Registration under RERA Act – Unravel with expert CA in Udaipur

The RERA Act in India, which regulates the real estate industry, is explained by trusted RERA consultants and experienced chartered accountants in Udaipur, who decode this new real estate regulation including registration procedures, fees, penalties, and more.

Introduction

The Real Estate (Regulation and Development) Act of 2016 (RERA) is an Indian law passed by Parliament that aims to protect homebuyers and boost investments in the real estate industry.

It came in force on 1May, 2017.

Sector Covered under the RERA

Real Estate Sector 

Who is authority?

Real Estate Regulatory Authority is the governing authority

Object of RERA

1. Protect interest of home buyers and increase investment and transparency in the real estate sector. Enhance the accountability.
2. Establishment of a fast-track mechanism for settlement of disputes.
3. The registration of a particular project can be rejected by the authority if guidelines have not been adhered to.
4. Enhance the accountability:- If there is any default from the side of the buyer or promoter, both will be liable to pay an equal rate of interest.
5. Establishment of a fast-track mechanism for settlement of disputes
6. TO adjudicate and arbitrate any disputes with respect to real estate projects in the concerned state

Registration under RERA

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 meter so that the authority will have jurisdiction over the projects

Important Points under Real Estate Regulation and Development (RERA)

1. Security: 
2. The RERA act states that at least 70% of the buyer’s and investor’s money will be deposited in a special account.
3. The remaining 70% will then be allocated to the builders for construction and land-related expenses only.
4. Developers and builders are not allowed to claim more than 10% as an advance payment on the property before the sale contract is signed.
5. Transparency:

Builders are required to provide the original plans for all projects they carry out. They are not allowed to alter the plans without the buyer’s permission.

• Fairness:

All the developers sell properties on the basis of carpet area rather than high-density area.

• Consequences of delay in project

 Buyers have the right to recover the full amount of their investment, or they can opt for an investment and receive a monthly return on their investment.

• Solution of Complain :-

The builder must rectify any issue faced by the buyer within 5 years of purchase. This issue must be rectified within 30 days of the complaint.

• Authorisation: 

Regulators are not allowed to market, sell, construct, invest in, or book plots of land without registering with RERA. All advertisement for investments should be made only after registration with the RERA registration number.

• Other features
• Written consent of  two-thirds of the allottee  alongwith the approval of RERA is required if promoter wishes to transfer or assign a majority of  rights and liabilities in a real estate project to a third party
• The promoter will have to compensate to the buyer , if buyer suffered  losses due to the other people have claim over property or the title of the property is defective,  on which construction is going on or proposed to construction. Presently not limit of Compensation is provided in the act. 
• Any person i.e. promoter, buyer, or an agent can file complaint with the RERA in case of problems.
• RERA can stop an agent, promoter, or buyer from continuing any activity against which a complaint has been raised.
• The aggrieved party can submit an appeal before the Appellate Tribunal in case,  if party is not satisfied with the orders of RERA
• Jurisdiction

No civil court will have any jurisdiction with respect to any matter that comes under RERA or the Appellate Tribunal’s jurisdiction. As such, no court can grant an injunction with regards to any action taken by RERA or the Tribunal.

Benefits of RERA

The following are the benefits to the buyer, the promoter and the real estate agent:-

1. To the Buyer
2. a builder cannot take more than 10% of the cost of the project from the buyer as advance or application fees. This saves the buyer from having to source funds fast and having to pay a large amount.
3. the builder has to rectify structural  damages within period of 30 days  of the complaint at no cost to the buyer, with in a period of  the 5 years of the  possession. 
4. Both the parties have to pay the equal interest in case of default while prior to the RERA, low rate of interest was being paid for the delayed period by the promoter.
5. in case of false promises by builder :-  The Buyers have right to recover a full repayment of the amount paid as  an advance . In some cases, the builder may be required to pay interest on that amount.
6. If at the time of possession, the buyer discovers that there is a defect in the title of the property, the buyer can claim compensation from the promoter without any limit
7. The buyer has the right to know all the information about the project. This includes plans related to layout, execution, and completion status.
8. With RERA there is now a standard formula to calculate the  carpet area. This way, promoters cannot provide inflated carpet areas to increase prices

• To the Builder
• The RERA has reduced risk of insolvency of the builder. Promoters and developers generally work on multiple projects simultaneously. Earlier there was diversion of funds from one project to another project. However, under RERA, 70% of the money raised must be deposited in a single bank account. Funds can only be withdrawn after certification by engineers, chartered accountants, and architects.
• the honest promoters / builders / developers will benefit from this  as they will face less competition and Dishonest builders will disappear as they will fail to sustain in the market.

