Real Estate (Regulation and Development) Act, 2016 (RERA)

• What is RERA: -

RERA stands for Real Estate (Regulation and Development) Act, 2016 t. The parliament of India passed this Act. This Act protects the interest of home buyers. With the help of this Act, buyers will get the complete right to learn every detail of the projects. Government aimed at the buyers while implementing this Act.
Before this Act, the builders were at the dominant position as they had all the powers over your property, they used to prelaunch the project, delay in handing over the possession, they used to alter the project in midway, etc.
After this Act, the developer/builder has to first get registered in the authority as per law and also comply with all the requisites required and get the approval and NOC for the project. It is thereafter that they will be allowed to advertised and sell the proposed property.

Let us understand the concepts of RERA as under: -

1. Pre-Approval of project by RERA.

1. Firstly, real estate projects need to be registered with RERA. Upon the approval from the authority the developer can launch the project.
2. In absence of this, the builder/developer would not be allowed to launch the project. The regulator would have the jurisdiction over the projects in order to protect interests of Buyers.

1. Establishment of a Regulatory Authority.

1. The absence of a proper regulator has affected the real estate industry. This authority, gathers data at a deputed place and also creates a strong grievance redressal system.
2. This authority protects the interest of the stakeholders to meet the ultimate object of this act.

C. Reserve Amount for the Project.

1. The developer/builder will have to maintain a separate account (i.e., Escrow Account) for the project, wherein only 70% of the amount is to be used for the land and construction.
2. As the lack of amount might lead to delay in project, it is mandatory for the builder/developer to maintain a proper account/money consideration to avoid penalty and also to complete the project within time.

1. Fines on builder, buyers, channel partner for default in delivery, payment and misinformation.

1. Any builder/developer on committing any default with respect to delivery, misinformation, etc is liable for the fine under the Act. So, the buyer has to pay the dues of the purchase of the allotted property on time/as per the consideration. If builder or developer fails to obey the RERA orders, they are liable to pay a huge penalty.

1. Sale Agreement.

1. A standard model sale agreement is always to be followed between the buyer and the promoter. Moreover, the agreement must be balanced. Every consideration to be acknowledged by both the parties so as to be on safer side.

How it would Benefit Buyer’s and other’s?

1. The builder/developer will have to calculate the carpet area with a standard formula. Promoters would not be allowed to provide inflated prices.
2. Due to provision of reserve money the risk of builder insolvency would be reduced as the builder to maintain a separate account where 70% of the amount received must be kept/reserved.
3. The buyer and seller are required to pay the same interest amount for the property.
4. Within 5 years of handing over possession, if there is any structural defect in the building/allotted unit the builder will have to rectify it without charging any money. Also, buyers can claim compensation from the builder if any defect in the property is found.
5. Builder would not be able to take over 10% of the cost of the project, which includes the cost of land and construction.
6. Investment of buyers are safer in RERA as 70% of the receipts are required to be deposited by the promoter in the designated account from which he can withdraw only on the basis of completion of the project, which shall be certified by an engineer, architect and a chartered accountant. This has reduced the chances of funds being diverted y the promoters to ither projects.

How to file complaint under RERA.
Any dispute/cancellation of purchase/ refund of the amount, due to inconsistencies by the builder, the buyer can raise/ file a complaint under RERA. Many of us know that RERA is there to protect the buyer but only few know how to file a complaint.
A complaint can be filed under section 31 of RERA either with Real Estate Regulatory Authority or the adjudicating officer. The complaint can be against promoters allottees and/or real estate agents. Many State Governments have laid out procedures for filing applications under RERA. A complain must be in prescribed for laid by the State Government rules.
If a buyer’s rights are violated or any provision is contravened then you can file a complain under RERA and also in the format laid by the State Government. The fees may vary from the State to State. You need to visit the online portal for the same.
*As RERA is consumer friendly buyers can choose to file a case under RERA. As it deals with Real Estate matters only, and they are very much competent to understand the matter, the same also helps for the matter to get resolved fast. Also, there is time bar under limitations act to file compliant.
In the case filed by M/S Imperia Structures Ltd, the Supreme Court said home buyers can approach consumer court as well as RERA if Real Estate projects delayed.

Conclusion: -

1. Whether it indeed protects the interest of the home-buyers?

Yes, this act came as a huge relief to all the home-buyers as it’s only work is to protect the interest of the home-buyers.

1. Statistics

As per the data available online and all the cases filed under RERA are resolved at the earliest and also refer *.

1. Suggestions

I’ll suggest every home-buyers to approach RERA rather than going to NCLT and other Consumer Forum for any dispute resolvent.

Author Name: Sudhanshu Rotkar