28
Nov2017

RERA- GOVERNING ACT FOR HOME BUYERS

RERA(Real Estate Regulation& Development) Act is an act to establish the real estate regulation authority for regulation and promotion of the real estate sector and to ensure sale of plot, apartment or building, as the case may be, or sale of the real estate project, in an efficient and transparent and to protect the interest of the consumer in the real estate sector and to establish and adjudicating mechanism for speedy redressal dispute and also to establish the Appellate Tribunal to hear the appeals from the decisions, orders or directions from Real Estate Regulatory Authority and the adjudicating officer and for matters connected therewith or incident thereto:

 

There is a specific procedure under Real Estate Regulation Act, 2016 which the developers have to follow before the commencement of any Real Estate project.  

         

          Procedure

  • Prior registration of real estate project with Real Estate Regulatory Authority (sec. 3)

The developer will make application for registration to RERA with in time along with various documents. Promoter/developer can also apply online on RERA portal. -. After receipt of the application RERA shall within 30 working days grants or rejects registration. After registration RERA will provide registration number including Login ID and password for accessing website and fill therein the detail of the project. If RERA rejects the application and send the Show Cause Notice, make representations and rectify defects. Promoter can request for additional 7 days for rectifying the defects.

 

DOCUMENTS REQUIRED TO BE ENCLOSED WITH APPLICATION FOR REGISTRATION.

  1. Brief details of the enterprise.
  2. A brief detail of the project launched by the promoter in the past five years.
  3. An authenticated copy of the approvals and commencement certificate.
  4. The sanctioned plan, layout plan and specifications.
  5. The plan of development works.
  6. The location details of the project.
  7. Proforma of the allotment letter, agreement for sale, and the conveyance deed.
  8. The number, type and the carpet area of apartments for sale.
  9. An affidavit in favor of the Real Estate Regulation Authority

 

No registration is compulsory where the area of land proposed to be developed is not exceed 500 Square Meters or number of apartments proposed to be developed not exceed 8 inclusive of all phases.

 

FEW IMPORTANT ISSUES UNDER RERA

SECTIONS ISSUES
4(2) Make application for registration to RERA along with various documents
4(2)(1)D Keep 70% of the amounts realized from real estate project from allottees, from time to time, deposited in a separate account in scheduled bank and to use the same only for meeting the cost of construction and land cost. Withdrawal from separate account to cover cost of the project shall be in proportion to the percentage of completion of the project after certificate from engineer, an architect and CA in practice to that effect.
· Get utilization of amounts collected for a particular project audited by CA in practice with 6 months after the end of every financial year
7 (1) c Not to be involved in any kind of unfair trade practice or irregularities- violation of this may result in revocation of registration.
· (i) the practice of making any statement, whether orally or in writing or by visible representation which:

(A) falsely represents that the services are of a particular standard or grade; (B) represents that the promoter or himself has approval or affiliation which such promoter or himself does not have;

(C) makes a false or misleading representation concerning the services;

12 Promoter will liable to compensate any person making advance or deposit for any loss sustained by reason of any false statement in any advertisement/ prospectus.
13(1) Not to accept as advance or deposit or application fee more than 10% of cost of apartment , plot or building without first entering into agreement for sale and registering such agreement.
14(1) Proposed project to be developed and completed in accordance with sanctioned plans approved by the competent authorities.
14(2) Not to make any alterations or additions to sactioned plans layout plans and specification other than the minor additions or alterations without previous written consent of atleast two-thirds of allottees other than promoters.
14(3) Liability to rectify structural defect or defect in workmanship within 30 days if brought to notice of promoter by allottee within 5 years from the date of handling over possession. On failure to do so, promoter will be liable to compensate allottee.
15(1) Obligations in case of transfer of real estate project to a third party- No such transfer or assignment without prior written consent of at least two-third allottees except promoter and without prior written approval of RERA
18(1) Return of amount and compensation if promoter fails to give possession and allottee wishes to withdraw. If allottee does not wish to withdraw, then promoter to pay interest at prescribed rate for every month of delay till handing over of possession
18(2) Liability to compensate allottees for loss caused by defective title. Claim for such compensation shall not barred by law of limitation.

 

AFTER EFFECT OF RERA, 2016

Under the RERA, developers have to get all their ongoing, under construction and new projects registered with relevant authorities, thus helping rejuvenate the real estate sector with transparency and accountability.

Overall impact of the RERA will be that for home buyers there is a law which will ensure timely delivery and quality service by the Real Estate Developers.

 

Our Corporate Professional Team is ever willing to provide assistance on any issue concerning GST, Insolvency and Bankruptcy Law, Business Model Advisory in India and Abroad, Customs Law, Corporate & Commercial Advisory, IPRs. Secretarial Compliances, Agreement Drafting & Negotiations etc. you may write us on connect@legallands.com

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