RERA & Its Registration

This article on RERA ( Real Estate Regulatory Authority) and its complete guidance on registration of RERA is written by Pradyumn Keshari student of SYLLB from Jitendra Chauhan  College of Law, Mumbai University under the guidance of Renowned Advocate Anoop Kumar Vishwakarma , M.Com ,LLB . This article acts as a comprehensive guide to register under RERA.

Introduction

The Real Estate (Regulation and Development) Act, commonly known as RERA, was enacted in 2016 to bring much-needed transparency, accountability, and efficiency to the Indian real estate sector. Prior to its implementation, homebuyers often faced issues like project delays, hidden charges, and lack of proper legal recourse. RERA emerged as a game-changer by establishing a regulatory framework to protect the interests of buyers, promote fair practices, and ensure timely delivery of real estate projects. One of the key pillars of this Act is the mandatory registration of real estate projects and agents with the respective State RERA authorities. This process not only builds trust among buyers but also holds developers accountable to their commitments. In this article, we explore the objectives of RERA, its impact on the real estate landscape, and the step-by-step procedure for project registration under the Act.

Scope and applicability of the Real Estate (Regulation and Development) Act, 2016

The Real Estate (Regulation and Development) Act 2016, hereinbelow referred to as the 'Act' applies to the whole of India except Jammu and Kashmir. Provisions of the RERA Act apply to residential apartments, buildings and plots whether residential or commercial. The Real Estate Project defined in the Act includes the development of buildings consisting of apartments, converting existing buildings into apartments and developing land into plots for the sale of all or some of the said apartments to carry out the purpose of this Act. Under RERA Act, it is mandatory to register all projects of more than five hundred square metres. The main aspects covered by the RERA Act include all project-related information, contract documents for buying and selling properties, carpet area stipulation, limitation of an advance fee to ten per cent of the apartment a deposit of seventy per cent of the money collected from the buyers in the escrow account, timely completion of the project and penal provisions.

Hence, it is imperative to note that the RERA Act is one such comprehensive Act which covers all the projects mentioned above irrespective of whether it is commercial or residential.

Need for the Real Estate (Regulation and Development) Act, 2016

1. To control and regulate the real estate sectors by shutting out malpractices;
2. To keep consumers out of perils such as delayed delivery, transfer of title of the property, the quality of amenities provided and necessary changes to be made etc., before purchase;
3. To appoint authorities to manage the real estate sector and to establish an Appellate Tribunal for each State. To enable home buyers to file complaints in case of any wrongdoing committed by the builders or developers;
4. To contribute a good percentage to India's GDP;
5. To create accountability and responsibility for the authorities so appointed;
6. To tighten the security on the use of investments done by the home buyers or investors;
7. To have a supreme authorisation on the registration for the projects required to be registered; and
8. To maintain quality in delivering the project to the buyers as per their interest and give scope for complaints to the authorities in case of any structural defects.

Salient features of the Real Estate (Regulation and Development) Act, 2016

1. To regulate and promote the real estate sector by establishing the Real Estate
   Regulatory Authority.
2. To carry out the sale of plots, buildings or apartments as the case may be, or the sale of all the real estate projects transparently and efficiently.
3. To protect the interests of the consumers and buyers and ensure the prevention of malpractices against them.
4. To establish adequate and speedy dispute redressal systems and also establish Appellate Tribunals to hear and adjudge appeals from the orders, directions or decisions of the Real Estate Regulatory Authority.
5. Establishes state-level regulatory authorities called RERA.
6. To work on residential real estate projects and register all the projects that are to be undertaken without which the promoters cannot promote or sell.
7. To cast duties on the promoters to upload details of the project on the website including layout and site plans.
8. To ensure that two-thirds of the allottees give their written consent in addition to RERA's written approval when a promoter has to transfer or assign a majority of the rights and responsibilities in a real estate project to a third party.
9. To ensure that the buyer or promoter, as the case may be, pays an equal sum in the event of any default.
10. Where the promoter causes the buyer any loss as a result of other people claiming property (defective title of property) that has been built or is being built,
11. To ensure that the money collected from project buyers must be kept in a separate bank account and utilised solely for the construction of the project. This sum is subject to change by the State Government.
12. The Act provides the right to legal representation on behalf of the client by a CA, CS or CMA or legal practitioners
13. It imposes a stringent penalty on promoters, and real estate agents and also prescribes imprisonment.

