For a long time, home buyers complained that real estate transactions were lopsided and heavily in favour of the developers. There have been innumerable incidents across states where homebuyers got late possessions of their homes; sometimes the developer didn’t complete the project itself! The Govt. of India then introduced RERA intending to create a more equitable and fair transaction between the seller and the buyer of properties
RERA or the Real Estate Regulatory Authority was established under the Real Estate (Regulation and Development) Act, 2016, to regulate the real estate sector and address the issues faced by home buyers. It aims at protecting the interest of the allottees and maintaining transparency to reduce the chances of fraud.
This Act provides a unified legal regime for the purchase of flats; apartments, etc., and seeks to standardize the practice across the country. However, states may have additional controls too. As of March 26, 2022, 31 states and union territories (UTs) have set up Real Estate Regulatory Authority (25 regular and 6 interims). States namely Ladakh, Meghalaya, Sikkim, and West Bengal have notified the rules but are yet to establish the authority.
Since the states need their RERA guidelines, new RERA rules in Maharashtra may significantly vary from those applicable in the state of Uttar Pradesh. Thus, for compliance with the RERA Act, 2016 in a particular state or Union Territory, the official website of that particular area should be checked as provided in the table below.
A RERA-approved residential project acts as a safeguard for homebuyers. But what does RERA approval means?
A RERA approved project would mean transparency from the developer regarding the following:
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There is a regulatory authority to handle issues in each state and union territory. It protects the interests of the stakeholders, accumulates data at a designated repository, and creates a robust grievance redressal system. To prevent time lags, the authority has been mandated to dispose of applications within a maximum period of 60 days; and the same may be extended only if a reason is recorded for the delay. Further, the Real Estate Appellate Authority (REAT) shall be the appropriate forum for appeals.
Every real estate project (where the total area to be developed exceeds 500 sq meters or more than 8 apartments are proposed to be developed in any phase), must be registered with its respective state’s RERA. Existing projects where the completion certificate (CC) or occupancy certificate (OC) has not been issued, are also required to comply with the registration requirements under the Act. Only when registration is completed and other approvals (construction related) are in place, can the project be marketed.
This is a huge benefit for investors.
One of the primary reasons for the delay of projects was that funds collected from one project would invariably be diverted to fund new, different projects. To prevent such a diversion, promoters are now required to park 70% of all project receivables into a separate reserve account. The proceeds of such an account can only be used towards land and construction expenses and will be required to be certified by a professional.
The promoters are required to make periodic submissions to the regulator regarding the progress of the project on the RERA website. Homebuyers will be able to monitor the progress of the project.
To ensure that violation of the Act is not taken lightly, stiff monetary penalty (up to 10% of the project cost) and imprisonment has been prescribed against violators.
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RERA new rules 2022 particularly focus on the consumer’s interest and provide for strict implementation of the central RERA Act, 2016 by states.
The RERA new rules 2022 include the following:
Registration as per RERA new rules 2022 requires a document checklist for real estate, y the concerned persons. Once a real estate promoter/ agent has duly completed registration with the state or UT’s RERA, there is no provision for renewal of such licence in the central RERA Act, 2016. However, such registration may be suspended in case of a breach.
These are provisions under the center’s new RERA rules. There might be some more requirements under the state/ UT rules.
The RERA Act truly acts as a safeguard against fraudulent practices of the builders and presents a fair play for both buyers and sellers of property. So book your dream abode without worries!