What is RERA Act? RERA Rules, Registration All In One Place

The Real Estate Regulation and Development Act, 2016 (RERA) is a significant legislative reform that aims to bring transparency, accountability, and efficiency to the real estate sector in India. It intends to protect the interests of homebuyers and promote fair practices in the industry.

What is RERA Act? What are RERA rules? How to register? If you are also wondering about the same questions, we have got your covered. This article provides a comprehensive understanding of the RERA Act, its regulations, and the registration process, encompassing all the essential information you need to know.

Latest Updates on RERA (State specific)

The Uttar Pradesh Real Estate Regulatory Authority (UPRERA) has issued recovery certificates worth Rs 3,105 crore in favour of 8,575 home buyers.

The Telangana Real Estate Regulatory Authority (TSRERA) has commenced virtual hearings for complaints which are expected to reduce the time and cost of resolving complaints. In addition, the authority has also introduced a certification exam for real estate agents in Telangana. This exam is mandatory for all real estate agents who want to register with RERA.

The Karnataka Real Estate Regulatory Authority (KARRERA) has introduced a new system for tracking the progress of real estate projects.

RERA Rules - Key Provisions Under RERA Act

The RERA Act, short for Real Estate Regulation and Development Act, 2016, was introduced to address the challenges faced by homebuyers due to the unregulated nature of the real estate industry.

Establishment of State Real Estate Regulatory Authority (RERA): Under the RERA Act, every state is required to establish a Real Estate Regulatory Authority (RERA) to monitor real estate projects and handle consumer grievances. These authorities act as a overseer, safeguarding the interests of homebuyers and ensuring that developers adhere to the provisions of the Act, bringing much-needed transparency and accountability to the real estate market.

Mandatory Registration of Projects and Agents: This key provision ensures promoters of real estate projects with an area over a specified threshold register their projects with the respective state's RERA authority before advertising, selling, or initiating any construction work.

Similarly, real estate agents who facilitate the sale or purchase of properties must also register themselves with RERA. This registration process ensures that the projects are legitimate and have obtained all the necessary approvals and permissions from the relevant authorities.

Timely Completion and Possession: The Act also lays down guidelines for the timely completion of projects and delivery of possession to buyers within the agreed-upon time frame. Developers must provide an estimated completion date at the time of registration and are obligated to adhere to it.

If there are any delays, the promoter is liable to compensate the buyers for the delay period. This provision aims to alleviate the concerns of homebuyers who often face delays in possession of their properties.

Transparency and Accountability: RERA aims to bring transparency and accountability in the real estate sector by promoting fair practices, preventing fraudulent activities, and ensuring timely disclosures.

Pricing transparency is another crucial aspect addressed by the RERA Act. Developers must disclose the carpet area, the number of units, and the price per unit in their advertisements and prospectus. This ensures that homebuyers have complete information about the property they are interested in, enabling them to make informed decisions.

Deposit of Funds in Escrow Account: The RERA Act emphasizes the proper utilization of funds collected from homebuyers. Developers must deposit a certain percentage of the project funds in a designated escrow account. These funds can only be used for construction and land-related expenses, ensuring that the money invested by buyers is not misused.

This measure prevents the diversion of funds and ensures that the money collected from buyers is utilized for the specific project it was intended for.

Disclosure of Project Details: Promoters must provide comprehensive information about their projects, including project details, land title status, layout plan, schedule of completion, etc., on the RERA website. This ensures transparency and helps buyers make informed decisions.

Restriction on Project Changes: Promoters can only make significant changes to the project plan, design, or specifications with the prior consent of two-thirds of the allottees (buyers). This prevents arbitrary changes and protects the interests of buyers.

Warranty and Structural Defects Liability: Promoters are liable to rectify any structural defects or quality issues in the project within a specified period after possession. They are also responsible for addressing any other deficiencies mentioned in the agreement.

Establishment of Appellate Tribunals: RERA establishes Real Estate Appellate Tribunals to adjudicate disputes and appeals. These tribunals provide a quick and efficient resolution mechanism for grievances related to real estate projects.

Compensation for Non-Compliance: In case of any non-compliance by promoters, allottees have the right to claim compensation or seek appropriate remedies through RERA authorities or the Appellate Tribunals.

