What Is Rera Act And Registration Process
Registration & Licenses

What Is Rera Act And Registration Process

In recent years, the real estate sector in India has witnessed significant regulatory reforms aimed at protecting the interests of homebuyers and ensuring transparency and accountability in the industry. One of the most crucial legislations introduced to achieve these objectives is the Real Estate (Regulation and Development) Act, commonly known as RERA. In this blog, we will delve into what the RERA Act entails and provide a comprehensive guide to its registration process.

What is RERA?

The Real Estate (Regulation and Development) Act, 2016, came into effect on May 1, 2017. Its primary aim is to regulate the real estate sector and promote transparency, accountability, and efficiency in all real estate transactions. RERA applies to both residential and commercial real estate projects, ensuring fair practices and timely delivery of properties to buyers.

Key Features of RERA:

  1. Establishment of Regulatory Authorities: Each state and union territory in India has its own Real Estate Regulatory Authority (RERA), responsible for implementing and enforcing the provisions of the Act within its jurisdiction.

  2. Mandatory Registration of Projects and Agents: Developers are required to register their real estate projects with the respective state RERA authorities before advertising or selling any property. Similarly, real estate agents must also register themselves with RERA to facilitate property transactions.

  3. Transparency and Disclosure: RERA mandates developers to provide accurate and transparent information about their projects, including project details, layout plans, approvals, timeline for completion, and other relevant information. This ensures that buyers make informed decisions.

  4. Deposit of Funds in Escrow Account: Developers are required to deposit a certain percentage of the project funds in a separate escrow account, which can only be utilized for construction purposes. This prevents diversion of funds and ensures timely completion of projects.

  5. Penalties for Non-Compliance: RERA imposes strict penalties on developers for any violation of its provisions, including delayed possession, misleading advertisements, or failure to adhere to quality standards. These penalties serve as a deterrent against malpractices in the real estate sector.

Registration Process under RERA:

For Developers:

  1. Preparation of Documents: Developers need to gather all necessary documents related to the project, including land title deeds, approvals from local authorities, layout plans, financial statements, and details of project architects and contractors.

  2. Online Application: Developers must visit the official website of the respective state RERA authority and fill out the online application form for project registration. They need to provide accurate information and upload all required documents as per the guidelines.

  3. Payment of Fees: A registration fee based on the size and nature of the project must be paid along with the application. Once the fee is paid, a unique registration number will be generated, which is essential for all project-related communications.

  4. Verification and Approval: The RERA authority scrutinizes the application and verifies the submitted documents for authenticity and compliance with RERA guidelines. If everything is in order, the authority grants approval and assigns a registration certificate to the developer.

  5. Commencement of Sales: After obtaining RERA registration, developers can commence advertising and selling units in the project. However, they must adhere to the rules and regulations specified by RERA and ensure timely completion and delivery of the project.

For Real Estate Agents:

  1. Documentation: Real estate agents need to gather relevant documents, including identity proof, address proof, proof of educational qualification, and details of any prior experience in the real estate sector.

  2. Online Registration: Similar to developers, real estate agents must visit the official RERA website and fill out the online registration form for agents. They need to provide accurate information and upload the necessary documents as per the prescribed format.

  3. Payment of Fees: Agents are required to pay the registration fee along with the application, as specified by the respective state RERA authority. Upon successful payment, a unique registration number is generated for the agent.

  4. Verification and Approval: The RERA authority verifies the submitted application and documents to ensure compliance with the Act's provisions. If everything is in order, the authority approves the registration and issues a registration certificate to the agent.

  5. Code of Conduct: Registered real estate agents must adhere to the code of conduct prescribed by RERA, which includes maintaining transparency in dealings, providing accurate information to clients, and acting in their best interests.

Conclusion:

The Real Estate (Regulation and Development) Act, commonly known as RERA, is a landmark legislation aimed at bringing transparency, accountability, and efficiency to the real estate sector in India. By mandating the registration of projects and agents, providing for transparency and disclosure, and imposing penalties for non-compliance, RERA seeks to protect the interests of homebuyers and promote fair practices in the industry. Understanding the registration process under RERA is essential for developers and real estate agents to ensure compliance with the law and contribute to the growth and development of the real estate sector in India.

 

Frequently Asked Questions (FAQs) about RERA and its Registration Process:

1. What is RERA, and why was it introduced?

The Real Estate (Regulation and Development) Act, commonly known as RERA, was introduced to regulate the real estate sector in India. Its primary objective is to protect the interests of homebuyers, ensure transparency and accountability in real estate transactions, and promote orderly growth of the industry.

