What is RERA? Know Every Thing About RERA Act

What is RERA? Full Form of RERA, Benefits of RERA, How It Works, Know Everything about RERA Act 

In this blog, we will see what RERA is, the benefits of RERA, RERA registration fees, the impact of RERA on real estate agents, what happens if builders delay possession as per RERA, what is the full form of RERA, and more. So, read this blog completely. 

What is RERA? 

RERA, which stands for Real Estate Regulatory Authority, is a legislative framework enacted by the Indian government to regulate the real estate sector. This act was passed by the Indian Parliament in 2016 and came into effect in May 2017.

The primary objective of RERA is to ensure transparency, accountability, and efficiency in the real estate market, thereby safeguarding the interests of homebuyers and promoting the orderly growth of the sector.

The major impact of the RERA Act is that it brings transparency to the home buying process and addresses the concerns of builders, brokers, and home buyers. 

From its implementation, several changes are coming over time. That’s why it's important to know complete information and guidelines under the RERA Act.

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Key Provisions of RERA

1. Registration of Real Estate Projects

• Under RERA, developers are required to register their projects with the respective state Real Estate Regulatory Authority (RERA).
• Developers or builders must provide detailed information about the project, like project layouts, approvals, timelines for completion, and financial details.

2. Transparency and Disclosure

• RERA mandates developers to make all project-related information available to buyers on the RERA website.
• This includes details about the developer, land status, approvals, layout plans, carpet area, and project timeline. Any changes or modifications to the project must be disclosed to home buyers.

3. Carpet Area Definition

• RERA defines the carpet area more clearly, ensuring that buyers are aware of the actual usable area of the property they are purchasing.
• As per RERA guidelines, it is mandatory for the builders or developers to mention the carpet area in advertisements or sales agreements.

4. Escrow Account for Funds

• Developers are required to deposit 70% of the funds received from buyers in a separate escrow account.
• This ensures that funds are utilized only for the specific project, preventing diversion to other projects or purposes.

5. Timely Project Completion

• RERA specifies strict timelines for project completion; if the developer fails to complete the project on time, they will have to pay penalties for delays.
• Developers are required to adhere to the agreed-upon timeline and hand over possession of the property as per schedule.

6. Establishment of a Real Estate Regulatory Authority

• Each state and union territory has its own Real Estate Regulatory Authority (RERA) responsible for implementing and enforcing RERA provisions.
• RERA authorities act as semi-judiciary bodies to resolve clashes between buyers and developers.

7. Buyer Protection

• It provides a platform for buyers to file a complaint against the developer or agent if they have any issues with them.

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Key Benefits of RERA

Certainly! Here are the key benefits of RERA Act

1. Consumer Protection: The main benefit of the RERA Act is that it ensures transparency and accountability, safeguarding the interests of homebuyers. It is implemented on both residential and commercial projects.

2. Timely Delivery: The Act mandates developers to adhere to project timelines, preventing delays and ensuring timely completion. As per RERA guidelines, the developers should complete their project by the deadline.

3. Quality Construction: RERA mandates developers to maintain construction standards, ensuring buyers receive properties of expected quality.

4. Financial Discipline: Developers are required to maintain separate escrow accounts for each project, preventing fund diversion and ensuring completion.

5. Dispute Resolution: RERA establishes authorities for the timely resolution of disputes, providing a structured mechanism for grievance redressal.

RERA Registration Fees

The RERA registration fees vary from state to state. It is not fixed; each state has its own rules and regulations, and according to them, they charge.

This fee is calculated based on factors such as the size of the project, the number of units, and the location. In most states, the RERA registration fees are charged based on the square foot or number of units or apartments in the project.

To know the correct RERA registration fees for the respective states, you should visit the official website of RERA or consult with a real estate professional.

Impact of RERA on Real Estate Agents

Here's how RERA affects real estate agents:

1. Mandatory Registration: RERA mandates real estate agents to register with the regulatory authority in their respective state. This ensures that all agents operate within a regulated framework.

2. Compliance with Code of Conduct: Agents are required to adhere to a prescribed code of conduct under RERA. This includes maintaining transparency in property transactions, providing accurate information to clients, and acting in their best interests.