Developers who fail to register their projects or violate any of the Act's provisions can face hefty fines and even imprisonment. This acts as a deterrent and encourages developers to adhere to the regulations set forth by the Act.

Please note that the specific provisions of RERA may vary across different states and union territories in India, as the Act allows for certain state-level modifications and rules. It is advisable to refer to the RERA rules and regulations of the respective state for precise details.

Exploring the Benefits of the RERA Act

The RERA Act brought about significant changes in the real estate sector in India. Let's delve deeper into the benefits the RERA Act offers homebuyers and developers.

For homebuyers, the RERA Act ensures that their rights are safeguarded and that they receive their dream homes as promised by the developers. One of the key benefits for homebuyers is that the Act mandates that developers must register their projects with the respective state's Real Estate Regulatory Authority (RERA) before advertising or selling any units. This will ensure that the project details, such as the timeline, specifications, and pricing, are disclosed upfront to the homebuyers.

Additionally, the RERA Act imposes strict guidelines on developers to complete their projects within the promised timelines. This provision protects homebuyers from delays and ensures their investments are not indefinitely stuck. This provision prevents developers from delaying projects and encourages them to complete projects on time.

Moreover, the RERA Act establishes a grievance redressal mechanism for homebuyers. It sets up Real Estate Regulatory Authorities in each state, which act as quasi-judicial bodies to resolve disputes between homebuyers and developers. It ensures that their concerns are heard and addressed in a fair and timely manner, thereby enhancing consumer confidence in the real estate sector.

Furthermore, the RERA Act promotes fair competition among developers. It establishes a level playing field by ensuring all developers adhere to the same rules and regulations. This prevents unscrupulous developers from engaging in unfair practices and ensures that genuine developers who follow ethical business practices thrive in the industry. The Act also prohibits developers from making false claims or misleading advertisements, protecting homebuyers from falling prey to fraudulent schemes.

What RERA Act Means for Real Estate Developers

Real estate developers need to comply with the provisions of the RERA Act to ensure legal and transparent operations. The Act emphasizes the timely completion of projects and mandates the disclosure of accurate project details, including the layout plan, specifications, schedule of implementation, and possession date.

Moreover, developers also benefit from the implementation of the RERA Act. The Act has introduced a mandatory registration process for developers, which enhances their credibility and establishes their commitment to delivering projects as promised. This transparency boosts the confidence of homebuyers in the developer's capabilities and encourages them to invest in their projects.

Developers must also maintain a separate escrow account for each project, where the funds collected from homebuyers would be deposited. This enhances financial discipline and ensures that the funds are utilized only for the specific project. Failure to comply with the RERA Act can lead to penalties, including imprisonment.

How RERA Act Protects Homebuyers

The RERA Act provides several safeguards for homebuyers.

The RERA Act protects homebuyers by making developers accountable for their commitments. It ensures that developers are held responsible for any delays in project completion and provides safeguards against unfair practices and fraudulent activities. This will help to protect homebuyers from losing their hard-earned money.

Builders are required to disclose all project information on the RERA website, including the project plan, timeline, and financial details. This gives homebuyers a clear understanding of the project before they invest.

Builders are required to deposit 70% of the money collected from homebuyers in a separate bank account. This money can only be used for construction purposes, which ensures that the project is completed on time.

Homebuyers have the right to file complaints against builders with the RERA if unsatisfied with the project. The RERA will investigate the complaint and take appropriate action. Homebuyers will have a faster and more efficient way to resolve disputes with builders. This will help to protect their interests and ensure that they get justice.

The RERA is a positive step for the Indian real estate market. It will help to protect homebuyers and make the market more transparent and efficient.

Builders have to complete the project within the stipulated time period. If they fail, they will have to pay interest to the homebuyers.

Homebuyers have the right to register complaints against builders with the RERA. The RERA will investigate the complaint and take appropriate action.

Under the Act, developers must obtain all necessary approvals before starting a project and cannot make any changes to the project without the consent of the homebuyers. They are also required to compensate homebuyers for any loss caused due to false advertising or misleading information.

RERA Registration Process for Developers

The RERA registration process can seem complex, given the requirements and paperwork involved. RERA Registration is a mandatory requirement for all real estate projects in India.

