In this article, Aditya Shrivastava, Manager Content Marketing at iPleaders discusses some of the most important compliances and their repercussions of Real Estate Regulation Act, 2016 (RERA).
In the year 2016, real estate developers faced a massive change in the way things were functioning. If you look at any newspaper before 2016, it was possible to find at least one report which would talk about the way the real estate developers have been functioning and their constant failure to keep up with the promises relating to possession of the developed property or amenities or returning a buyer his money in case of cancellation.
With a view to regulating real estate under one regime, and aim to establish the Real Estate Regulatory Authority (RERA) for regulation and promotion of the real estate sector and to ensure the sale of the plot, apartment or building, in an efficient and transparent manner the Real Estate Regulation Act, 2016 was enacted.
The initial aim of the act is to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal in order to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating officer for matters connected therewith or incidental thereto.
What are some of the important definitions under the Real Estate Regulation Act?
RERA is one of its kind attempt to ensure that every ambiguity is taken care of. For the first time, it brought in a number of definitions which the real estate owners were unaware of:
Section 2(f) “Appellate Tribunal” means the Real Estate Appellate Tribunal established under section 43
Section 2(I)”Authority” means the Real Estate Regulatory Authority established under sub-section (1) of section 20;
Section 2 (g) “appropriate Government” means in respect of matters relating to,— (i) the Union territory without Legislature, the Central Government; (ii) the Union territory of Puducherry, the Union Territory Government; (iii) the Union territory of Delhi, the Central Ministry of Urban Development; (iv) the State, the State Government.
What are the main duties or compliances mentioned in the Act for a real estate developer?
The Act has brought in a number of compliances which the real estate developers are required to comply with. Here are the most required compliances along with compliances which a real estate developer cannot ignore:
|Serial Number||Section Number||Compliance/Duty/Right of the Promoter|
|1.||3 – Prior registration of the real estate with the Real Estate Regulatory Authority
59 – Punishment for Non-registration
|2.||4 – Application for registration of real estate projects
60 – Penalty for contravention of Section 4
|3.||11 – Functions and duties of a promoter||
|4.||Obligations of Promoter
12 – Obligations of promoter regarding the veracity of the advertisement or prospectus
13- No deposit or advance to be taken by promoter without first entering into the agreement for sale
14- Adherence to sanctioned plans and project specifications by the promoter
15 – Obligations of a promoter in case of transfer of a real estate project to a third party
16 – Obligations of promoter regarding insurance of real estate project
17 – Transfer of title
|5.||18. Return of Amount and Compensation||
1. On withdrawal, the amount received so far, along with interest in a manner provided by the act.
2. On non-withdrawal, interest for every month.
|6.||Offenses, Penalties & Adjudication
61. The penalty for contravention of other provisions of this Act.
What are the list of documents to be enclosed?
- List of Documents to be enclosed under Section 4.
- a brief details of his enterprise
- a brief detail of the projects launched by him, in the past five years
- an authenticated copy of the approvals and commencement certificate from the competent authority, for each of such phases.
- the sanctioned plan, layout plan and specifications of the proposed project or the phase thereof
- the sanctioned plan, layout plan and specifications of the proposed project or the phase thereof including fire fighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy.
- the location details of the project, with clear demarcation of land dedicated for the project including the latitude and longitude of the end points of the project.
- proforma of the allotment letter, an agreement for sale, and the conveyance deed proposed to be signed with the allottees.
- the number, type and the carpet area of apartments for sale
- the number and areas of a garage for sale in the project
- The names and addresses of his real estate agents, if any
- The names and addresses of the contractors, architect, structural engineer, and other persons concerned with the project.
- A declaration, supported by an affidavit, which shall be signed by the promoter, stating his:
(A) The legal title along with documents validating such authentication
(B) No declaration or details of encumbrances, if any,
(C) time period estimate
(D) 70% amounts deposited by allottees, from time to time be deposited in a separate account to cover the cost of construction/land.
- List of Disclosures to be made under Section 11
- Details of the registration granted by the Authority
- Quarterly up-to-date the list of number and types of apartments or plots, as the case may be booked
- Quarterly up-to-date the list of the number of garages booked
- Quarterly up-to-date the list of approvals taken and the approvals which are pending subsequent to commencement certificate
- Quarterly up-to-date status of the project; and
- Such other information and documents as may be specified by the regulations made by the Authority.
- List of enclosures to be made by the promoter, at the time of booking/issue of allotment letter:
- Sanctioned plans, layout plans, along with specifications, approved by the competent authority, by the display at the site or such other place as may be specified by the regulations made by the Authority
- The stage-wise time schedule of completion of the project, including the provisions for civic infrastructure like water, sanitation, and electricity.
Be it big or small, Real Estate Regulation Act, 2016 has impacted real estate developers across the country. While 15 states have already notified the Act, others are still in the process of doing it. At a very novice stage, even lawyers are struggling very hard to come up with a list of do’s and don’ts. In such a scenario, if you are a property lawyer or a real estate developer, it is important that you gear up for it. Keep a track of all the current affairs or take up courses like these which can help you grow a long way.
It is not that difficult to be in compliance of the laws as long as you know them!