The Real Estate (Regulation and Development) Act, 2016 w.e.f 1st May, 2016.

 

Introduction

The Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted by the Indian government in order to promote the development of real estate in India. It aims at bringing uniformity across states by regulating all aspects of real estate transactions including price, terms and conditions of sale and possession, lease agreements etc.

What is the Real Estate (Regulation and Development) Act, 2016 (RERA)?

The Real Estate (Regulation and Development) Act, 2016 is a piece of legislation that came into effect on May 1, 2017. It was passed by Parliament on May 1, 2016 and amended twice since then to bring it up-to-date with current laws and practices.

The main aim of this Act was to establish a regulatory regime for real estate industry in India by regulating various aspects of its functioning including registration process, fee structure etc., among others.

Why is The Real Estate (Regulation and Development) Act, 2016 (RERA) necessary?

The RERA was enacted to protect the interests of buyers, sellers and developers. It provides a uniform regulatory framework for real estate transactions and brings transparency in the real estate market. The Act also seeks to protect small investors by providing them with additional safeguards and protections against unscrupulous practices by developers or brokers.

The RERA has been effective in bringing about transparency in the real estate market through its registration process which ensures that only registered entities are permitted to transact in properties as well as provide services related thereto like brokerage etc.,

What is the status of RERA in India?

RERA is a good law, but it needs to be implemented properly. In order to make sure that the real estate sector is regulated and developed effectively, we need to know what RERA means in practice.

RERA was enacted by India’s central government as an amendment to the existing laws on real estate development. It was first implemented in Maharashtra and Gujarat in 2017, followed by other states such as Karnataka and Telangana later on. As of now, only five states have fully implemented RERA: Gujarat, Karnataka (including Hyderabad), Madhya Pradesh (including Indore), Rajasthan (including Jaipur) and Uttar Pradesh although several others have made some progress towards implementing this new Act at their respective state levels too!

What is the difference between RERA and the existing laws that govern real estate?

RERA is a comprehensive law that aims to standardize the way real estate is sold in India. RERA is a single window clearance system for developers, brokers, and buyers. It provides for dispute resolution mechanism which includes an appellate authority (RA), if there are any lapses or mistakes in implementation of the Act by any person involved in such transactions as agent or developer/offeree.

The existing laws governing real estate include:

• The Contract Act, 1872

• Sale of Agricultural Produce Act (1959)

• Stamp Duty Act, 1975

Applicability:

• Every project measuring more than 500 square meters or
• more than eight(8) apartments will have to be registered with the RERA.(inclusive of all phases)

Documents required for Registration:

 A. Brief details of enterprise Name

Type ie. Individuals, Companies, proprietorships, societies etc.

KYC documents ie. Certificate of incorporation, TAN, PAN, AADHAAR etc. Names and Photographs of the Promoter

B. Audited Balance Sheet of the promoter for the preceding three financial years and

C. Income Tax Returns of the promoter for three preceding financial years

D. Copy of the legal title deed of the land on which development is proposed to be developed along with legally valid documents with authentication of such title if such land is owned by another person ie. consent of the owner of the land along with a copy of the collaboration agreement, development agreement, joint development agreement or any other agreement

E. Brief details of the projects launched in the past five years

• • Status of the project
  • Delay in completion, if any
  • Pending cases, payments if any
  • Type of land
  • size of the apartment based on carpet area even if earlier sold on any other basis such as super area, super built-up area, built up area
  • area of the plot being sold to the allottees in case of plotted development

F. An authenticated copy of the approvals and commencement certificate from the competent authority obtained in accordance with the laws as may be applicable for the real estate project mentioned in the application, and where the project is proposed to be developed in phases, an authenticated copy of the approvals and commencement certificate from the competent authority for each of such phases;

G. Sanctioned plan, layout plan, and specifications of the proposed project or the phase, and the whole project as sanctioned by the competent

H. The plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof including firefighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy;

I. Location details of the project with clear demarcation of land dedicated for the project along with its boundaries including the latitude and longitude of the end points of the

