RERA

Lesson Outline

  • Key Concepts

    • Agreement for sale

    • Allottee

    • Promoter

    • Carpet area

    • Common areas

    • Planning area

    • Commencement certificate

    • Completion certificate

Learning Objectives

To understand the following aspects of Real Estate Regulation and Development Law:

  • Registration of Real Estate Projects

  • Registration of Real Estate Agents

  • Functions of Real Estate Agents

  • Functions of Promoter

  • Obligation of Promoters

  • Rights of Allottees

  • Establishment of Real Estate Regulatory Authority (RERA)

  • Real Estate Appellate Tribunal

  • Real Estate Project and Registration

  • Functions and Duties of Promoter

  • Duties of Allottees

  • Central Advisory Council

  • Adjudication

  • Offences & Penalties

  • Lesson Round-Up

  • Test Yourself

  • List of Further Readings

  • Other References

Introduction

  • Real estate sector is crucial for addressing housing and infrastructure needs in India, contributing significantly to the economy.

  • The sector has historically been unregulated, leading to issues like lack of professionalism and consumer protection.

  • Other sectors, such as insurance and telecom, have benefitted from the establishment of regulators like SEBI and TRAI.

  • The Consumer Protection Act, 1986, though available, does not completely address concerns related to real estate.

  • To remedy these issues, the Real Estate (Regulation and Development) Act, 2016 was enacted.

  • The Act seeks to protect consumer rights, promote standardization in practices, and balance the interests of consumers and promoters.

Key Features of the Act

  • Real Estate Regulatory Authority (RERA): Establishes a regulatory framework to ensure efficient and transparent sale and development of properties.

  • Consumer Protection: The Act aims to safeguard consumer interests by ensuring projects are registered and structured properly before selling.

  • Mandatory Registration: All real estate projects above a certain size must be registered with RERA, with penalties for non-compliance.

  • Financial Accountability: Funds collected from buyers must be kept in a separate bank account to be used only for construction of the project.

Objectives of the Act

  1. Establishing clarity and regulation in transactions between buyers and promoters.

  2. Speedy dispute resolution regarding real estate transactions.

  3. Creating consumer confidence through accountability of promoters.

  4. Greater transparency in contractual conditions between all parties.

Registration of Real Estate Projects

  • Promoters must register projects before advertising, selling, or offering for purchase.

  • They are required to upload project details, including timelines, financial plans, and adherence to legal requirements.

Registration Process

  1. Application Submission: Must include necessary documentation, including prior approvals and project plans.

  2. Authority Review: Registration must be granted or denied within 30 days of the application, or else it is deemed officially registered.

Advancements of the Act

  • Provides standardized definitions (e.g., "carpet area," "common areas") to prevent exploitation.

  • Obligates promoters to provide accurate advertisements and undertake transparent practices in project execution.

  • Establishes RERA and a Central Advisory Council to oversee and guide regulatory practices.

Promoter Responsibilities

  • Promoters must provide detailed information about the project including approvals, buyer information, and timelines for completion.

  • They cannot modify the project without consent from allottees.

  • Must ensure essential services are maintained until transferred to an association.

Rights and Duties of Allottees

  • Allottees have the right to transparency about project details and timelines.

  • They must fulfill their financial obligations timely, so as to avoid penalties.

  • The Act balances rights and responsibilities of both parties to ensure fairness.

Dispute Resolution Mechanisms

  • Establishes a Real Estate Appellate Tribunal (REAT) for resolving disputes related to RERA orders within 60 days.

  • Provides avenues for appeals to higher courts if dissatisfied with tribunal decisions.

Offences and Penalties

  • Clear penalties are stipulated for non-compliance or fraudulent practices by promoters or agents.

  • Unfair practices lead to serious consequences including possible imprisonment and hefty fines.

Conclusion

  • The RERA framework aims to protect consumers, provide a fair playing field for promoters, and promote transparency in the real estate sector.

Test Yourself

  1. Define the following:

    • Carpet Area

    • Occupancy Certificate

  2. Under what conditions is registration of a real estate project not required?

  3. What happens if the authority does not respond to a registration application within 30 days?