The RERA registration process is as follows:

Visit the official website of the RERA authority in your state.
Click on the "Registration" tab.
Select the "Projects (Application by Promoter)" option.
Create an account and log in.
Fill out the application form and upload the required documents.
Pay the RERA registration fee.
Your application will be processed, and you will be issued a RERA registration number.

For developers, RERA registration is mandatory for selling properties in most states. Developers need to provide detailed information about the project, including the land title, layout plan, estimated project cost, and timeline for completion.

Documents Required for RERA Registration (Developers)

The documents required for RERA registration vary from state to state. However, some of the common documents that are required across all states include:

PAN Card and Aadhar Card of the promoter
The balance sheet of the promoter broker for the previous financial year
Last three years' Income Tax Returns (ITR)
Project Plan copy
Number of parking areas in the project
The title deed of the promoter or land
Encumbrance Certificate of the project or land on which the project is built
Commencement Certificate of the project
Zoning certificate of the land
Fire safety certificate
NOC from the local authority
NOC from the pollution control board
Self-declaration stating all the allottees will have the same rights and no discrimination will be done
Details of all existing projects- name of the project, location of the project, land details of the project, project plan, layout plan, site plan, floor plans, number of units in the project, carpet area of each unit, sales agreement, prospectus, any other relevant documents

In addition to these documents, some states may also require additional documents such as:

Proof of experience of the promoter
Bank account details of the promoter
Letter of undertaking from the promoter

Once the documents are submitted, the RERA authority will review them and approve or reject the application within a stipulated time period. If the application is approved, the project will be registered under RERA.

Documents Required for RERA Registration (Agents & Brokers)

The documents required for RERA registration vary from state to state. However, some of the common documents that are required across all states include:

PAN Card and Aadhar Card of the promoter
The balance sheet of the promoter broker for the previous financial year
Last three years' Income Tax Returns (ITR)
Self-declaration stating all the allottees will have the same rights and no discrimination will be done

In addition to these documents, some states may also require additional documents such as:

Proof of experience of the Agent/broker
Bank account details of the Agent/broker

Once the documents are submitted, the RERA authority will review them and approve or reject the application within a stipulated time period. If the application is approved, the project will be registered under RERA.

RERA Registration Fees

Like the documents, the RERA registration fees vary from state to state. However, the fees are generally nominal. For example, the RERA registration fees for a promoter in Maharashtra is Rs. 10,000; in Karnataka, it is Rs. 25,000.

Benefits of RERA Registration

RERA registration offers several benefits to both developers and homebuyers. For developers, it enhances their reputation and credibility in the market. RERA registration provides a competitive advantage and builds trust among potential homebuyers.

Homebuyers can have peace of mind knowing that a project with RERA registration has been approved by the regulatory authority. They can confidently invest in such projects, as RERA ensures transparency and accountability in the real estate sector.

To whom RERA is not applicable?

The Real Estate Regulation and Development Act, 2016 (RERA) does not apply to the following:

Projects where the land to be developed is at most 500 square meters, or the number of units to be constructed does not exceed eight, including all phases.

Projects developed by the government or a public authority on land owned by them or made available to them by the government.

Plots owned by the development authority or put at their disposal by the government for the purpose of selling apartments.

Primitive cooperative housing societies and a state-level cooperative housing finance society that creates apartments or buildings for their members or allottees.

Projects that have been completed before the RERA Act came into force, i.e., before May 1, 2017.

Projects that have already been registered with the respective state RERA before May 1, 2017.

It is important to note that RERA is applicable to all real estate projects, even if a completion certificate has been issued to the project. This is because RERA also regulates the marketing and selling of real estate projects, and it is important for buyers to have the protection of RERA even after the project has been completed.

In addition, RERA is not applicable in West Bengal. The state of West Bengal has its own real estate regulatory law, the West Bengal Housing Industry Regulation Act (WBHIRA). WBHIRA has similar provisions to RERA, but there are some key differences. For example, WBHIRA only requires projects with 8 units to be registered.

Impact of the RERA Act

Increased transparency and accountability in the real estate sector. RERA has made it mandatory for builders and developers to disclose all relevant information about their projects, including the status of construction, financials, and completion timelines. This has given homebuyers more confidence in the real estate market and has helped to reduce fraud.

Improved customer protection. RERA has created several mechanisms to protect homebuyers, such as the right to a refund within 15 days of booking a property, the right to seek compensation for delays, and the right to arbitration in case of disputes. This has made it more difficult for builders to take advantage of homebuyers.