2. Who is required to register under RERA?

Under RERA, both developers and real estate agents are required to register themselves and their projects with the respective state Real Estate Regulatory Authority (RERA).

3. What documents are required for project registration under RERA?

Developers need to submit various documents, including land title deeds, project approvals, layout plans, financial statements, and details of project architects and contractors, among others.

4. How does the registration process for developers work under RERA?

Developers must fill out the online application form on the official RERA website, provide accurate information, upload necessary documents, pay the registration fee, and await verification and approval from the RERA authority.

5. What are the penalties for non-compliance with RERA regulations?

RERA imposes strict penalties on developers for violations such as delayed possession, misleading advertisements, or failure to adhere to quality standards. These penalties serve as a deterrent against malpractices in the real estate sector.

6. What are the key features of RERA that benefit homebuyers?

RERA ensures transparency and disclosure by mandating developers to provide accurate information about their projects, deposit funds in escrow accounts, and adhere to timelines for project completion.

7. How does RERA protect homebuyers' interests?

RERA protects homebuyers' interests by providing a regulatory framework that promotes fair practices, timely delivery of properties, and accountability from developers and real estate agents.

8. What is the role of Real Estate Regulatory Authorities (RERA) in the registration process?

RERA authorities are responsible for implementing and enforcing the provisions of the Act within their respective jurisdictions. They verify project and agent registrations, ensure compliance with RERA guidelines, and handle disputes between stakeholders.

9. What is the code of conduct for registered real estate agents under RERA?

Registered real estate agents must adhere to the code of conduct prescribed by RERA, which includes maintaining transparency in dealings, providing accurate information to clients, and acting in their best interests.

10. How does RERA contribute to the growth and development of the real estate sector in India?

RERA promotes a conducive environment for real estate transactions by instilling confidence among homebuyers, encouraging investment in the sector, and fostering sustainable growth through transparent and accountable practices.

Rera Act Real Estate Jargons
Property

Rera Act Real Estate Jargons

Navigating the world of real estate can often feel like deciphering a complex puzzle, especially when confronted with unfamiliar terms and regulations. One such regulation that has significant implications for real estate transactions is the Real Estate (Regulation and Development) Act, commonly known as RERA. In this guide, we'll demystify the jargon associated with the RERA Act, breaking down its key provisions and implications for buyers, sellers, and developers.

Understanding RERA: Before diving into the jargon, let's grasp the basics of the RERA Act:

  1. What is RERA?

    • The Real Estate (Regulation and Development) Act, 2016, aims to regulate the real estate sector and protect the interests of homebuyers. It establishes regulatory authorities in each state and union territory to oversee real estate projects and enforce compliance with the law.
  2. Objectives of RERA:

    • Promoting transparency and accountability in the real estate sector
    • Ensuring timely completion of projects and delivery of properties to buyers
    • Preventing fraud, misrepresentation, and unfair practices by developers

Now, let's delve into the jargon associated with RERA:

Heading 1: Carpet Area

  • Definition: Carpet area refers to the actual usable area within the walls of a residential unit, excluding the area covered by the walls.
  • Importance: RERA mandates that developers disclose the carpet area of apartments to buyers, ensuring transparency in property transactions.

Heading 2: Completion Certificate

  • Definition: A completion certificate is issued by the regulatory authority once a real estate project has been completed as per approved plans and complies with all applicable laws and regulations.

  • Importance: Obtaining a completion certificate is mandatory for developers before they can offer possession of properties to buyers under RERA.

Heading 3: Occupancy Certificate

  • Definition: An occupancy certificate is issued by the local authorities, confirming that a building is suitable for occupation and complies with all building codes and regulations.
  • Importance: Buyers should ensure that developers possess occupancy certificates before taking possession of properties to avoid legal complications.

Heading 4: Real Estate Agent

  • Definition: A real estate agent is an individual or entity engaged in the business of facilitating the sale, purchase, or leasing of real estate properties.
  • Importance: RERA mandates that real estate agents register with the regulatory authority, maintain transparency in transactions, and adhere to the code of conduct prescribed under the Act.

Heading 5: Project Registration

  • Definition: Project registration involves developers registering their real estate projects with the regulatory authority before commencing construction or advertising for sale.
  • Importance: RERA ensures that only registered projects are marketed and sold to buyers, providing them with necessary safeguards and recourse in case of disputes.

Heading 6: Escrow Account

  • Definition: An escrow account is a dedicated bank account established by developers to deposit funds collected from buyers for a specific real estate project.
  • Importance: RERA mandates that developers deposit a specified percentage of project funds into an escrow account to prevent diversion of funds and ensure project completion.