Application for registration of real estate projects (Section 4)

Every promoter must submit an application to the Authority for registration of the real estate project in the form, manner, and time stipulated by the regulation of the Authority along with the fee specified by the Authority.

Step 1: An application has to be filed along with the fee and other documents in the prescribed form for registration with RERA by the applicants.

Step 2: The approval or rejection of the application for registration shall be done within thirty days from the date of receiving the application by the Authority.

Step 3: The promoter of the project shall be provided with a registration number, user ID for login and password for the applicant on successful registration.

Granting of registration by the authority (Section 5) 

1. The authority, shall within thirty days from the date of receipt of the application -
2. Grant registration of the real estate project subject to the provisions of the Act and issue the applicant a registration number, as well as a Login Id and password, to enable him to access the website of the Authority and create his web page to fill in the details of the proposed project; or
3. Reject the registration by rejecting the application if it does not conform to the provisions of the Act and record reasons in writing.

Provided applications cannot be rejected without giving an opportunity of being heard to the applicant.

1. As per sub-section (1), if the authority does not register the project within thirty days, then the project is deemed to be registered and the promoter shall be given the user ID for login and password for accessing the RERA website and to create his website for uploading the details of the proposed project.
2. The registration so granted under this section is valid for the time specified by the promoter in section 4 under sub-clause (c) for the completion of the project.

Registration of real estate agents (Section 9)

Real estate broking is one of the easiest businesses in India as there are no specific qualifications or experience requirements. Before the onset of RERA, there was no code of practice that set accountability, transparency and professional benchmarks.

As we see, in many parts of the country, many non-professional agents or brokers operate without a sense of accountability. Thus, the RERA Act also covers agents who have to mandatorily register under Section 9, without which a real estate agent or broker cannot facilitate the sale or purchase of any building, plot, or apartment as part of a registered real estate project sold by the promoter in any of the planning areas. Every real estate agent willing to act as one shall apply to the Authority within a prescribed time and in such form and such fee as to be prescribed. The Authority, once satisfied that the provisions of the Act in relation to the agent's registration shall -

1. provide the real estate agent with a single registration number,
2. reject the application in case it does not conform with the provisions of the Act or the rules thereunder with reasons recorded in writing.

Provided that no application shall be denied until the applicant has been allowed to be heard on the issue. The applicant shall be given a reasonable opportunity of being heard in the matter, without which the application cannot be rejected.

Promoter (Section 12)

No deposit or advance is to be taken by the promoter without first entering into the agreement for sale (Section 13) - A promoter may not accept an advance payment or application fee from a person over ten per cent of the cost of the apartment, plot, or building without first entering into an agreement for sale and registering it.

Structural defect - In case of any structural defect, workmanship defect, quality of delivery, or any provision related to service, or any duty of the promoter, as the case may be, under the agreement for the sale relating to such development, must be brought to the notice of the promoter within five years of the date of handing over possession by the allottee. The promoter is required to rectify such deficiencies without charge within thirty days and in the event of the promoter failing to do so within that period, the aggrieved allottees are entitled to receive suitable compensation in the manner stipulated under the Act.

Obligations of the promoter in case of transfer of a real estate project to a third party (Section 15) - The promoter may not transfer or assign his majority rights and liabilities in a real estate project to a third party without the prior written consent of two-thirds of allottees, excluding the promoter, and without the Authority's prior written approval: Provided that such transfer or assignment shall not affect the erstwhile promoter's allotment or sale of apartments, plots, or buildings in the real estate project.

Obligations of promoter regarding the insurance of real estate project (Section 16) - The promoter shall secure all insurances that may be required by the competent government, including but not limited to insurance in respect of -

• Title to the land and buildings that are part of the real estate project; and
• Real estate project construction.

Transfer of title (Section 17) - In a real estate project, the promoter shall execute a registered conveyance deed in favour of the allottee and hand over the physical possession of the plot, apartment, or building, as the case may be, to the allottees, as well as the undivided proportionate title in the common areas to the association of the allottees or the competent authority, as the case may be and hand over the common areas to the association of the allottees or the competent authority. The promoter is bound to comply with the direction of the competent authority, as the case may be, under this provision within three months from the date of issuance of the occupation certificate.