Increased investment in the real estate sector. RERA has created a more predictable and transparent environment for investors, which has led to increased investment in the real estate sector. According to a report by the National Real Estate Development Council (NAREDCO), investment in the real estate sector grew by 12% in 2022.

Reduced project delays. RERA has put in place numerous measures to discourage project delays, such as the requirement for builders to obtain a completion certificate before selling any units. As a result, project delays have decreased in recent years. According to a report by ANAROCK Property Consultants, the average project delay in India fell from 30 months in 2016 to 18 months in 2022.

Here are some recent statistics on the impact of the RERA Act on the Indian real estate industry:

As of March 2023, there are over 500,000 registered projects and over 10 million registered homebuyers under RERA.

In the first 5 years of RERA, over 1 lakh complaints have been filed by homebuyers, and over 60,000 cases have been resolved.

RERA has helped to recover over Rs. 1000 crore in compensation for homebuyers.

Overall, RERA has had a positive impact on the real estate sector in India. It has increased transparency and accountability, improved customer protection, and increased investment in the industry. It has also helped to reduce project delays.

What is RERA Carpet Area: Carpet Area as per RERA

Carpet Area as per RERA Act refers to the net usable floor area within the walls of an apartment or a building. It is the actual area where you can lay a carpet or use for other purposes like placing furniture.

It's important to note that the carpet area as per RERA does not include the thickness of the walls, balconies, terraces, open areas, or any common spaces within the building. It only includes the actual internal area that the buyer can use.

The RERA Act mandates that developers must disclose the carpet area of the apartment or building to potential buyers or allottees. This helps ensure transparency and allows buyers to make informed decisions about the size and cost of the property they are interested in.

The RERA Act provides guidelines to prevent developers from manipulating or misrepresenting the carpet area to deceive buyers. It ensures that the carpet area is accurately measured and disclosed, protecting the rights of homebuyers and promoting fairness in the real estate sector.

RERA Parking Rules

Some of the key RERA parking rules include:

Builders are not allowed to sell open parking spaces. Open parking spaces are considered common areas and must be transferred to the housing society.

If the builder sells covered parking spaces or garages, these must be clearly mentioned in the sale deed. The sale agreement must also specify the garage’s type, size, number, and location.

The builder must provide at least one covered parking space for every two apartments in a project.

The size of a covered parking space must be at least 160 square feet.

The builder must also provide adequate parking spaces for visitors. The number of visitor parking spaces must be at least 5% of the project’s total number of parking spaces.

How to Ensure That the Property is RERA-Compliant?

Check if the project is registered with RERA. The builder must register the project with the RERA authority in the state where the project is located. You can check the project's registration status on the RERA website.

Verify the project details on the RERA website. The RERA website of your state will have all the information on the project, including the project name, developer name, location, carpet area, number of units, and completion date.

Check the agreement of sale. The agreement of sale must be in line with the RERA rules. It must clearly mention the carpet area, price, payment schedule, possession date, and any penalties for delay in possession.

Verify the escrow account. The builder must deposit 70% of the total amount collected from buyers in an escrow account. This account will be used to complete the project. You can check the escrow account status on your respective state’s RERA website.

Check the completion timeline. The builder must complete the project within the stipulated time period. If the project is delayed, you may be entitled to compensation.

Penalties Under RERA

Penalties for Promoters
- Failure to register a project: Promoters who fail to register their projects with the RERA are liable to a penalty of up to 10% of the estimated project cost.
- Providing false information: Promoters who provide incorrect information in their project registration applications are liable to a penalty of up to 5% of the estimated project cost.
- Violation of other provisions of the Act: Promoters who violate any other provisions of the RERA are liable to a penalty of up to 5% of the estimated project cost.
- Failure to comply with orders of the RERA: Promoters who fail to comply with orders issued by the RERA are liable to a penalty of up to Rs. 10,000 per day for every day of the default.
Penalties for Buyers
- Non-compliance with RERA: Buyers who fail to comply with the provisions of the RERA are liable to a penalty of up to Rs. 10,000 per day for every day of the default.
- Non-compliance with orders of the Appellate Tribunal: Buyers who fail to comply with orders issued by the Appellate Tribunal are liable to a penalty of up to Rs. 10,000 per day for every day of the default.
Penalties for Real Estate Agents
- Failure to register with the RERA: Real estate agents who fail to register with the RERA are liable to a penalty of up to Rs. 10,000 per day for every day of the default.
- Providing false information: Real estate agents who provide incorrect information in their registration applications are liable to a penalty of up to Rs. 5,000 per day for every day of the default.
- Violation of other provisions of the Act: Real estate agents who violate any other provisions of the RERA are liable to a penalty of up to Rs. 5,000 per day for every day of the default.

