- By Renowned Real Estate Agent – Utkarsh Bharadwaj
The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry, transparency and make the Real Estate sector more customers friendly. States are to follow suit by notifying their rules based on the central act and many states have already issued notifications.
Developers will need to get all the approvals before launching a project and disclose all the information on the project in the website that the authority will set up.
Coming straight to the point, here are few ways in which buyers are likely to be benefitted by the RERA Act:
- Under RERA, each state will have to setup regulatory bodies as appellate tribunals to solve the disputes between buyer and builder within 120 days.
- Developer will have to put 70% of the money collected from a buyer in a separate account to meet the construction cost of the project.
- RERA will make it mandatory for all commercial and residential real estate projects where the land is over 500 sq. mt. or eight apartments will have to register with the regulator before launching a project.
- RERA also seeks to impose strict regulations on the promoter and ensure that construction is completed on time.
- Carpet area has been clearly defined in the bill to include usable spaces like kitchen and toilets imparting clarity which was not the case earlier.
- A developer’s liability to repair structural defects has been increased to 5 years from the earlier 2 years.
- The buyer will pay only for the carpet area (area within walls). The builder can’t charge for the super built-up area, as is the practice at present.
- Developers will be able to sell projects only after the necessary clearances. Under RERA, builders and agents will have to register themselves with the regulator and get all projects with more than eight apartments registered before launch.
- To enable informed decisions by buyers, Real Estate Regulatory Authorities will ensure publication on their websites information relating to profile and track record of promoters, details of litigations, advertisement and prospectus issued about the project, details of apartments, plots and garages, registered agents and consultants, development plan, financial details of the promoters, status of approvals and projects etc.Once brokers are managed under the RERA regulations, investors’ and home buyers’ trust is likely to increase and this could lead to an increase in sales and revenue for both, brokers and builders.
- Registration fees for RERA:
- RERA for Brokers:
- It will bring a lot of accountability in the industry and the ones who believe in professional and transparent business, will reap all the benefits. Now, the agents will have a much larger and responsible role to perform, as they will have to disclose all the appropriate information to the customer and even help them chose a RERA-compliant developer
- Under the Real Estate (Regulation and Development) Act (RERA), which came into force on May 1, 2017, real estate agents will need to register themselves, to be able to facilitate a transaction.
- Rs 500 to Mahaonline for Maha-Rera website (plus taxes and bank charges, if any).
- Rs 10,000 for individual, proprietor, or proprietorship firm.
- Rs 1,00,000 for partnership firm, society, private Ltd/Ltd company, LLP, etc. Book of records
- The agent shall maintain book of accounts, records and documents, separately for each real estate project.
- Registration time frame: The authorities shall deliver the registration number, along with the certificate, within 30 days from the date of registration.
- Validity of registration/renewal: Valid for five years. Renewal to be done at least 60 days prior to the expiry of the registration.
- Obligation: The registration certificate should be displayed at the place of business.
- All advertisements, marketing, selling or purchase papers, should have the registration number. Penalty on unregistered brokers involved in registered projects
- Rs 10,000 per day during the period of failure and a maximum of up to 5 per cent of the value of the deal or project value.
After getting piles of complaints from buyers about builders denying selling flats due to buyers’ religion, marital status and dietary preferences, Maharashtra Government also incorporated an anti-discriminatory clause under RERA. Also, the Maharashtra government added news rules under RERA such as parking spaces, which can now be sold by builders, to regulate these sales. State government has mandated that builders should disclose the sales of these parking spaces. Prevailing rules grant co-operative housing societies to distribute parking spaces among its members. Overall, the RERA Act adds many other rules which can regulate the real estate sector more comprehensively.