Applicability of the RERA For all private and business ventures

• Apartments – exceeding 8 units in all phases.
• Plot Developments exceeding 500 sq. mtrs.
• Projects developed in Phases would require registration for each phase separately. Commercial projects including shops, offices, showrooms, godowns – exceeding 500 sq. mtrs.
• Residential
• Ongoing Projects which do not have Completion Certificate prior to the commencement of RERA.

Real Estate Projects not covered under RERA

• Projects which have received Completion Certificate prior to the commencement of RERA.
• Redevelopment projects where no new allotments are to be made.
• Renovation/ Repair – Not involving marketing, advertisement, selling or allotment of any apartment, plot or building
• Sale of ready to occupy property in the resale market.

Fine under RERA

1. For Buyers

Non-compliance with RERA	Daily penalty up to 5% of the approximate cost
Non-compliance with the Appellate Tribunal	Imprisonment up to 1 year or 10% of the approximate cost of the project, or both

• For Promoters/Builders

Non-registration	10% of the project’s estimated cost
Giving false information	5% of the project’s estimated cost
Violation of laws	Up to 3 years’ imprisonment or a fine of 10% of the estimated cost of the project or both

• For Agents

Non-registration of projects	Rs.10,000 per day up to 5% of the approximate cost of the project
Non-compliance with RERA	Daily penalty up to 5% of the project’s estimated cost
Non-compliance with the Appellate Tribunal	Imprisonment up to 1 year or 10% of the project’s estimated cost, or both

Penalties applicable under RERA

Under the Real Estate (Regulation and Development) Act, 2016 (RERA), there are certain offenses for which applicable penalties are imposed. Listed below are some of the offenses for which penalty is imposed under the applicable sections:-

Applicable sections	Offences committed	Applicable penalties
Section 9 (7)	Registration secured through misrepresentation or fraudBreach of terms for which registration obtained	Revocation of Agent Registration Number
Section 62	Contravention of Section-9 & Section 10	Penalty of INR 10,000/-day during which the default continues extending up to 5% of cost of unit sold
Section 65	Contravention of orders of RERA authorities	Penalty up to 5% of cost of unit sold
Section 66	Contravention of orders of Appellate tribunal	Imprisonment for up to 1 year or with fine extend up to 10% of cost of unit sold

Procedure for Registration of Project:

Step	Proceedure
	Promoter creates a user id on the Rajasthan RERA web portal (http://rera.rajasthan.gov.in)
	Promoter profile is created and project details (documents, maps, etc.) are uploaded by the applicant.
	Online application for registration is submitted after the prescribed fees is paid online
	As prescribed under Section 5 of The Real Estate (Regulation    and Development) Act, 2016. The Authority grants the registration no. within a period of thirty days from the date of submitting the completed online application. Registration no. is conveyed to the applicant by e-mail and SMS.
	Hard copy of the online application along with promoter and project related documents is submitted to the office of The Registrar, RERA Rajasthan, Nagar Niyojan Bhawan
	After completion of the hard copy, certificate of registration is                      provided

Procedure for Registration of Agent:

Step	Proceedure
	Agent creates a user id on the Rajasthan RERA web portal (http://rera.rajasthan.gov.in)
	Agent profile is created and details are uploaded by the applicant
	Online application for registration is submitted after the prescribed fees are paid online.
	As prescribed under Section 5 of The Real Estate (Regulation and Development) Act, 2016. The Authority grants the registration no. within a period of thirty days from the date of submitting the completed online application. Registration no. is conveyed to the applicant by e-mail and SMS.
	Hard copy of the online application along with relevant documents is submitted to the office of The Registrar, RERA Rajasthan, Nagar Niyojan Bhawan
	After completion of the hard copy, certificate of registration is provided.

Fees: – Every state have different fees schedule for registration under the RERA.

This brief blog post explores RERA, India’s real estate act covering important points and silent features alongwith benefits to the buyers and developers, registration procedures, fees and penalties. Get the details from the top RERA experts and Chartered Accountants in Udaipur.