The Real Estate (Regulation and Development) Act, or RERA Act, was passed by the Indian government in 2016 to regulate the real estate industry, protect buyers' interests, and encourage developers to provide more professional and timely services. It is the sole government department which keeps a check on the interests of not only the buyers but also the developers alongwith regulating norms for Real Estate agents. The Central and State governments were required under the Real Estate Act to notify their own rules under the Act within six months, based on the model rules established under the Central Act. This has had a very significant & positive impact on India's real estate market, benefiting both buyers and builders. The bill was passed on 10 March 2016 by the Upper House (Rajya Sabha). The HARERA (RERA in the state of Haryana) was introduced on 28th July, 2017.
RERA was created with the goal of regulating the real estate sector and primarily addressing issues that home buyers often face, importantly -
To do so, authorities have made it mandatory for all builders/ developers to carry out RERA registration before they launch/sell and subsequently start developing a project and also for all Real Estate Agents to register themselves with RERA indivudually or register their firms. RERA approved simply means RERA registered. Approvals, land titles, insurance, etc., are the guidelines that every builder has to follow to register their project.
According to the Act, every real estate project (in which the total area to be established exceeds 500 sq m or more than eight apartments are planned to be developed at any stage) must be registered with the RERA of the state in question. Any existing project/scheme for which a certificate of completion or a certificate of possession has not been issued is required to comply with the RERA Act and register. All Real Estate Agents (brokers/dealers) are also compulsarily required to register themselves individually or their firms with RERA.
The main cause of any construction-related project's unwelcome delay is that the funds raised from one project are diverted significantly by some builders/developers to begin a new project. On a number of occasions, it has been observed that the developer diverting such funds to another project results in a funding shortage, causing the project to be delayed. To prevent such misappropriation of funds, the promoters/developers are now needed to keep 70% of the venture receivables in a separate escrow account, which enures that the funds are not rerouted in any way. With the implementation of RERA (the Real Estate Act), buyers/consumers can now track the progress of their projects on the internet (RERA Website), as developers/promoters are now obligated to produce timely submissions to the concerned authority. As a result of the mandatory disclosure, there has been more accountability and transparency in the real estate sector from the viewpoint of the consumers, and consumers are in a better position to make investments. All developers and promoters are now required to disclose necessary details of ongoing projects, such as the size of their apartments and houses based on carpet area, which includes usable spaces such as kitchens and bathrooms, which was a big relief to the industry. It has been made mandatory for all RERA registered projects to update their details to the department so that the RERA official website can be updated at every stage of the project's development. Under RERA, all builders must use the same model sale agreement.
As a homebuyer, you are entitled to a number of RERA benefits, some of which are listed below:
Knowing that all builders must now enrol under RERA, that they'll be held responsible and any delays, and that any concerns will be resolved quickly gives homeowners even more confidence to invest in a RERA-registered developer's property. They can also rest assured that the property will be delivered to them in the time frame promised. This means they don't waste money by staying in a rented place longer than they planned simply because the property isn't ready when they expected it to be. RERA has certainly revolutionised the real estate industry by simplifying rules for builders and developers. It has made real estate projects more appealing to customers by holding builders accountable, resulting in increased project sales for the real estate industry. Because homeowners are no longer afraid of delays or fraud when purchasing a home, RERA has aided builders in increasing sales while also making sure that the desires of buyers are protected at all times.
In the real estate sector, we can say that because developers are now expected to perform within the regulatory body's strict framework, frivolous supply will also decrease since there are many risks associated with doing multiple projects at once. Naturally, developers (builders) will be centred on launching projects that are likely to be finished within the agreed time frame as per the consumer agreement, failing which severe consequences will be imposed. The Real Estate Act expressly states that during the registration process, the developer (builder) must specify the time and duration of the project's completion and that if the developer fails to do so, strict actions are in place and will be taken against them, including hefty interest and penalties. When it comes to the impact of RERA on home buyers and delayed possession, we can safely say that the initiative has been very consumer-centric. Furthermore, the initiative has protected the interests of buyers by allowing them to follow the buildings and infrastructure and properties from start to finish. With the initiation of the Real Estate Act, we can say that the system has become more transparent as project efficiency has improved. Developers are now concentrating on following the Real Estate Act's guidelines, resulting in a regulated industry and a secure environment for buyers.
The process for a fresh registration or renewal of exisiting registration under RERA is different for different states and also, the list of documents required for registration is different for different states. To get a detailed process chart for fresh registration / extension-renewal of individual agents or firms (Propreitorship/Limited/Pvt Ltd./LLP), please fill the form below and press SEND to get instant access to detailed information.