RERA compliance is an important part of real estate transactions. But what is it, and how do real estate developers and buyers ensure RERA compliance?
The Real Estate (Regulation and Development) Act, 2016 (RERA) is a landmark legislation enacted to regulate the real estate sector in India. It aims to protect the interests of homebuyers and promote transparency and accountability in the sector.
RERA mandates developers to register their projects with the respective state RERA authority before launching or advertising them. It also requires developers to disclose all relevant project information to potential buyers, including the project timeline, amenities, and payment schedule.
RERA Compliance Important
RERA compliance is important for both developers and buyers. For developers, RERA compliance helps to build trust and credibility with potential buyers. It also helps to avoid delays and disputes in project execution.
For buyers, RERA compliance ensures that they are investing in a project that is backed by a credible developer and that is likely to be completed on time and within budget. RERA also provides buyers with a forum for redressal if they have any grievances against the developer.
RERA Compliance Requirements for Developers
- Project registration: Developers must register their projects with the respective state RERA authority before launching or advertising them.
- Disclosure of project information: Developers must disclose all relevant project information to potential buyers, including the project timeline, amenities, and payment schedule.
- Use of escrow accounts: Developers must deposit all buyer payments into escrow accounts. This ensures that the funds are used for the intended purpose and are not diverted to other projects.
- Adherence to project timeline: Developers must adhere to the project timeline as approved by the RERA authority. If there are any delays, the developer must provide a valid reason and compensate the buyers accordingly.
- Delivery of completed units: Developers must deliver the completed units to buyers on the agreed-upon date. If there are any delays, the developer must provide a valid reason and compensate the buyers accordingly.
Due Dates and timelines under RERA
| Sections | Provisions of the Act | Particulars |
| S.3/S.4 | Pre-Registration of Real Estate Project | Obtain RERA registration upon receipt of the Authorized program (can be postponed if the purpose is not to sell immediately). |
| S. 11 | First Renewal / Post Registration | Upon the Project Registration |
| S. 11 with rules | Quarterly Updates | Within 15 days from the end of each quarterly term. |
| Section 4(2)(L)(D) | Audit of Accounts annually | Within 6 months after the completion of the financial year |
| Obtaining Certificates of Service –
| Certificates of Architect, Engineer, and Chartered Accountant in Practice will be received on each withdrawal of funds from the RERA Designated bank account. | |
| Circular | Completion Report | Upon completion of 100% development (internal and external) to the project.
Report during the same quarterly termination |
| Section 6 read with Rule | Application for Extension of Expiration Date for the project | Within 3 months before the deadline for registration |
| S.14 | Application for modification | Before/after authorization of authority for any change of application for registration subject to change/amendment. |
| Structural Defect Warranty By Developer | Five years from the date of transfer to the allottee. | |
| Attend to Structural defect by the promoter | Rectification of defects by promoters without further charge, within thirty days from the date of notice | |
| Section 11 | Formation of the Association of Allottees | It shall be formed within three months of the majority of allottees who booked a site/apartment. |
| Section 17 | Transfer of title | Within 3 months from the issuance date of the certificate of occupancy. |
| Conveyance of plot/apartment | Transfer deed after obtaining a residence permit (occupancy certificate). | |
| Hand-over:
| Within 30 days after receipt of the occupancy certificate | |
| Section 18 r/w rule | Reimbursement/return of amount on Cancellation | Within 30/60 days of such Cancellation |
| Section 5 | Provision for grant of Registration by authority for the real estate authority | Within 30 days from the application date. |
Benefits of RERA Compliance
For Developers
RERA compliance helps developers build trust and credibility with potential buyers, which can lead to increased sales and higher profits. It also helps to reduce disputes between developers and buyers, saving developers time and money.
Additionally, RERA compliance helps developers improve their project execution by requiring them to have a clear plan in place for the project and to stick to the approved timeline and budget.
In short, RERA compliance is beneficial for developers in a number of ways, including:
- Increased sales and profits
- Reduced disputes
- Improved project execution
- Enhanced credibility and trust with buyers
By complying with RERA, developers can create a more transparent and accountable real estate sector, which benefits all stakeholders involved.
For Buyers
RERA compliance protects the interests of buyers in a number of ways. For example, RERA requires developers to disclose all relevant project information to buyers and to deposit all buyer payments into escrow accounts. This ensures that buyers are well-informed about the project they are investing in and that their funds are safe and secure.
RERA compliance also helps to ensure that projects are completed on time and within budget. This is because RERA requires developers to adhere to the approved project timeline and to compensate buyers for any delays. This gives buyers peace of mind, knowing that they will receive their completed unit as scheduled.
Finally, RERA provides buyers with a forum for redressal if they have any grievances against the developer. This can help buyers to resolve their disputes quickly and efficiently. For example, if a buyer is not satisfied with the quality of construction or if the developer delays the project, they can file a complaint with the RERA authority. The RERA authority will then investigate the complaint and take appropriate action against the developer.
RERA Advisory
Avoid the hassle of requesting from various promotional project planners to extend the timeline for the completion of their real estate project, regional/union regulatory authorities may issue the following orders/directions in respect of all registered projects when the completion date, updated completion date or extended completion date as registration ends March 25, 2020, or thereafter:
- Regulatory authorities may issue orders/directives to extend the registration/termination date or the revised expiration date or the extended termination period by 6 months due to covid-19 breach by requesting Force Majeure provisions under RERA;
- The regulatory authorities may, in their view, consider extending the deadline for another 3 months, if the situation in their states, for written reasons, requires special consideration to consider force majeure of the current epidemic;
- The regulatory authorities may issue new Registration Certificates with periodic updates to each such housing project as soon as possible; and
- Regulatory authorities may extend the timelines of all compliance as per the provisions of RERA and the laws and regulations framed under it.
FAQs
What should I do if I am a buyer and my developer is not complying with RERA?
If you are a buyer and your developer is not complying with RERA, you can file a complaint with the RERA authority. The RERA authority will investigate your complaint and take appropriate action against the developer.
What happens if a developer does not comply with RERA?
Developers who do not comply with RERA may be subject to a number of penalties, including fines, imprisonment, or a combination of both. The RERA authority may also direct the developer to rectify any violations or to compensate buyers for any losses they have incurred.
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