Complete Guide About RERA Act and What Are The Rules

As of 25th March 2016, the Government of India passed an Act regarding real estate and properties in the country (except J&K). This was the Real Estate (Regulation and Development) Act which established the RERA to manage and supervise all matters with respect to the real estate domain. With the introduction of this Act, individuals buying and selling homes or real estate can follow a more secure, transparent, and supervised process.

So what is the RERA act? This article talks about the provisions, guidelines, registration, and penalties under the RERA act that you must be aware of before you proceed with real estate dealings.

What is The RERA Act?

The RERA full form is the Real Estate Regulatory Authority, and it was brought into the system to eliminate the fraud and inconsistencies that occurred in the real estate sector. It holds owners, builders, contractors, and other involved parties accountable for operations, decisions, and funds in this area. It applies to rooms, apartments, bungalows, shops, and other premises used for residences or commercial operations.

RERA Act and Rules

The RERA meaning when it comes to official binding laws is highlighted through the following few important rules:

What is RERA Registration?

• No vacant land, house, or office space can be declared as “For Sale” until and unless it is registered under RERA for the same.
• Mandatory details that must be declared under RERA include but are not restricted to garage details, updated number of plots, status of ongoing construction, sanctioned layout changes, civic infrastructure like sanitation and electricity, address of plot, and lease certificate.
• Upon RERA registration, the applicant is responsible for the basic maintenance of the space until another individual purchases it.
• No RERA registration is required for land projects that do not exceed 500 sq. metres of area or does not include more than 8 apartments under development.

Features and Benefits Under Real Estate Regulation And Development (RERA)

Let’s take a look at the top 4 benefits that RERA registration offers:

• Since all properties under construction need to be declared with the estimated timeline for completion under RERA, there are slim chances that your project gets delayed, costing you time, money, and resources.
• With the existence of a governing body, all buyers now have a platform to submit their complaints about the real estate or the seller to. Also, these complaints must be addressed within 30 days without overhead charges by the seller.
• Once the documents have been submitted and RERA approval has been received, no changes can be made to the real estate without informing the authorities. This safeguards buyers from the fraud of being charged extra.
• All developers are strictly instructed under RERA to sell properties and apartments according to carpet area alone and not any element of the super built-up area like balconies or elevators.

Documents Required To Register A Project Under RERA

The umbrella questions “What is RERA approval?” and “What is RERA registration?” revolve around the documentation necessities for a project. Here is the list:

• Official documents of name of promoter and owner, identity verification (PAN and Aadhaar cards), address, type of property, and photographs.
• History of properties dealt with whether completed or still under construction.
• Certificates of project completion, approvals, sanctioned plans, layouts, carpet area, etc.
• Proposal on plan of development of water facilities, fire exits, renewable energy ports, etc.
• Names and addresses of all teams working on the real estate like engineers, masons, agents, marketers, and brokers.

Carpet Area Defined Under RERA

The "carpet area" that RERA defines as the total area of the floor within the walls of the property. This excludes open terraces, balconies, lawns, etc., and this number is fixed. Once submitted, any other change (addition or subtraction) to this value must be registered again.

Impact of RERA Act

Because of the RERA Act in real estate, fraud has decreased, more buyers are secure with where their money goes, and disagreements between buyers and sellers get resolved easily. Moreover, illegal property construction has been drastically reduced, and the government has more control over official residential and commercial plots.

How to Ensure That Property Is RERA Compliant?

All real estate dealings that are registered under RERA will be given a unique number that is also put up on the respective state or union territory’s online portal. All details on the property’s compliance can be checked through the official website.

Also, any RERA-compliant space of land will require its owner to be in possession of authorization documents. Also, 70% of the costs under this project must be kept in an account called the Escrow account and not diverted into investment avenues.

Penalties Under RERA

Some of the penalties under RERA include:

• Imprisonment up to 3 years or a fine of up to 10% of real estate’s value in the absence of RERA registration.
• Penalty of up to 5% of the cost of the project if false details are provided.
• Imprisonment up to 1 year or a fine of up to 10% of real estate’s value under non-compliance of Appellate Tribunal.
• Daily penalty of up to 10% of the project’s cost to be borne by the real estate agent if construction and sales is performed without RERA registration.

How to Register Projects Under RERA?

To register your project under RERA, follow these steps:

• Register and initiate a bank account under Section 4(2)(l)(D) of the RERA Act.
• Fill and submit Form A (mandatory) and Form B if you are a promoter or real estate agent.
• Fill Form G as the agreement for the sale.
• Submit all other required official legal documents.
• Pay your state’s fixed RERA fees.
• Prepare affidavits confirming the truthfulness of all the above documents.
• Fill Form C for registration certificate

Conclusion

You can rely on the RERA act if you are looking for just and legal real estate dealings. If you’re interested in purchasing a home for yourself, you can benefit from SMFG Grihashakti’s home loans. Use our online eligibility calculator to know if you qualify for this loan and financially plan according to the online EMI calculator.