Heading 7: Force Majeure

  • Definition: Force majeure refers to unforeseen circumstances or events beyond the control of parties involved in a contract that may affect their ability to fulfill contractual obligations.
  • Importance: RERA allows for the extension of project timelines under force majeure conditions, providing relief to developers facing delays due to external factors such as natural disasters or government actions.

Heading 8: Defect Liability Period

  • Definition: The defect liability period is the duration during which developers are liable to rectify any defects or deficiencies in construction or workmanship identified by buyers after taking possession of properties.

  • Importance: RERA specifies the defect liability period as a minimum of five years from the date of possession, ensuring that buyers receive quality construction and timely resolution of issues.

Conclusion:

Navigating the intricacies of real estate jargon, especially in the context of the RERA Act, can be daunting for buyers, sellers, and developers alike. However, understanding key terms and provisions under RERA is essential for making informed decisions and safeguarding the interests of all stakeholders involved in real estate transactions. By demystifying the jargon associated with RERA, this guide aims to empower individuals with the knowledge and clarity needed to navigate the real estate landscape with confidence and transparency.

 

 

 

  1. What is the RERA Act, and why is it important in real estate transactions?

    • The RERA Act, or the Real Estate (Regulation and Development) Act, is a regulatory framework aimed at promoting transparency, accountability, and consumer protection in the real estate sector. It is important as it ensures timely completion of projects, protects buyers' interests, and regulates real estate transactions.
  2. What is the significance of carpet area in real estate under the RERA Act?

    • Carpet area refers to the actual usable area within the walls of a residential unit, excluding the area covered by the walls. Under the RERA Act, developers are mandated to disclose the carpet area to buyers, ensuring transparency in property transactions.
  3. What are completion and occupancy certificates, and why are they important?

    • Completion certificate: Issued by the regulatory authority, it confirms that a real estate project has been completed as per approved plans and complies with all regulations. An occupancy certificate, issued by local authorities, certifies that a building is suitable for occupation. These certificates are crucial as they signify compliance with legal requirements and quality standards.
  4. Who qualifies as a real estate agent under the RERA Act, and what are their obligations?

    • A real estate agent is an individual or entity engaged in facilitating real estate transactions. Under the RERA Act, real estate agents are required to register with the regulatory authority, maintain transparency in transactions, and adhere to a prescribed code of conduct.
  5. What is project registration, and why is it necessary under the RERA Act?

    • Project registration involves developers registering their real estate projects with the regulatory authority before commencing construction or advertising for sale. This ensures that only registered projects are marketed and sold, providing buyers with necessary safeguards and recourse in case of disputes.
  6. What is an escrow account, and how does it benefit buyers and developers?

    • An escrow account is a dedicated bank account established by developers to deposit funds collected from buyers for a specific real estate project. It ensures transparency and prevents diversion of funds, thereby safeguarding buyers' investments and promoting project completion.
  7. Under what circumstances can developers seek an extension of project timelines under the RERA Act?

    • Developers can seek an extension of project timelines under force majeure conditions, which refer to unforeseen circumstances beyond their control, such as natural disasters or government actions. This provision allows for flexibility in project execution while ensuring compliance with regulatory requirements.
  8. What is the defect liability period, and why is it important for buyers?

    • The defect liability period is the duration during which developers are liable to rectify any defects or deficiencies in construction or workmanship identified by buyers after taking possession of properties. It ensures that buyers receive quality construction and timely resolution of issues.
  9. What are the consequences of non-compliance with the RERA Act for developers and real estate agents?

    • Non-compliance with the RERA Act can result in penalties, fines, and even imprisonment for developers and real estate agents. It can also lead to project delays, legal disputes, and damage to reputation, affecting stakeholders' credibility and business prospects.
  10. How can buyers and sellers educate themselves about real estate jargon and the RERA Act?

    • Buyers and sellers can educate themselves by accessing resources provided by regulatory authorities, consulting legal professionals specializing in real estate law, attending workshops or seminars, and conducting thorough research on reputable platforms. Additionally, seeking guidance from experienced real estate agents or developers can help clarify any doubts or concerns regarding real estate transactions and the RERA Act.

 

 

 

 

 

 
RERA Registration Process
Property

RERA Registration Process

The Real Estate (Regulation and Development) Act (hereafter referred to as “RERA”) came into force on 1 May 2016. The main idea behind this law was the regulation and promotion of the real estate sector. Now development projects in real estate need to register themselves under RERA. RERA provides credibility to real estate projects and protects customers against delays in handing over the projects. 

