The Real Estate (Regulation and Development) Act, 2016 is rules of the Parliament of India which follow to protect home-buyers as well as help advance investments in the real estate industry. The Act establishes Real Estate Regulatory Authority(RERA) in each state for rules of the Real Estate sector and also acts as formally judge body for quick argument redressal. The bill was run by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016. The Act came into place on 1 May 2016 with 59 of 92 sections notified. Remaining acts came into force on 1 May 2017. The Central and state governments are liable to notify the Rules under the Act within a statutory period of 6 months.
For long, home buyers have concerned that real estate transactions were leaning and heavily in favor of the developers. RERA and the government’s model code, aim to create a more balanced and fair transaction between the seller and the buyer of properties, especially in the primary market.
Registration of projects under RERA
- Marketing and residential projects including plotted development.
- Projects measuring exceeds than 500 sq mts or 8 units.
- Projects without Completion Certificate, before initiation of the Act.
- The project is only for the purpose of repair which does not involve re-allotment and marketing, advertising, selling of any apartments, plot or building in the real estate project, will not come under RERA.
- Each phase is to be treated as a stand-alone real estate project requiring fresh registration.
Documents Required for Registration Under RERA
- PAN Card
- ITR of last 3 years and the balance sheet
- The builder must clear about the apartment (carpet area, number of floors, parking space)
- Agreement by the builder of having legal title of the land with proof
- Details of the land
- If the builder is not the owner of the land, the approval letter of the actual owner with documents will be required
- Details of the project
- Ownership documents
- Information of the persons involved (Architects, Engineers and others)
Registration Process for Real Estate Agents
- Project registration will be done
- An advertisement should be done
- Withdrawal – POC method implemented
- Website updation / Disclosures should be given.
- Carpeted area.
- Alteration in a project – approval of 2/3 allottee is the must
- Project accounts – Audit must be completed
- 70% of the funds contributed from allottee needs to be located in the project account. Withdrawals to cover construction and land cost.
- Withdrawals to be in proportion to the % age completion method.
- Withdrawal to be approved by an engineer, architect, and CA.
- Provision for RERA to stop project bank accounts upon non-compliance.
Registration of New Real Estate Project Under RERA – Maharashtra
(As per “Maharashtra Real Estate (Regulation and Development) ….Rules, 2017)
As per section 3 and 4 of Real Estate (Regulation & Development) Act, 2016 (REDA) read with Rule 3 of above rules, every promoter shall get the eligible real estate project, registered with RERA authority before sale/promotion/advertisement/booking etc
The application for registration of such Real Estate Project shall be made in writing along-with declaration, as prescribed in Rules, in triplicate.
The promoter shall pay a registration fee at the time of application for registration by way of a demand draft or a bankers cheque drawn on any scheduled bank or through online payment mode, as the case may be, for a sum calculated at the rate of,-
- 10/- per square meter of the land proposed to be developed, subject to minimum amount of Rs. 50,000/- and maximum Rs. 10 Lakhs
Documents Required for RERA Registration –
- Authenticated copy of the PAN card of the promoter;
- Audited balance sheet of promoter for preceding financial year.
- Income tax Returns of the promoter for 3 preceding financial years
- The number of open parking areas available in the real estate project;
- Authenticated copy of the legal title deed reflecting the title of the promoter to the land on which development of project is proposed along with legally valid documents for chain of title with authentication of such title;
- Details of encumbrances on the land on which development of the project is proposed including details of any rights, title, interest, dues, litigation and name of party.
- Where the promoter is not the owner of the land on which development of project is proposed details of the consent of the owner of the land along with a copy of the collaboration agreement, development agreement, joint development agreement or any other agreement, as the case may be, entered into between the promoter and such owner and copies of title and other documents reflecting the title of such owner on the land on which project is proposed to be developed;
- Name, photograph, contact details and address of the promoter if it is an individual and the name, photograph, contact details and address of the chairman, partners, directors, as the case may be, and the authorized person in case of other entities.
- the particulars in respect of Architecture and Design Standards, Type of Construction Technology, Earthquake Resistant Measures and the like to be adopted for Buildings and for Common Areas and of amenities/facilities in the Layout Plan of the real estate project;
- the nature of the organisation of allottees to be constituted and to which the title of such land parcels is to be conveyed and the specific local laws to govern such organisation of allottees on completion of real estate project;
- Any other information and documents as may be specified
Validation of Registration
The validation of registration shall be till completion of project as given by the promoter. The registration can be extended as per the prescribed rules.
Author – Rajesh, RERA Consulting
For, Arya E Commerce & Co.
Note – Please note that the above article is for education purpose only. This is based on our interpretation of laws which may differ person to person. Readers are expected to verify the facts and laws.