3. Penalty for Non-Registration: As per the RERA Act, an unregistered broker or real estate agent cannot deal with a registered project. RERA requires agents to disclose all relevant information about properties to clients, including details about the developer, project approvals, and any encumbrances on the property.

4. Accountability and Liability: Agents are held accountable for any misrepresentation or fraud in property transactions. They can face penalties or even lose their registration if found guilty of misconduct.

5. Promotion of Professionalism: RERA encourages professionalism among real estate agents by setting standards for their conduct and ensuring that they operate with integrity and honesty.

6. Dispute Resolution: RERA provides a platform for resolving disputes between agents and their clients through the Real Estate Regulatory Authority or the Real Estate Appellate Tribunal, if necessary.

7. Enhanced Consumer Confidence: By regulating the activities of real estate agents, RERA enhances consumer confidence in the real estate market, leading to more transparent and trustworthy transactions.

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What Happens if builder delay possession, as per RERA?

If a builder delays possession of a property as per RERA regulations, here's what can happen:

1. Compensation: The builder may be liable to pay compensation to the homebuyer for the period of delay as specified under RERA. This compensation amount is typically calculated based on the agreed-upon terms in the sales agreement.

2. Interest Penalty: RERA mandates that if the builder delays possession, they must pay interest to the homebuyer for the period of delay. The rate of interest is determined by the regulatory authority and is usually higher than prevailing bank interest rates.

3. Legal Recourse: Homebuyers have the right to take legal action against the builder for the delay in possession. They can approach the regulatory authority or file a complaint with the Real Estate Regulatory Authority (RERA) to seek compensation.

4. Project Revocation: In extreme cases of non-compliance or prolonged delays, RERA empowers the regulatory authority to revoke the registration of the project. This can result in penalties for the builder and may lead to the cancellation of the project altogether.

Conclusion: What is RERA

The Real Estate Regulatory Authority (RERA) represents a significant milestone in the regulation of the real estate sector in India. By promoting transparency, accountability, and efficiency, RERA aims to protect the interests of homebuyers and foster sustainable growth in the real estate market.

FAQs

1. What is the benefit of RERA?

Ans. RERA benefits homebuyers by providing them with more protection and transparency. It holds developers accountable for timely project delivery and strengthens their responsibilities. Overall, it creates a better real estate market that benefits both homebuyers and developers.

2. What is RERA and how does it work?

Ans. RERA is an act or law by the government that brings transparency to real estate. According to RERA, developers have to register their projects with RERA, providing detailed information such as project plans and timelines. 

They also have to keep the money for the project separate, so it's used only for that project. RERA helps ensure that projects are completed on time and up to standard. It also has rules to fairly resolve disputes between buyers and developers.

3.  Is RERA good or bad?

Ans. RERA is generally considered good because it protects homebuyers, brings transparency, and holds developers accountable.

4. Why is a RERA certificate required?

Ans. A RERA certificate is required to ensure that a real estate project complies with the regulations set forth by the Real Estate (Regulation and Development) Act. It confirms that the project has been registered with the appropriate authorities, providing transparency and protection for homebuyers.

5. What is RERA approval?

Ans. RERA approval means that a real estate project has been officially registered and approved by the regulatory authority under the Real Estate Regulatory Authority.

6. Is it safe to buy RERA approved projects?

Ans. Yes, generally, it is safe to buy RERA-approved projects because they have undergone regulatory scrutiny, providing transparency and protection for homebuyers.

7.  What if a project is not registered in RERA?

Ans. If a project is not registered with RERA, it may not comply with the legal requirements set forth by the Real Estate (Regulation and Development) Act. This could pose risks for homebuyers in terms of transparency, accountability, and legal recourse in case of disputes.

8. What is the RERA carpet area?

Ans. The RERA carpet area refers to the actual usable area within the walls of a property, excluding common areas like walls and balconies. It's the area where you can place your carpet, furniture, or other belongings.

9. What is the difference between RERA registered and RERA approved?

Ans. "RERA registered" means that a real estate project has been officially listed with the regulatory authority under the Real Estate (Regulation and Development) Act. 

"RERA approved" typically refers to the approval of individual units or buildings within the registered project by the regulatory authority, indicating compliance with RERA regulations.