Last Updated on June 10, 2024 by Satish Mishra
RERA is an act enforced in 2016 in order to help the citizens investing in real estate industry. RERA stands for Real Estate Regulation and Development Act. This particular act is to be established in each state for achieving quick end to a dispute related to real estate and further simplifying the investments made by the people.
Under the RERA Act each state is supposed to establish a Real Estate Authority for the development of the state. This act is to be applied to both residential and commercial properties. The rules of the act are to be established with transparency and accountability for both the buyers and the developers. This act will aim to help in putting a hold on delayed development of the properties.
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Under this act the sale is supposed to be based on the carpet area and not the super built up area. Under this act all the builders in action are supposed to deposit 70% of the finances they have collected from the buyers in a separate bank account. Further the developers/builders have to keep their work and development of the project regularly updated through their website or other mediums.
If any builder violates this law they can be imprisoned for at least 3 years moreover an agent can be imprisoned for 1 year. Along with that if there are any issues with the construction of the property, which is found out in the first 5 years of possession, then it has to be corrected within 30 days. No developer is allowed to sell, offer or book any property without registering with the authority.
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All commercial or residential developers have to get registered under RERA except for the ones who have received a completion certificate under the commencement act, where the area of land does not exceed 500 sq. mt, the apartments are not more than 8 in number and if the building does not require marketing, advertising or sale.
In order to register under RERA, the following documents are to be submitted:
- PAN of the developer
- ITR or the last 3 years.
- Clarifications about the property
- Declaration of the legal land proof possession by the builder.
- Details of the property.
- Details of the project.
- If the owner is other than the developer, then the consent letter of the developer.
- Ownership documents
- Details of all the people involved.
RERA covers for many benefits for a buyer when it comes to investing in a property, some for them are listed below:
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- RERA provides for a standardized carpet space that was not defined previously due to which each builder used to differently measure his or her particular spaces. As now under RERA carpet area is clearly defines its become easier for both the buyer and the developer to standardize the measurements.
- The facts that now the builders will have to update every little detail on the website about the development and other related information to the property has made it easier and stress free for the buyer to invest without any scares about scams.
- In case of any kind of delays while building of the property the developer will according to RERA will have to pay an interest rate of 2% above the SBI’s Marginal Cost of leading rate to the buyer.
- As per RERA the builder is now supposed to submit 70% of the collected money from the investors into a separate bank account, which he can only withdraw on the completion of the project. As now the funds are ensured to be used only for the project they have been collected for now there is zero percent risk of builders committing any kind of wrong doings.
- RERA provides for the right of buyer to get a full refund in case it turns out that the amount he had paid has been used for scamming or any ulterior motive.
- As per RERA now the builder is limited to taking of only 10% of advance payment on the villa or the apartment he is collecting money for.
- In case of delay in construction the buyer is now entitled to right to withdraw from the investment and moreover he has the right to get full refund he paid along with the interest he had submitted.
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The states those are currently functioning with RERA act are as follows: Gujarat, Uttar Pradesh, Chandigarh, Dadra and Nagar Haveli, Andaman and Nicobar Islands, Lakshadweep, Daman and Diu, Madhya Pradesh, Delhi, Maharashtra, Andhra Pradesh, Odihsa, Bihar, Rajasthan, Jharkhand, Uttarakhand, Tamil Nadu, Karnataka, Punjab, Chattisgarh, Haryana, Assam, Telangana, Himachal Pradesh, Goa, Tripura, Puducherry and Kerala.
The RERA act has also now made it compulsory for the brokers or for the agents to be registered under it in order to conduct a fair deal. In order to be registered under RERA the agents have to do the following:
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- They cannot book, sell or advertise without being registered with RERA.
- The RERA number of agent needs to be documented in every sale facilitated by him.
- This particular registration needs to be renewed.
- In case there is any breach by the agent then his registration can be renewed and cancelled as well.
- Under this act the agent needs to facilitate the possession of all the documents to the buyer when he is booking a property.
- The agent has to maintain a book of records of all the sales he makes.
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In case there is any developer or broker not confiding by the rules of RERA is found any person concerned can file a complaint against such person. The complaint filed must be under the rules prescribed under the state RERA act within the mentioned time limit and under the mentioned state policies. Since all states have a different RERA act, each person filing a complaint must confer with their prescribed laws under their state act of RERA, moreover it should be made sure that the complaint is filed under correct jurisdiction.
You may also seek free legal advice from expert real estate RERA Punjab and Haryana RERA Panchkula Authority in case seeking specific advice on the topic of Delay in possession or deficiency in services,
This post is written by Jagriti Mahajan of Kurukshetra University (KU, 2021) Batch.
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