RERA - Benefits, Documents required and Registration Process

RERA - Benefits, Documents required and Registration Process

RERA - Benefits, Documents required and Registration Process

 

RERA Registration is necessary for promoters, builders and real estate agents to be able to sell, advertise, market, purchase or book housing properties. RERA stands for Real Estate Regulatory Authority which is an act of the Parliament of India seeking to protect home-buyers and helps boost investments in the real estate industry. It is meant to bring transparency and accountability that would regain the lost faith of the people in the real estate industry. Through RERA registration, the real estate Act, 2016 established it in each state for regulation of the real estate sector and also acts an adjudicating body for speedy dispute redressal. This Act came into existence on 1 May 2016 with 59 of 92 sections notified. Within the period of 6 months, the central and state governments are liable to notify the rules under the Act.

 

Who Need to Apply for RERA Registration

The following people or group of people is entitled to obtain RERA Registration;

·         Any person who constructs or wants to builds an independent building or a building consisting of apartments.

·         Or an individual or entity involved in modifying existing apartments for the purpose of selling it further to somebody

·         Anyone who develops the land into a project, to sell projects to other people

·         Any development authority/ public body in respect of allottees of Buildings or plots constructed by such authority or public body on which owns land or placed at their disposal by the government

·         Development authority owning plots or which is placed at their disposal by the government to sell the apartments

·         A state-level cooperative housing finance society or a primitive cooperative housing society which constructs the buildings for its members

·         Anyone who acts himself as a builder, contractor, developer, colonizer, estate developer or by any different name or

·         A person who claims to be the holder of a power of attorney from the owner of the land or have the legal possession of the land or property on which the building or flat is constructed or a plot is developed for the purpose of sale

Benefits of RERA Registration

Given below are some of the benefits of registering under RERA or Real Estate Regulatory Act, 2016[1];

Timely delivery

Previously it was seen that the builders or developers often used to make false promises about the completion date of a project, but hardly delivered on time. As per the Act, strict regulations will be enforced on builders to make sure that construction runs on time and flats are delivered to the customers within the decided time. Additionally, if the in case the builder is not able to provide the apartments on time, he/she becomes liable to refund the amount to the purchaser with interest.

Delivery of Accurate Project Details

Builders need to promote their projects, defining various amenities and features related to projects in the construction stage. As per the Act, the builder cannot make any changes in the projected plan. And if a builder is found at fault then, he/ she will have to pay 10% of the project’s expenses or face jail time up to three years.

Ensuring all permissions

Developers often attract buyers by providing huge discounts and pre-launch offers. Therefore, the buyer, enticed by the proposals, does not bother about the clearances and book or buy a property. But, due to delays in getting approval, the buyer does not get the flat on time. This bill ensures that builders get all the permissions before selling the apartments.

Ensuring Proper Structure

It is the builder’s responsibility to repair structural defects for up to five years if a buyer finds any fundamental insufficiency in the development of the building

No Advertisement is permitted without RERA Registration

Promoters are not allowed to advertise any project without RERA registration with the Real Estate Regulatory Authority established under this Act. Additionally, each advertisement needs to carry the RERA registration number.

Reduction of Booking Amount

The sum to be paid by the buyer has been reduced from 20% to 10%, which needs to be remunerated only after registering the contract for sale with the builder. Termination of the contract is allowed only if the buyer defaults on payment thrice. The buyer is entitled to serve a 15-day notice.

 

The Validity of RERA Registration

The approved registration will be valid for a period, specified by the promoter for completion of a real estate project. Also, it will be valid for the period specified to complete a particular project, as mentioned in the affidavit following the application form.

However, the validity of such registration can be extended under the following circumstances;

·         Force Majeure like drought, war, flood, fire, cyclone, earthquake or any other calamity caused due to natural factor, affecting the usual development of a real estate project.

·         Other than force majeure or the ‘Act of God’, the concerning authority may extend the registration to maximum one year in case it feels that the circumstances and reasons for the extension of the case are reasonable.