In addition to the penalties listed above, the RERA also allows for the cancellation of project registration, the suspension or revocation of licenses, and imprisonment for up to three years in cases of serious violations.

List of States that have Enforced the RERA Act

State/UT	Date of Notification
Maharashtra	1st May, 2017
Karnataka	1st May, 2017
Uttar Pradesh	23rd May, 2017
Tamil Nadu	1st June, 2017
Haryana	1st June, 2017
Rajasthan	1st June, 2017
Delhi	24th November, 2016
Telangana	1st July, 2017
Andhra Pradesh	1st July, 2017
West Bengal	1st June, 2018
Gujarat	1st August, 2017
Punjab	1st September, 2017
Bihar	1st October, 2017
Chhattisgarh	1st November, 2017
Kerala	1st December, 2017
Odisha	1st January, 2018
Madhya Pradesh	1st February, 2018
Ladakh	1st March, 2018
Jammu & Kashmir	1st April, 2018
Dadra and Nagar Haveli	31st October, 2016
Daman and Diu	31st October, 2016
Goa	24th November, 2017
Uttarakhand	28th April, 2017

As of July 2023, the following states have not yet enforced the RERA Act:

Arunachal Pradesh
Meghalaya
Sikkim
Nagaland

Conclusion

The RERA Act, along with its rules and registration process, plays a crucial role in protecting the interests of homebuyers and promoting transparency in the real estate sector. It empowers homebuyers to make informed decisions, encourages fair practices among developers, and strengthens the overall credibility of the industry.

This landmark legislation has restored the trust of homebuyers, making the dream of owning a home a reality for millions across the country.

Understanding the RERA Act and its regulations is essential for all stakeholders, be it homebuyers or developers, to navigate the real estate market effectively.

FAQs

Is RERA approval mandatory for plots?

RERA approval is mandatory for all real estate projects that involve the sale of land or plots that are more than 500 square meters. However, there are some exceptions to this rule. For example, in Tamil Nadu, RERA approval is mandatory for all real estate projects, including plots, regardless of the size of the plot.

How to check RERA registration?

To check the RERA registration, follow these steps:

Visit the official RERA website of your state.
Look for the project or property search option.
Enter the project or property details.
Check the registration details.
Verify the information.

How to check RERA number?

To check RERA number, you can:

Visit the official website of the RERA in the state where the project is located.
Call the RERA helpline number for the state where the project is located.
Send an email to the RERA office (on the website) for the state where the project is located.

How to check RERA status?

To check the RERA status, follow these steps:

Visit the RERA Official Website of the respective state.
Locate the Search Option.
Select the Project or Developer.
Enter the Required Details.
Submit the Inquiry.
View the RERA Status.

How to calculate RERA carpet area?

RERA Carpet Area = Net Usable Area of the Apartment (excluding external walls, terrace, balcony and verandah) + Internal Partition Wall Areas.

Is balcony included in carpet area as per RERA?

No, the balcony is not included in the carpet area as per RERA. The carpet area only includes the area inside the apartment’s walls, excluding the balcony. The balcony is considered a common area.

How to file RERA complaint online?

Here are the steps on how to file a RERA complaint online:

Go to the official website of the RERA authority in your state.
Click on the 'Complaint' tab.
Create a login ID if you don't have one already.
Fill out the complaint form, including your name, contact details, and the details of your complaint.
Attach any supporting documents, such as copies of contracts or correspondence.
Pay the registration fee.
Submit the complaint.

How to check RERA complaint status?

To check the status of your RERA complaint, follow these steps:

Go to the official website of the RERA authority in your state.
Click on the 'Complaint Status' tab.
Enter your complaint number.
Enter the captcha code.
Click on the 'Submit' button.