The Real Estate (Regulation and Development) Act 2016, referred to as the 'Act', applies to all of India except Jammu and Kashmir. The provisions of the RERA India apply to all residential apartments, buildings, and plots, whether residential or commercial. This Act defines a Real Estate Project as the development of buildings containing apartments, the conversion of existing buildings into apartments, and the development of land into plots for the sale of all or some of the aforementioned apartments to carry out the purpose of this Act. The RERA act India requires the registration of all projects larger than 500 square meters. This act covers all project-related information, contract documents for buying and selling properties, carpet area stipulation, a limit on an advance fee to 10% of the apartment, a deposit of 70% of the money collected from buyers in the escrow account, timely completion of the project and penal provisions. As a result, it is critical to note that the RERA Act is a comprehensive Act that applies to all of the projects mentioned above, whether commercial or residential.
Key features of the RERA in India
- The Real Estate Regulatory Authority was established to regulate and promote the real estate industry.
- To sell plots, buildings, or apartments as needed, as well as all real estate projects, transparently and efficiently.
- To protect the interests of consumers and buyers while preventing malpractice against them.
- To establish adequate and timely dispute resolution systems, as well as Appellate Tribunals to hear and adjudicate appeals from the Real Estate Regulatory Authority's orders, directions, and decisions.
- RERA is an acronym for state-level regulatory authorities.
- Work on residential real estate projects and register all projects that will be undertaken; otherwise, the promoters will be unable to promote or sell.
- To assign promoters the task of uploading project details, including layout and site plans, to the website.
- When a promoter is required to transfer or assign a majority of the rights and responsibilities in a real estate project to a third party, two-thirds of the allottees must provide written consent in addition to RERA's written approval.
- To ensure that the buyer or promoter, as applicable, pays an equal amount in the event of a default.
- Where the promoter causes the buyer to suffer a loss as a result of other people claiming property (defective title of property) that has been or is being built, the promoter must compensate the buyer.
Overview:
- Section 20 lists state-level regulatory authorities, including the Real Estate Regulatory Authority (RERA). The Real Estate Regulatory Authority (RERA) is set up at the state level. The Act empowers state governments to establish numerous regulatory authorities, each with the following mandate: Register and maintain a database of real estate developments, making it available for public inspection on the company's website, and Protecting the interests of promoters, real estate agents, and buyers.
- Real Estate Appellate Tribunal (Section 43):- The decisions of Real Estate Regulatory Authorities' can be appealed to the tribunals, including their composition, applications for dispute resolution, qualifications for chairperson and members, tribunal powers, and vacancies.
- Mandatory Registration (Section 3):- Regulatory Authorities require that all projects with a plot size of at least 500 square meters or eight flats be registered.
- Deposits:- 70% of the funds collected from the buyer must be deposited in a separate escrow account designated solely for the construction of that project.
- Penal interest on default (Section 61):- promoter and the buyer are obligated to pay an equal rate of interest if either party defaults.
- Advance payment ceiling (Section 13):- Without entering into a sale agreement, a promoter cannot accept more than 10% of the cost of the plot, flat, or building as an advance payment or application fee from an individual.
- Punishment (Section 66):- For violations of Appellate Tribunal and Regulatory Authority orders, developers can face up to three years in prison, while agents and buyers can face up to a year in prison or a punishment for each day the default persists, which can amount to up to 10% of the anticipated cost of the real estate project's plot, apartment or building.
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