How to Register Projects under RERA?

The process of Application for Registration of Real Estate projects differs from state to state. The detailed procedure for each state is available on each state’s RERA website. The promoters and real estate agents have to apply for registration on the website, which is relevant for their state. For registration, you need to submit certain documents along with the application. These, too, differ from state to state. However, certain documents are common amongst most of the states. These are:

  • Promoter’s PAN Card;

  • Legal title deeds of the land. (See Section 4(2)(l)A);

  • Encumbrance Certificate (See Section 4(2)(l)B);

  • Commencement Certificate (See Section 4(2)(c));

  • The Sanction Plan, Layout Plan, location details of the project (See Section 4(2)(d));

  • The plan of development works; and

  • Details of previous project experience of the promoter, if any (See Section 4(2)(b)).

Some of these documents across different states (as mentioned on their websites) are as follows:

  • Name, type, and registered address of the enterprise;

  • Registration Certificate, Memorandum of Association (MoA), Articles of Association (AoA) and date of incorporation of the promoter’s enterprise;

  • Audited balance sheets of the last three financial years;

  • Audited report and director’s report of the last three years; and

  • Name, address, contact details, and photographs of the promoter/director/partners/chairman/ or any other authorized person.

What Are the Key Benefits?

Before RERA, the real estate industry was in shambles. Customers faced delays, there was no regulation, and there was widespread corruption and high-handedness of real estate agents and builders. We see the following key benefits after RERA came into the picture: 

  • Carpet Area: A statutory definition of carpet area dispels the doubts regarding its determination. Promoters decided on carpet areas before RERA came into being. 

  • Buyers can seek information regarding the projects (Section 19, Clauses 1 & 2): Buyers under RERA can seek information such as completion status, plan layout, stages of construction, etc.

  • Delaying projects led to consequences for the promoter: Under RERA, each promoter has to give a due date on which they will hand over the possession of the property to the buyer. If the promoter cannot complete the project by this date,he can face penal consequences. 

  • Liability of promoters:  If there is any structural defect or flaw in constructing a property, the allottee may bring up such an issue to the notice of the promoter and the promoter will be obligated to rectify such flaws within 30 days. If the promoter does not do the same, the allottee will need to be compensated for such structural defects.

  • Advance Payments up to 10%: Under RERA, the builders cannot demand advance payments that are more than 10% of the project's total value.

  • The buyers were given rights in case of false promises: If the allottee finds themselves in a position where the initial promises made by the promoter are not being kept, or there is a mismatch in the commitment between the parties, the allottee under this Act, has the right to withdraw from the project and get a full refund (sometimes with interest or compensation).

People Also Read This: What is the RERA Act?

Impact On Home Buyers

Homebuyers now have the following rights under RERA: 

  • Buyers need not pay for the walls area, as the definition of carpet area is now clear. 

  • Builders need to disclose information, establishing transparency between the buyers and builders.

  • Registration manifests the credibility of builders and real estate agents. 

  • RERA also prevents indefinite delays in project development and misappropriation of funds. 

  • Asking for refunds in case of uncompleted projects is also easier under RERA. 

Impact On Real Estate Agents

RERA has the following impact on real estate agents:

  • Real estate agents now have to mandatorily register themselves and also keep renewing this registration. 

  • If a real estate agent is not registered, he will have to pay penalties. 

  • Real estate agents will have to maintain accounts, books, records, etc. 

  • They should display their registration number at all times, especially in the advertisements they place. 

  • False advertisements will attract a penalty. 

Penalties

Various penalties under RERA are:

  • Section 60: We already know that a promoter has to register themselves under Section 4 of RERA. For furnishing false information, a penalty of up to 5% of the approximate cost of the real-estate project needs to be paid.

  • Section 61: Just like in the previous section, even if the promoter violates any other provision of RERA (i.e., other than Sections 3 & 4), the same amount of penalty can be levied against them.

  • Section 63:  For non-compliance with RERA authority order, a penalty upto 5% per day gets levied on the promoter. 

  • Section 64: For failure to comply with the order of the RERA tribunal, a promoter may also face imprisonment. 

  • Section 62: If the real-estate agent violates the provisions of Section 9 & 10, they will be required to pay ₹ 10,000 per day till such default continues.


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RERA Laws Across India

Till now, every state has notified the rules for their respective state authority under RERA. The only exception here is the state of Nagaland, which is under process to notify the rules.

Most states have launched their websites regarding the same. However, in this regard, some north-eastern states (such as Assam, Manipur, Arunachal Pradesh, and Sikkim) and Jammu & Kashmir, Ladakh, and NCT of Delhi are lagging.

