What is RERA?
Under the Real Estate (Regulation & Development) Act (“Act”) the acronym RERA stands for the Real Estate Regulatory Authority. This Act was passed in the year 2016 to address the growing problems in the real estate sector. The Act is set up at the state level, and the State is responsible for enforcing the following:
RERA regulates the sale and purchase of real estate properties through the registration of commercial properties and residential flats and other related approvals.
By registering with the RERA, contracts are made transparent, benefiting all parties to the transaction. The registration also reduces the chances of delays in real estate contracts. The main purpose of registering is to protect the real estate buyer and promote the industry.
What are the requirements and benefits of registering for RERA?
In each state and union territory, a Real Estate Regulatory Authority was established, similar to the Securities Exchange Board of India for capital markets. For this reason, the authority has been told to process applications within sixty days of receiving them, and only if there is a good reason, may request an extension. Its responsibilities include protecting stakeholders' rights, collecting data in a specified repository, and establishing a grievance redressal mechanism. The Real Estate Appellate Authority will hear appeals as well.
Under the central legislation, any real estate project (where the total area to be developed exceeds five hundred sq meters or more than 8 units are scheduled to be created in any phase) must be registered with the RERA in its respective state. A completion certificate or occupancy certificate must also be obtained for existing projects that do not meet the registration criteria. When registering a project, promoters must provide specific information regarding the project, such as the location, data about the promoters, approvals, and a timetable for completion. Construction clearances and registration are required before a project is marketed. One of the most common causes of project delays was that monies obtained from one project were invariably redirected to fund new, unrelated ventures. As of now, Promoters are asked to store seventy % of all project receivables in a separate reserve account to prevent such a diversion. The money that such an account has should be firstly certified by some professional. Also, it should be used for land and construction costs only.
- Following the Act's adoption, house buyers will be able to track the status of their project on the RERA website, since promoters will be compelled to make periodic filings to the regulator regarding the project's development.
- Promoters are now required to provide a positive warranty on his right title and interest in the land, which can be used against him later by the home buyer if a title fault is detected. Upon signing the sale agreement, the allottee will also receive the proceeds of the insurance on the title and construction of the project.
- The Act mandates that promoters and homebuyers enter upon a common model sale agreement. Typically, promoters use punitive clauses against property purchasers that penalize them for any default, while the promoter faces little or no punishment for similar failures. Such penalty clauses will be out of date very soon. Therefore, In the future house purchasers should look forward to more balanced agreements.
- To ensure that violations of the Act are not taken lightly, violators are subject to a high monetary penalty (up to 10% of the project cost) as well as imprisonment.
What is the process to apply for the registration of RERA?
This is a state-based process, and as such the registration process varies from state to state. Registration is done online, and the application must be filed on the official website of the state in which registration is required.
To register for RERA in a particular state, the Promote or Agent must submit the above-mentioned documents and fees.
It is also provided that, before rejecting the application, the applicants have the right to be heard before the state authority grants the RERA registration for the state. However, if there are any discrepancies, the state authority may reject the application.
RERA registration number and certificate shall be issued by the authorities within 30 days from the date of registration. However, if the applicant doesn't receive any response from the authority, consider the application accepted.
- RERA Registration Form Filling
The applicant must submit an application to the authority in the appropriate form (which varies by state) along with the required facts and documents.
//rera.(Respective state).gov. in is the website for RERA registration.
- Documents Required for Submission
Documents such as the application form as well as the documentation needed should be submitted. Following the submission of the documents, the applicant must pay the fees in one of the following ways:
1. Request a draught or,
2. A banker's check is drawn on any designated bank or,
3. The schedule accounts for online payments to the real estate regulatory authority.
- The Authority's Acceptance Or Rejection
Within 30 days of receiving the application form, the authority will either accept or reject it. If no response is received, it will be assumed that the authority has accepted the proposal.
- Certificate Of Registration Issuance
The promoter or agent will receive a registration certificate