ALL YOU KNOW ABOUT RERA ACT 2016

                      Real Estate (Regulation and Development) Act, 2016 

                                                   why it is needed?

 

1. Real estate sector had been largely unregulated, no standardization of business practices and transactions.

2.  Presence of issues like delays, price, quality of construction. Delays in projects had been a major issue plaguing real estate sector- huge cost overrun due to delays.

3. Various instances where developers cheated property buyers.

4. No grievance redressal mechanism. •Huge generation of black money in

           real estate sector

                                                 Features of 

The Real Estate (Regulation And Development) Act, 2016

 

1. Establish the Real Estate Regulatory Authority (RERA) for regulation and promotion of the real estate sector

2.  Ensure sale of plot, apartment of building or sale of real estate project, in an efficient and transparent manner

3.  Ensure protection the interest of consumers in the real estate sector

4.  Establish an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions

5. Regulates transactions between buyers and promoters of residential real estate projects

6.  Residential real estate projects, with some exceptions, need to be registered with RERAs

7.  Promoters cannot book or offer projects for sale without registering them.

8.  Real estate agents dealing in these projects also need to register with RERAs

9.  Amount collected from buyers for a project must be maintained in a separate bank account and must only be used for construction of that project.

10.  Right to Legal Representation on behalf of client by Company Secretaries or chartered

 accountants or cost accountants or legal practitioners

11.  Imposes stringent penalty on promoter, real estate agent and also prescribes imprisonment.

Advantages of RERA (Real Estate Development and Regulation Act)

 

1. Increased FDI

2.  Customer management

3.  Timely completion of the project

4.  Project planning

5.  Transparency

6.  Reduction in litigation

Important Definitions under the Act

 

●  Allottee –

“Allottee” in relation to a real estate project, means the person to whom a plot, apartment or building, has been allotted, sold (whether as freehold or leasehold) or transferred by the promoter, and includes the person who subsequently acquires the said allotment through sale,transfer or otherwise but does not include a person to whom such plot, apartment or building, as the case may be, is given on rent;

 

●  Apartment –

             

“Apartment” whether called block, chamber, dwelling unit, flat, office, showroom, shop,

godown, premises, suit, tenement, unit or by any other name, means a separate and self contained part of any immovable property, including one or more rooms or enclosed spaces, located on one or more floors or any part thereof, in a building or on a plot of land, used or intended to be used for any residential or commercial use such as residence, office, shop,showroom or godown or for carrying on any business, occupation, profession or trade, or for any other type of use ancillary to the purpose specified;  

 

●  Carpet area –

“Carpet area” means the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment.

 

● Common areas –

a) the entire land for the real estate project or where the project is developed in phases and registration under this Act is sought for a phase, the entire land for that phase;

b) the stair cases, lifts, staircase and lift lobbies, fire escapes, and common entrances and exits of buildings

c) the common basements, terraces, parks, play areas, open parking areas and common storage spaces;

d) the premises for the lodging of persons employed for the management of the property

including accommodation for watch and ward staffs or for the lodging of community service personnel.

e) installations of central services such as electricity, gas, water and sanitation, air-conditioning and incinerating, system for water conservation and renewable energy;

f) the water tanks, sumps, motors, fans, compressors, ducts and all apparatus connected with installations for common use.

g) all community and commercial facilities as provided in the real estate project;

h) all other portion of the project necessary or convenient for its maintenance, safety, etc., and in common use.

 

●  Promoter –

a person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees

OR

a person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon

OR

any development authority or any other public body in respect of allottees of–

a. buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or placed at their disposal by the Government; OR

b. plots owned by such authority or body or placed at their disposal by the Government, for the purpose of selling all or some of the apartments or plots

OR

an apex State level co-operative housing finance society and a primary co-operative housing society which constructs apartments or buildings for its members or in respect of the allottees of such apartments or buildings

OR

any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other name or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale

OR

such other person who constructs any building or apartment for sale to the general public.

 

● Real estate agent –

Real estate agent means any person, who negotiates or acts on behalf of one person in a transaction of transfer of his plot, apartment or building, as the case may be, in a real estate project, by way of sale, with another person or transfer of plot, apartment or building, as the case may be, of any other person to him and receives remuneration or fees or any other charges for his services whether as commission or otherwise and includes a person who introduces, through any medium, prospective buyers and sellers to each other for negotiation for sale or purchase of plot, apartment or building, as the case may be, and includes property dealers, brokers, middlemen by whatever name called

Prior Registration of Real Estate project with

             Real Estate Regulatory Authority

 

● 1)  A promoter shall not –

a) advertise,

b) market,

c) book,

d) sell or offer for sale, or

e) invite persons

to purchase any plot, apartment or building, in any real estate project or part of it, in any

planning area, without registering the real estate project with the Real Estate Regulatory

Authority

● 2) The projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act.

● 3) For projects which are developed beyond the planning area but with the requisite permission of the local authority, it may, by order, direct the promoter of such project to register with the Authority, and the provisions of this Act shall apply to such projects from that stage of registration where the real estate project is to be developed in phases, every such phase shall be considered a stand alone real estate project, and the promoter shall obtain registration under this Act for each phase separately.

 

 

           Projects exempt from the ambit of the Act

 

a) Area of land does not exceed 500 Sq. Meters

b) No. of apartments does not exceed 8

c) In case of renovation, where the area of land proposed to be developed does not exceed five hundred square meters or the number of apartments proposed to be developed does not exceed eight

d) where the promoter has received completion certificate for a real estate project prior to commencement of this Act;

 

 

 

 

 

 

                  Rights and duties of allottees

 

Rights- 

1. Right to obtain information about the project

2. Right to know the stage-wise time schedule of completion of the project  

3. Right to claim possession of property as declared by the promoter  

4. Right to refund and compensation if promoter fails to give the possession

 

Duties-

1. Duty to make payment as agreed.

2. Duty to pay interest in case of late payment

3. Duty to participate towards the formation of an association or society or cooperative society of the allottees  

4. Duty to take physical possession of property within a period of two months of the occupancy certificate

 

 

           The Real Estate Appellate Tribunal (REAT) 

 

 

1. Any party aggrieved by the order of RERA may fiel appeal with REAT.

2. Appeal should be filed within 60 days.  

3. Appeal may be entertained even after 60 days if there is sufficient cause.  

4. Before filing appeal, promoter should first deposit with the REAT at least 30%. of the penalty or the total amount of compensation.  

5. Appeal shall be disposed of by REAT within 60 days.

                                                                                    - SHIVANAND SAVALGIKAR