RERA
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The Real Estate (Regulation and Development) Act was passed in 2016 to protect home buyers and boost investment in real estate. It establishes the Real Estate Regulatory Authority (RERA) and mandates that all residential and commercial projects register with RERA. Projects must disclose all details online and obtain registration to launch. The Act also prohibits opaque financing and requires prices to be quoted based on carpet area. It introduces penalties for project delays and changes from what was promised. [/SUMMARY]
RERA
- 1. Toiled By:- Piyush Kumar
- 2. The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016. The Act came into force from 1 May 2016. Remaining provisions will come into force from 1 May 2017. The Central and state governments are liable to notify the Rules under the Act within a statutory period of six months. OVERVIEW
- 3. Real Estate Regulatory Authority (RERA) Bill was introduced by the Indian National Congress government in 2013. In December 2015, the Union Cabinet of India had approved 20 major amendments to the bill based on the recommendations of a Rajya Sabha committee that examined the bill. HISTORY
- 4. The Real Estate Act makes it mandatory for all commercial and residential real estate projects where the land is over 500 square meters, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) for launching a project. For on-going projects which have not received completion certificate on the date of commencement of the Act, will have to seek registration within 3 months. Application for registration must be either approved or rejected within a period of 30 days from the date of application by the RERA. On successful registration, the promoter of the project will be provided with a registration number, a login id and password for the applicants to fill up essential details on the website of the RERA. REGISTRATION
- 5. The Act prohibits unaccounted money from being pumped into the sector and as of now 70 per cent of the money has to be deposited in bank accounts through cheques. A major benefit for consumers included in the Act is that builders will have to quote prices based on carpet area and not super built-up area, while carpet area has been clearly defined in the Act to include usable spaces like kitchen and toilets. PROTECTION OF BUYERS
- 6. Currently 6 states have formulated the law including Gujarat, Odisha, Andhra Pradesh, Madhya Pradesh, Uttar Pradesh, & Bihar. RERA protects buyers in the real estate projects. They are the king now. As per RERA, real estate developers and agents need to register with State Real Estate Regulatory Authority by 30th July. KEY POINTS FOR RERA
- 7. In case, real estate developer wants to make any structural changes after the start of the project, it needs to take 2/3rd of the buyers consent. Without such consent, no structural changes can be made. Real Estate Developer would be penalized including imprisonment up to 3 years in case of any delay in the projects or incase he makes any change to what has been promised in the project. Real Estate Developer should provide all project details on Real Estate Regulator website & provide regular update on construction progress. KEY POINTS FOR RERA
- 8. RERA would bring more transparency between buyers, developers, & real estate agents. Since real estate sector contributes 9% to GDP to India's growth this would definitely boost investments in Real Estate Sector. The bill proposes to cover residential as well as commercial real estate. CONCLUSION
Editor's Notes
- 1. In order to provide greater transparency in project-marketing and execution.