Introduction
The real estate sector is a significant part of the economy and helps the nation meet its demands for housing and infrastructure. Despite the fact that this industry has seen remarkable growth in recent times, it has been mainly under-regulated. Although the Consumer Protection Act of 2019, gives real estate buyers a place to voice their grievances, the solution is only curative and does not fully solve all the issues that buyers and promoters in that industry face. The industry’s ability to grow in a healthy and organized manner has been hampered by the lack of uniformity. Therefore, the RERA Act was passed to meet the need for the regulation of the real estate sector. Continue reading the blog to know more about it.
What is the RERA Act?
RERA, which stands for Real Estate Regulatory Authority, was established as a result of the Real Estate (Regulation and Development) Act of 2016, which intends to safeguard homebuyers and encourage real estate investments, On March 10, 2016, the Upper House (Rajya Sabha) approved the bill enacting this Parliament of India Act. Beginning on May 1, 2016, the RERA Act went into effect. 52 sections were informed out of 92 at that time. From May 1 to May 31, 2017, all other provisions took effect.
How Can I Tell If a Property Is RERA Compliant?
To ensure that a property complies with RERA, the following must be considered:
- Before starting or marketing a project on a specific property whose area exceeds 500 square meters, or eight apartments, the builders must register it under the RERA Act.
- Builders are required to show evidence that they have put 70% of the entire amount into a separate escrow account rather than using it for another investment.
- Before promoting a new project, builders must secure the essential approvals. Early bird specials and pre-launch deals will no longer be available.
Salient Features
- Establishment of a Real Estate Regulatory Authority in each Indian state to supervise, adjudicate, and resolve any conflicts involving real estate projects there.
- Establishment of a fast-track mechanism for settlement of disputes which will be done via an appellate tribunal and dedicated adjudicating officers.
- All real estate projects must be registered with RERA before launch of the project and initiation of sale of units by the promoter
- In addition to the written RERA permission, two-thirds of the allottees must agree in writing if a promoter wants to transfer or assign most of their rights and obligations in a real estate project to a third party.
- Both the buyer and the promoter will be required to pay an identical rate of interest if any party defaults in any way.
- The promoter will be required to make up any losses suffered by the buyer as a result of third parties claiming ownership of property that is now under development or has already been built (defective title to land). There is currently no law that restricts the amount of compensation that can be received.
- A person can file a complaint with RERA if they are concerned that a promoter, buyer, or agent has violated any of this Act’s rules or provisions.
- RERA has the power to prevent an agent, promoter, or buyer from carrying out any actions for which a complaint has been made while an inquiry is being conducted.
Carpet Area Defined Under RERA Act
According to the Real Estate (Regulation and Development) Act of 2016, the developers must advertise their apartments based on the carpet area.
- In accordance with the Act, the whole area of the floor that can be used inside the apartment’s walls is referred to as the carpet area. Areas like open terraces, shafts, balconies, etc. are excluded from this.
- This standardisation of the carpet area specification will prevent salespeople from misleading customers.
Penalties under RERA
For Promoters
| Offence | Penalty |
| Non-registration | 10% of the project’s estimated cost |
| Giving false information | 5% of the project’s estimated cost |
| Violation of laws | Up to 3 years imprisonment or a fine of 10% of the estimated cost of the property, or both |
Source: Bankbazaar.com
For Agents
| Offence | Penalty |
| Non-registration of projects | Rs.10,000 per day up to 5% of the approximate cost of the project |
| Non-compliance with RERA | Daily penalty of up to 5% of the project’s estimated value |
| Non-compliance with the Appellate Tribunal | Imprisonment for up to 1 year or 10% of the project’s estimated cost, or both |
Source: Bankbazaar.com
Conclusion
The Act is a significant step in terms of enhancing market transparency, raising promoter and developer accountability, and establishing efficient mechanisms for grievance resolution.
The RERA has taken appropriate and consistent actions to encourage the development of the real estate sector because it is committed to the successful and effective implementation of the nation’s real estate law. Numerous policy decisions made in accordance with the RERA will unquestionably result in substantial advancements in economic and social transformation, hence promoting the long-term growth of the RERA and a customer-friendly environment.
About Us
Achyut Group is a trusted brand due to its ethical values among the customer, vendors and competitors. We believe in creating environment friendly green buildings by conserving energy, water and wood. The promoters of Achyut Group combine over 20+ years of experience in the construction legal, finance and marketing sector.