After obtaining the said occupation certificate and transferring physical possession to the allottees, the promoter is entrusted with the duty to hand over the necessary plans and documents including common areas to the allottees' association or the competent authority as applicable in accordance with the local laws. Where there are no local laws in place, the promoter shall, within thirty days of receiving the completion certificate, hand over all essential documentation and plans including common areas, to the allottees' association or the appropriate government, as the case may be.

Return of amount and compensation (Section 18)

If the promoter fails to complete or is unable to give possession of an apartment, plot, or building:

1. In accordance with the terms of the agreement for sale or by the date specified therein; and
2. Due to discontinuance of his business as a developer due to suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the allottees, in case the allottee wishes to withdraw.

He shall be liable to the allottees on-demand, without prejudice to any other remedy available, to refund the amount received by him in respect of that plot, apartment, building or structure, as the case may be, with interest at such rates and compensation as may be prescribed under this Act.

RERA Registration - Benefits, Documents, Procedure 

RERA (Real Estate Regulatory Authority) registration has become a vital aspect of the real estate sector in many countries, including India. It was introduced to address the long-standing issues and challenges homebuyers and investors face in the real estate market. RERA aims to bring transparency, accountability, and efficiency to the real estate industry, protecting buyers' interests and promoting fair practices. This article will delve into the benefits of RERA registration, the essential documents required, and the step-by-step procedure to obtain RERA Registration 

RERA Registration

RERA Registration is a mandatory registration governed by the Real estate (Regulation & Development) Act. RERA, which stands for Real Estate Regulatory Authority, was established to address the existing issues in the real estate sector. RERA registration is compulsory before advertising, marketing, booking, selling, offering for sale, or inviting individuals to invest in any plot or building. This registration aims to fulfill the following responsibilities:

Ensuring transparency

Promoting accountability by minimizing the risk of fraud

Safeguarding the interests of both the promoter and the purchaser

The RERA Act is enforced at the state level, and the authorities responsible for its implementation oversee the following:

.Registration and necessary approvals for commercial properties and residential flats under RERA

Regulation of sale and purchase transactions involving real estate properties.

Role and RERA Registration Requirements of Real Estate Agents   

A "real estate agent" is an individual who represents and assists others in real estate transactions, earning fees for their services. Real estate agents include property dealers, brokers, and middlemen. Their primary tasks involve facilitating introductions and negotiating deals for the lease or sale of plots, land, buildings, and apartments. In India, the Real Estate Regulatory Authority (RERA) Act mandates that all agents must acquire Rera registration .

Applicability of RERA registration

Applicability for RERA registration is as follows:

Promoters, projects, and real estate agents are subject to RERA registration.

Commercial, residential, and plotted developments fall under the purview of RERA.

Any builder intending to develop a commercial or residential property on land measuring more than 500 square meters or with the number of proposed apartments exceeding eight must obtain RERA registration.

Agents involved in selling and purchasing properties are required to obtain the RERA registration certificate.

RERA registration is required for real estate projects where the total development area exceeds 500 square meters or the number of apartments exceeds eight, including all phases.

RERA registration is mandatory for real estate agents selling or transferring plots, apartments, or buildings in RERA-registered projects.

Individuals or entities engaged in advertising, marketing, booking, selling, or inviting individuals to purchase plots, apartments, or buildings covered under the RERA Act must have RERA registration.

The RERA registration certificate remains valid throughout the state.

The applicability of RERA extends to all parties involved in the transaction.

The checklist also includes the types of properties and their respective area considerations.

Advantages of RERA Registration for Real Estate Agents

Obtaining RERA registration offers several benefits for real estate agents under the RERA Act. RERA registration is mandatory for agents dealing with real estate projects that require RERA registration. Here are the advantages of having RERA registration:

Legally Authorized: RERA registration grants legal authorization to advertise, market, book, sell, offer for sale, or invite individuals to purchase plots, apartments, or buildings covered under the RERA Act.

Enhanced Credibility: RERA registration enhances the credibility of real estate agents among prospective buyers and sellers. It signifies compliance with regulatory standards, instilling confidence and trust in the agent's professionalism.

Consumer Protection: RERA registration ensures consumer protection by promoting transparency and accountability in real estate transactions. It establishes a framework for fair practices, preventing fraudulent activities and providing recourse for grievances.