West Bengal refused to implement RERA and enacted its legislation called, “Housing and Industrial Regulation Act, 2017,” challenged in the Supreme Court.

Several states have implemented a diluted form of RERA. This has increased difficulties for homebuyers in these states.

RERA is forward-looking legislation, and before buying a house, you should always check the RERA registration of the builder and the real estate agent. If you are in the real estate business, make sure to comply with the provisions of RERA.

Consulting a Lawyer is always useful for quick and authentic information about RERA Act

Soumya Shekhar
Soumya Shekhar 05 min read 1402 Views
What is RERA Act
Property

What is RERA Act

Like all laws, RERA Act also has certain legalese in it. There are certain legal terms which are not easily understood by the common people. We try to simplify these legal terms for you and bring a ready explainer for the same.

Let us explore some of the real estate jargons in the RERA Act.

Carpet Area

RERA Act defines carpet area as the “net usable floor area of an apartment”. Carpet area excludes the area of external walls, lifts, balconies etc. Internal walls however fall under the definition of carpet area. Before RERA, the definition of carpet area was not legally given and hence, there was a lot of confusion regarding this. The builders often took advantage of this ambiguity. With a clear definition in place, homebuyers can now rest assured. 

Consulting a Lawyer is always useful for quick and authentic information about RERA Act.

Super Built-Up Area

Before we understand super built-up area, it is important to understand the meaning of built-up area. Built up area includes all areas of your flat (carpet area + balconies, walls etc.). Super built-up area includes built-up area plus your proportional share in the common areas of your building. For instance, if your building has common pathways, parks etc., these would also be included in the term super built-up area, in proportion to your share in them.

Typical common areas included in a super built-up area are: 

  • Staircases

  • Lobbies

  • Lifts

  • Club house

  • Security rooms

However, the super built-up area, does not include the following: 

  • Underground water facilities. 

  • Open swimming pools and skywalks

  • Open sports amenities. 

Occupancy Certificate

An occupancy certificate is the evidence that the building is inhabitable and that its construction is in compliance with all rules and regulations. It is issued by a local government, agency or planning authority. It is the developer of the building who needs to obtain the occupancy certificate. Occupancy certificate needs to be shown at the time of obtaining public utility connections. Typically, a developer applies for an occupancy certificate within 30 days of the completion of the project. The developer or the person applying for an occupation certificate should furnish the following documents: 

  • Project commencement certificate

  • Project completion certificate

  • NOCs for fire and pollution

  • Sanctioned plan of the building. 

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RERA Registration Number

RERA mandates that all real estate developers register under it. RERA registration acts as a stamp of credibility. Once the process of RERA registration is complete, the real-estate developers obtain a RERA registration number. This RERA registration number acts as a proof of authenticity that the project is credible and that buyers can put their money in it. 

Floor Space Index

Floor space index, also known as Floor area ratio, is the ratio of the built up area to the total land of the project. Floor space index is important as it indicates the total area that can be built upon a plot of land. The development control regulation department and the building code of India regulate the floor space index. The type of building, which city it is located in and the amenities available in the building are factors taken into account while determining the floor space index. Floor space index helps in maintaining the ratio of open space to closed spaces and helps in sustainable development of cities. 

Leasehold Property

A property which has been taken on lease is a leasehold property. Builders and real-estate developers, build their projects either on leasehold properties or freehold properties. Leasehold properties are typically on lease from 30 to 99 years. Once, the leasehold period gets over, they convert to freehold properties. Buyers prefer freehold properties to leasehold properties, as certain restrictions operate on leased land. 

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Freehold Property

A freehold property absolutely belongs to the owner. The developer may purchase the same form the owner for the purposes of development of the project. Unlike leasehold properties, no statutory approval is required to transfer the ownership of a freehold property. It is easier to get loans for freehold properties and no restrictions are imposed on the same. 

Pre-Launch Properties

You would have heard about pre-launch properties or pre-launch offers. A pre-launch property is a property whose launch has been announced, even before the approval process is underway. Typically, builders solicit offers from customers, who could be old customers or through real-estate agents a discounted prices for pre-launch offers. Such offers and properties attract potential buyers’ attention as they are available at prices lower than the market value. 

These are a few terms or legal jargons which are widely used in the real-estate sector. RERA Act, also uses these terms in its provisions. It is hence, important that you as a customer should know what these jargons mean and make an informed decision, while buying any property. 

People who read this Article also Consulted a Lawyer about RERA Act.