within the walls of the unit, excluding the balcony, terrace, and common areas.
- Developers must clearly mention the carpet area in the sale agreements and advertisements.
5. Timely completion:
- RERA emphasizes timely completion of projects, and developers must adhere to the proposed timeline and deliver the project as per the commitments made to buyers.
- If there is any delay, developers are liable to pay penalties and compensation to buyers.
6. Real estate agents:
- Real estate agents and brokers must register with RERA and provide accurate information about themselves, the projects they are dealing with, and the commission they receive.
7. Buyer protection and grievance redressal:
- RERA provides a platform for buyers to file complaints and seek redressal for any issues or grievances they have with developers or agents.
- Each state establishes a Real Estate Appellate Tribunal to hear and resolve disputes between buyers and developers.
It is important to note that the rules and regulations may vary from state to state, so it is advisable to refer to the specific RERA rules of the concerned state for detailed provisions and requirements
Key benefits offered by RERA
RERA has brought about a positive change in every facet of the real estate sector. Here is how:
- RERA aims to reduce project delays and property fraud. To do so, authorities have made it mandatory for all builders/ developers to carry out RERA registration before they start a project.
- RERA is sub-divided into smaller regulatory bodies, each of which looks after the real estate development in a single state or union territory in India.
- RERA rules apply to both residential and commercial properties.
- The standardisation brought about by RERA aims to protect the interests of buyers and developers alike.
- The RERA Act has brought about more accountability and transparency within the real estate industry.
How will RERA impact real estate agents?
With RERA coming into effect, builders and developers have to be more transparent. Here are the ways in which RERA impacts real estate.
- The respective state RERA must register all proposed projects exceeding an area of 500 sq. mt. or more than 8 apartments.
- Builders must deposit 70% of the project money collected from home buyers in bank accounts, through cheques. This makes it impossible to engage in fraudulent transactions or money laundering. This requirement ensures proper documentation and accountability for every rupee spent and gained.
- There will be one model sale agreement between all builders and home buyers.
RERA Act in different states of India
The RERA Act has been implemented in more than 22 Ind working towards solving complaints and disputes in each state.ian states and 6 union territories in the past two years, actively.
For instance, MahaRERA or RERA Maharashtra, has received around 6,631 complaints (as of April 2019) and has resolved 64% disputes. Following suit are other states like West Bengal, Manipur, and Assam that are gearing up to launch their RERA websites.
List of states that have enforced RERA ACT
The Real Estate (Regulation and Development) Act, 2016 (RERA) had been enacted and enforced in the following states and union territories in India:
Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Goa, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Punjab, Rajasthan, Sikkim, Tamil Nadu, Telangana, Tripura, Uttar Pradesh, Uttarakhand, West Bengal, Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep, Puducherry. Here is the list of their official website:
|Rera Madhya Pradesh
|Rera Uttar Pradesh
|Rera Tamil Nadu
Please note that the status of RERA implementation and the list of states may change over time. It is advisable to check for the latest updates from the respective state authorities or the official website of the Ministry of Housing and Urban Affairs, Government of India, for the most recent information on RERA enforcement.
RERA registration fees
The registration fees for RERA (Real Estate Regulatory Authority) vary from state to state in India. Each state has its own set of rules and regulations, and the registration fees are determined accordingly. The fees are generally calculated based on the type of project, the number of units, and the area of the project.
In most states, the registration fees are charged based on the square footage or the number of apartments/ units in the project. It is typically a percentage of the project cost or a fixed amount, whichever is higher. The registration fees can range from a few thousand rupees to several lakhs, depending on the size and value of the project.
To know the specific registration fees applicable in your state, it is advisable to visit the official website of the respective state's RERA authority or consult with a qualified professional familiar with real estate regulations in that particular state.
Projects that come under RERA
Once all states and union territories comply with RERA, all real estate projects will come under its purview. In the interim, take a look at a few conditions that determine when a project falls under RERA and when it does not.
- Projects that do not have a completion certificate but were completed before the implementation of the RERA Act is a part of RERA.
- Projects that have undertaken construction for the purpose of renovation/ repair/ re-development, and are not re-allotting, marketing, advertising, selling, or allotting any apartments, plot, or building, will not come under the purview of RERA.
- Project that is under construction have to report each phase of construction as a standalone project through a fresh RERA registration.
As a home buyer it is important for you to select a RERA registered project, to make a safe investment and eliminate any possible losses. Additionally, apply for a cost-effective home loan to simplify and economise the home-buying process. For instance, you can apply for a home loan of up to Rs. 15 Crore* based on eligibility from Bajaj Finserv. Apart from getting access to a hefty sanction on a competitive interest rate, you can also enjoy a flexible tenure and other benefits. Moreover, you can apply for the loan under PMAY and get CLSS benefits of up to Rs. 2.67 lakh. Best of all, easy home loan eligibility criteria and minimal documentation requirements make this loan very easy to apply for. To get started, simply check your pre-approved offer and choose a customised loan deal that fits your needs.
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