RERA Registration Process

Every promoter and agent need to register themselves with their respective state RERA Authority. There is a separate provision for the steps involved in the registration of agents and for registering for a real estate project. Let’s look at both the procedures in detail;

Registration for Real Estate Projects

The promoters need to convene a board meeting concerning the following to register for a project;

·         Opening a separate bank account to cover the cost of construction

·         Drafting of the RERA registration application

·         Attaining approval for the allotment letter, sale agreement, and sales deed

·         Obtain the title search report concerning proposed land

·         Acquire essential NOCs and licenses from the government authorities such as the Fire Department, National Highway Authority of India, Airport Authority of India, National Authority Disaster Management Authority etc.

·         Collecting all the necessary documents for filing application in Form A

·         Submitting the RERA registration application with the respective state authority along with the prescribed fees

Registration of Agents

Real Estate Agents need to follow the steps given below to acquire the registration;

·         For obtaining RERA Registration, you need to file a duly filled form along with the prescribed fees and documents

·         After you file the application, you will receive a registration number from the regulatory body which must be provided in documents related to the sale of the property

·         Also, you need to maintain a Books of accounts, records and other transaction-related documents quarterly

·         You have to provide detailed information and supporting documents regarding the project you entered with the buyer.

·         While applying, you must be aware that the agent may be suspended in case of misrepresentation of facts or fraud at the time of RERA registration.

Documents Needed for RERA Registration

Although the documents required for registering under RERA differs from state to state here are some of the basic documents required for RERA Registration;

Documents Needed by Developers to apply for an ongoing project

·         Details of an individual promoter such as name, address, photo, and contact details

·         In case of other than the individual promoter, the details of partners, chairman, directors, and another authorized person. Additionally, the details of the entity, it’s type, name, address, etc. of the entity has to be provided

·         Copy of promoter’s PAN and Aadhar

·         A copy of the approval attained from the concerned authority

·         Plan of development

·         Details of the project

·         Income tax return (ITR) and audited financial statements of the past three years

·         Title deed with the chain of title

·         Documents of ownership like Performa of the allotment letter, sale agreement, conveyance deed, etc.

·         Information on architect, engineers, etc.

·         Any other required documents

Documents Needed by Agent

·         Details of real estate agent like name, photograph, partners, directors, address, contact details

·         PAN and Address of Real estate agent

·         Address proof

Who Does Not Need to Register Under RERA?

The specified persons are exempted from registering under the Real Estate Regulatory Act, 2016 (RERA);

·         The area of land proposed for developing is less than 500 square meters or the number of apartments designed does not exceed eight apartments, including all the phases, are exempted from registration.

·         The promoter has received the completion certificate for a real estate project prior before the commencement of RERA.

·         The real estate project requested for re-modelling, replacement or development of projects is those projects which do not require marketing, advertising, selling or new allotment of an apartment

Offences and Penalties

If any of the entitled people fail to obtain a registration, they are liable for penalties under Section 59 or Real Estate Regulatory Act, 2016 as follows;

·         Penalty up to 10% of the estimated project cost

·         In case of continuous default, an additional fine up to 10% of the estimated project cost

·         Imprisonment up to three years


FAQs

 

Q. Does RERA cover the commercial projects also?

RERA covers all type of projects whether residential or commercial including shops, buildings, and offices.

 

Q. Is RERA also applicable on ongoing projects or only to the upcoming projects?

RERA is applicable on those ongoing objects which have not received a completion certificate. They were required to register within 3 months of the implementation of this act.

 

Q. Is it mandatory to register all the complexes by the builders?

Yes, RERA registration for builders is mandatory otherwise they won't be able to sell it.

 

Q. What will happen if the builder fails to deliver in the prescribed period?

They have to adhere to the timelines otherwise they would have to bear fine penalties.

 

Q. Is there any restriction on the advertisement or promotion?

The developer has to mention the RERA registration number on advertisements and promotions.

 

Q. Can RERA registration for builders be extended?

It can only be extended in case of natural calamities for a maximum period of one year.


For more information visit www.taxaj.com
Posted by Pooja
Team Taxaj

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