The acronym RERA stands for Real Estate Regulatory Authority (“RERA”) which is established under the Real Estate (Regulation & Development) Act (“Act”). This Act was introduced in the year 2016 to regularise the problems existing in the real estate sector. The Act will be implemented at the State level, and the governing authorities are responsible for the following:
- Registration and other related approvals for the registration under RERA of commercial properties and residential flats.
- Regulating the sale and purchase transactions of real estate properties.
RERA registration brings about transparency in these contracts and benefits all the parties to the transaction. It also brings about accountability by reducing the chances of delay in real estate contracts. The main aim of the registration is to protect buyers of real estate and simultaneously uplift the investment in the real estate sector.
The RERA Act makes it mandatory to register a project with RERA, for the launch of any residential or commercial real estate project where the land area is more than 500 square meters. Registering with RERA helps in creating transparency in the implementation of the projects launched.
Objectives Of RERA Registration
- More transparency and accountability towards consumers in order to protect their interests.
- To resolve grievances by establishing the dispute resolution mechanism.
- To reduce frauds by increased compliances.
- To reduce delays through fair play.
- To ensure smooth operations by bringing professionalism and standards in place.
- To create awareness by promoting good governance practices.
- To bring ease in transactions due to imposed responsibilities on the promoter as well as the buyer.
- To set up the Appellate Tribunal to listen to appeals arising from the orders, decisions or directions of RERA.
Applicability of RERA Registration
- Parties to the transaction – It applies to promoters and real estate agents which includes builder, developer, contractor, development body or any other public body who/which constructs/develops land/building/apartment for the purpose of sale.
- Type of properties – It applies to commercial buildings, residential apartments, and plot developed for sale.
- Area – The registration applies for real estate projects exceeding 500 sq. meters or having more than eight apartments.
Process of RERA Registration and Documentation
RERA registration is a state-wise registration process and hence varies from state to state. The process is online and can be applied from the official website of the state in which the registration is applied for. The promoters and the real estate agents have to submit the relevant documents along with the application for registration to the Regulating Authority of their respective states.
There are some documents that are common to the registration process across all states. They are as follows:
Documents required for Promoter Registration:
- PAN card of the promoter.
- Parking slots available in the real estate project.
- Legal title deeds reflecting the title of the promoter of the land on which project is proposed.
- Encumbrance Certificate relating to the land of the project.
- Commencement Certificate of the project
- The Sanction Plan, Layout Plan, location details of the project.
- The plan of development works to be executed in the project.
- Details of previous project experience of the promoter, if any.
The following documents related to the previous project experience, if any of the promoter/promoter enterprise is to be submitted along with the registration:
- Previous project experience – if yes, details of the projects launched by him in the last 5 years.
- Name of project.
- Status of project
- Any delay in its completion.
- Pending case – if yes, – case name and number.
If the promoter is an enterprise such as a company, partnership, society or proprietorship, the following additional documents relating to the promoter enterprise is required:
- Name, type and registered address of the enterprise.
- Particulars of the registration of the enterprise such as Registration Certificate, Memorandum of Association (MOA), Articles of Association (AOA) and date of incorporation.
- Audited balance sheet of the previous three financial years.
- Audited report and directors report of the preceding three years.
- Name, address, contact details and photographs of the promoter/director/ partners/chairman/ or any other authorized person.
In case the promoter is not the landowner on which the project development is proposed, then the following documents are required:
- Consent of the owner.
- Development agreement.
- Joint Development Agreement.
- Collaboration Agreement.
- Any other agreement between owner and promoter.
- Title deeds of the owner.
Documents required for Real Estate Agent Registration:
- PAN.
- Permanent address proof.
- Photograph.
- Details of real estate agent enterprise, if applicable which includes its name, registered address, type of enterprise, proprietorship, societies, co-operative society, partnership, companies, etc.
- Particulars of registration of the enterprise, if applicable such as the bye-laws, memorandum of association, articles of association etc.
Advantages Of Registration Of Real Estate Projects Under RERA For Buyers
- On-time possession of the property- The biggest loophole in the real estate sector has been fake promises by promoters of completion and delivery of projects, thereby causing huge financial worries and mistrust among the buyers. When promoters register under the RERA, they must provide the estimated date of completion of the project, failing which there will be huge penalties imposed on the promoter.
- Accurate details of the project- The promoter must provide the complete and accurate details of the project like the stage of completion, the amenities provided, and other relevant details or projects being executed, which cannot be altered later.
- Assured license clearances- Prior to RERA, the promoters would never receive the mandatory licenses and clearance from the government and delay the projects on the pretext of the same. However, for promoters registered under RERA, it is mandatory to have the licenses in place before selling even a single unit. Hence the buyers cannot be now lured into fraudulent schemes.
- Repair of defects- It is the responsibility of the promoter to set right any defect, and deficiencies post the purchase by the buyer.
- Restricted advertisement- The promoter can advertise their projects only after getting the required registration under RERA, and the registration number must also be displayed in the advertisement.
- Payment of the booking amount- The booking amount of 10% has to be paid only after the registration of the sale agreement.
FAQs
Q: Can the RERA registration be revoked?
Yes. When the RERA authority receives any complaint against a developer or build
Q: Is the RERA Act applicable to both residential and commercial projects?
Initially, only residential projects were covered in the RERA bill. However, later on commercial projects including buildings, shops and offices were also included in the RERA Act through various amendments.
Q: What is the validity of RERA registration?
The RERA registration is valid for the period of the project completion as declared by the promoter.
Q: What are penalties prescribed under the RERA Act?
The following penalties are applicable under the RERA Act:
- When the agent commits any default in registration, he/she will be liable for a penalty of Rs.10,000 per day that can extend to 5% of the cost of the building or plot.
- When the promoter provides false information, he/she will be liable to a penalty which may extend up to 5% of the estimated cost of the real estate project.
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