J. Proforma of the allotment letter, agreement for sale, and the conveyance deed proposed to be signed with the allottees; (format specified in the act)

K. the number, type and carpet area of apartments for sale in the project along with the area of the exclusive balcony or veranda areas and the exclusive open terrace areas appurtenant with the apartment, if any;

L. the number and area of garages for sale in the project;

M. the number of open parking areas

N. the names and addresses of his real estate agents, if any, for the proposed project;

O. the names and addresses of the contractors, architect, structural engineer, if any, and other persons concerned with the development of the proposed project

P. AFFIDAVIT

FORM ‘B’

DECLARATION, SUPPORTED BY AN AFFIDAVIT, WHICH SHALL BE SIGNED BY THE PROMOTER OR ANY PERSON AUTHORIZED BY THE PROMOTER

Affidavit cum Declaration

Affidavit cum Declaration of Mr./Ms.                          the promoter of the proposed project / duly authorized by the promoter of the proposed project, vide it/his/their authorization dated………

I, promoter of the proposed project / duly authorized by the promoter of the proposed project do hereby solemnly declare, undertake and state as under:

1. That I / promoter have/has a legal title to the land on which the development of the project is proposed

OR

                                  have/has a legal title to the land on which the development of the proposed project is to be carried out

AND

a legally valid authentication of the title of such land along with an authenticated copy of the agreement between such owner and promoter for the development of the real estate project is enclosed herewith.

2. That the said land is free from all

OR

That details of encumbrances including details of any rights, title, interest, or name of any party in or over such land, along with details.

3. That the time period within which the project shall be completed by me/promoter is……………..

4. That seventy percent of the amounts realized by me/promoter for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that

5. That the amounts from the separate account, to cover the cost of the project, shall be withdrawn in proportion to the percentage of completion of the

6. That the amounts from the separate account shall be withdrawn after it is certified by an engineer, an architect, and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the

7. That I / promoter shall get the accounts audited within six months after the end of every financial year by a chartered accountant in practice, and shall produce a statement of accounts duly certified and signed by a such chartered accountant and it shall be verified during the audit that the amounts collected for a particular project have been utilized for the project and the withdrawal has been in compliance with the proportion to the percentage of completion of the

8. That I / promoter shall take all the pending approvals on time, from the competent

9. That I / promoter have/has furnished such other documents as have been prescribed by the rules and regulations made under the

10. That I / promoter shall not discriminate against any allottee at the time of allotment of any apartment, plot, or building, as the case may be, on any

Deponent

Verification

The contents of my above Affidavit cum Declaration are true and correct and nothing material has been concealed by me therefrom.

Verified by me at…………….. on this day of …………………………..

Deponent

 

 

Registration fee: 

• FOR RESIDENTIAL PROJECTS:

 Rs. 10 up to 1000 sq mtr and Rs. 500 per 100 sq mtr or the part where the area of land proposed to be developed exceeds one thousand square meters.

• FOR COMMERCIAL PROJECTS:

 Rs. 20 up to 1000 sq mtr and Rs. 1000 per 100 sq mtr or the part where the area of land proposed to be developed exceeds one thousand square meters.

Approval Time:

Within 30 Days of Application

Compliances After Registration:

The promoter shall upload the following updates on the webpage for the project, within seven days from the expiry of each quarter: 

• List of number and types of apartments or plots, as the case may be booked;

• List of number of garages/closed parking booked;

• Status of the project:

1. Status of construction of each building with photographs;
2. Status of construction of each floor with photographs;
3. Status of construction of internal infrastructure and common areas with photographs.

• Status of approvals:

1. Approval received;
2. Approvals applied and expected date of receipt;
3. Approvals to be applied and date planned for application;
4. Modifications, amendments, or revisions, if any, issued by the competent authority with regard to any license, permit, or approval for the project.

UP RERA website: Click to open

Conclusion

In the end, it all comes down to ensuring that you understand how RERA regulations work and what they mean for your business. We hope this guide has been helpful in giving you an overview of what RERA is and why it’s important for all those involved in real estate in India today.