Access to RERA Projects: Only registered agents can deal with real estate projects registered under RERA. Agents gain access to a broader range of projects by obtaining RERA registration, expanding their business opportunities.

Compliance with Regulations: RERA registration ensures adherence to the regulations set forth by the Act. Agents can stay updated with the latest rules and obligations, minimizing non-compliance risk and associated penalties.

Professional Recognition: RERA registration reflects professionalism and dedication to the real estate industry. It distinguishes registered agents from unregistered ones, boosting their reputation and standing in the market.

RERA registration is crucial for real estate agents as it fulfills legal obligations and establishes industry trust, credibility, and professionalism.

Validity of RERA Registration

The registration of a real estate agent remains valid for five years unless it is revoked before the expiry date. During this period, the registered agent must maintain proper books of accounts, records, and financial accounts per the regulatory requirements. These measures ensure transparency and accountability in the agent's business operations.

Renewal of License

Under the provisions of the Act, a real estate agent's registration can be renewed upon submission of an application by the agent. This renewal process allows the registered agent to extend their license beyond the initial registration period.

Documents required for RERA Registration

The documents required for RERA registration depend on whether it is for a promoter or a real estate agent. Here is a list of the documents required for RERA registration:

Documents required for Promoter Registration:

Identification and address proof of the promoter

Photographs

PAN Number

Email id

Commencement Certificate along with the Sanction Plan

Layout Plan

Location details of the project

The proposed course of action for the project's execution, Availability of parking spaces within the real estate project, Legal documentation confirming the promoter's ownership of the land where the project is planned, Details of any previous project experience of the promoter, including project name, status, and any instances of delays in completion.

Additional Documents Required for Promoters who are Companies:

Certificate of Incorporation.

CIN / TAN number.

Memorandum of Association and Articles of Association.

The audited balance sheet of the preceding three financial years and the Audited report and director's report.

Particulars of directors or any other authorized person

Documents required for Real Estate Agent Registration:

Identification and address proof of the applicant.

Photographs.

Particulars of the real estate agent company, including its name, registered address, bylaws, MOA , Articles of Association (AOA), and type of company.

Please note that these are general requirements, and specific state regulations may require additional documents for RERA registration.

Procedure to Obtain RERA Registration

 The procedure to obtain RERA registration may vary from state to state. Generally, the process involves the following steps:

Filing the RERA Registration Form: The applicant must apply the prescribed form (which varies by state) to the respective state authority. The application should include all the required details and documents.

Submission of Requisite Documents: The applicant must submit the completed application form and the necessary documents.

The applicable fees can be paid through a demand draft, a banker's cheque drawn on a scheduled bank, or online payment as specified by the real estate regulatory authority.

Verification by the Authority: The authority will review the application and accept or reject it within 30 days of receipt. If no response is received within this period, it will be considered acceptance by the authority.

Issuance of Registration Certificate: Upon acceptance, the authority will issue a registration certificate to the promoter or the real estate agent. This certificate confirms their registration under RERA.

It is important to note that the specific process and requirements may differ among states. Applicants are advised to refer to the official website of their respective state's RERA authority for detailed information and guidelines regarding the registration procedure.

What Penalties are Applicable under the RERA Act?

Under the RERA Act, the following penalties are applicable:

Penalties for Default by Agent: If a real estate agent fails to comply with any provision of the Act, they may be liable to pay a fine of Rs 10,000 per day, which can extend up to 5% of the cost of the plot, apartment, or building.

Punishment for Unfair Trade Practices: If an agent engages in unfair trade practices, they may be imprisoned for up to 1 year.

Which RERA Projects are Not Required to be Registered under the RERA Act?

The following type of projects are not required to be registered under the RERA Act:

Projects with Land Area and Apartment Limit: Projects with land areas not exceeding 500 square meters or apartments not exceeding eight.

Projects Involving Renovation, Repair, or Re-development: Projects limited to renovation, repair, or re-development, provided that they do not involve marketing, advertising, selling, or new allotment of any apartment, plot, or building.

Projects with Completion Certificate: Projects for which the promoter has obtained a completion certificate before the commencement of the RERA Act.

Please note that these exemptions may vary in different states, as each state may have specific rules and regulations regarding the projects exempted from RERA registration.