Updated Feb 28, 2022

What is Real Estate Regulatory Authority (RERA)?

What is Real Estate Regulatory Authority (RERA)?

 

 

The Real Estate (Regulation and Development) Act, 2016, (RERA) is a law passed by India's parliament. The RERA aims to protect home buyers' interests while simultaneously encouraging investment in the real estate market. While the Rajya Sabha cleared the RERA law on March 10, 2016, the Lok Sabha approved it on March 15, 2016. On May 1, 2016, the act went into effect. While 59 of its 92 parts became effective on May 1, 2016, the other provisions took effect on May 1, 2017.

 

State governments are obligated by the Act to notify their own rules under the Act, based on the model rules set by the central Act.

 

 

What RERA Act is?

 

The Real Estate Regulatory Authority, or RERA, was founded under the Real Estate (Regulation and Development) Act of 2016, with the goal of regulating the real estate business and addressing concerns that home buyers confront. Its aims are as follows:

 

• To protect the interests of the allottees and ensure their accountability

 

• To ensure transparency and decrease the possibility of fraud; • To implement Pan-India uniformity and professionalism;

 

• To improve the flow of accurate information between home buyers and sellers.

 

• Impose increased duties on both builders and investors.

 

• Increasing the sector's dependability and, as a result, investor confidence.

 

Homebuyers have long complained that real estate transactions are unbalanced and significantly skewed in favor of developers. RERA and the Indian government's model code aim to foster more equal and fair transactions between property sellers and buyers, particularly in the primary market. It is envisaged that RERA will simplify real estate purchases by introducing greater accountability and transparency, provided that states do not weaken the terms and spirit of the central legislation. The RERA will be India's first Indian real estate regulator. The Real Estate Act requires each state and union territory to establish its regulator and to establish the rules that will regulate the authority's operation.

 

 

Importance of RERA

 

Aside from regulating and developing the real estate sector, RERA ensures the sale of a plot, building, or apartment, as well as the sale of any other real estate project, through highly transparent and efficient commercial transactions. Furthermore, RERA serves as an adjudicating tool for expeditious conflict resolution and contributes to the establishment of the Appellate Tribunal, which is required to hear appeals from the Real Estate Regulatory Authority's decisions, instructions, or decrees. In brief, RERA aims to protect consumers' interests in the real estate business.

 

RERA also assures that transactions between buyers and sellers of houses in the primary market are fair and equitable, making the home-buying process considerably simpler. In a word, the Real Estate Regulation Authority promotes openness in the real estate industry and eliminates existing disparities and difficulties.

 

 

What is RERA in the carpet area? 

 

The area of a property is commonly measured in three ways: carpet area, built-up area, and super built-up area. As a result, when it comes to purchasing a home, there can be a significant disparity between what you pay and what you get. According to Gautam Chatterjee, the chairman of the Maharashtra RERA, "it is now required for the developers of all current projects to reveal the size of their units, based on carpet area" (i.e., the wall area within 4 walls). This includes useable areas such as kitchens and restrooms. This adds clarity, which was lacking previously" The RERA defines carpet area as "the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area, and exclusive open terrace area, but including the area covered by the apartment's internal partition walls." According to Rahul Shah, CEO of Sumer Group, "According to RERA requirements, a builder must publish the precise carpet area, so that a consumer knows what he is paying for." The statute, however, does not make it mandatory for builders to offer a unit based on carpet area."

 

 

Which projects are eligible for RERA approval?

 

• Commercial and residential developments, including plotted development
• Projects larger than 500 square meters (8 units).
• Projects that did not have a Completion Certificate before the Act's implementation.
• If the project is solely for renovation/repair/redevelopment and does not involve re-allotment, marketing, advertising, selling, or fresh allotment of any apartments, plots, or buildings in the real estate project, it will be exempt from RERA.
• Each phase is to be treated as a separate real estate project that requires a new registration.

 

 

How can I register a project with RERA?

 

• An authenticated copy of all approvals, a commencement certificate, a sanctioned plan, a layout plan, specifications, a plan of development work, proposed facilities, a Proforma allotment letter, an agreement for sale, and a conveyance deed will be provided.
• Submitting a project registration application to RERA.
• New and current projects must be registered with RERA before they may be launched.
• RERA registration for agents/brokers.
• Dispute resolution at RERA and RERA appellate tribunals within 6 months.
• Registration of different phases of the same project separately.
• Developers must submit with RERA details of projects launched in the last five years, including status and reasons for delays.
• Regular updates to the RERA website.
• Maximum one-year extension in the event of a delay caused by no fault of the developer.
• A CA conducts an annual audit of project accounting.
• Conveyance deed in favor of RWA for common area.
• Land title and construction insurance.
• project completion timeline.

 

 

How will RERA impact real estate agents?

 

Real estate agents will be required to register under the Real Estate (Regulation and Development) Act (RERA) to effectuate a transaction. In India, the broker market is expected to be a USD 4 billion industry, with 500,000 to 900,000 brokers. It has, however, traditionally been unorganized and unregulated. "It will increase responsibility in the industry, and those who believe in professional and transparent business will profit greatly."

 

Agents will now have a much larger and more responsible role to play, as they will have to provide all relevant information to the consumer and even assist them in selecting a RERA-compliant developer," says Sam Chopra, founder, and chairman of RE/MAX India. Brokers cannot provide any amenities or services that are not included in the agreements while RERA is in effect. Furthermore, they will be required to disclose all information and documentation to property purchasers at the time of booking. As a result, RERA is likely to weed out unskilled, unprofessional, fly-by-night businesses, as brokers who violate the rules face huge fines, jail time, or both.

 

 

How to file a complaint under RERA?

 

"Complaints can be submitted under Section 31 of the Real Estate (Regulation and Development) Act, 2016, either with the Real Estate Regulatory Authority or the adjudicating officer," adds Digbijoy Bhowmik, RICS's head of policy. Complaints against promoters, allottees, and/or real estate agents may be filed. Most state government laws enacted in response to the RERA have outlined the procedure and manner in which such petitions can be submitted. 

 

Basically, Property agents and builders can apply for RERA registration through their respective states' RERA portals. They might register under the name of an individual or an entity. All required paperwork must be submitted to register.

 

 

Conclusion

 

A homebuyer should select a RERA-registered project to ensure that their investment is in good hands. The Real Estate Regulation Authority safeguards homebuyers' and investors' interests while also making the real estate industry more organized and transparent. RERA authority extends to over 70% of all real estate projects in the country.