Real estate sector acting a catalytic role in satisfying the requirements and demand for housing and infrastructure in the country and is an important pillar of the economy. Though this division has grown significantly in recent years, it has been generally unregulated along with the absence of professionalism and standardization and absence of satisfactory consumer protection.
It has no sectoral regulator like there are for other specific sectors like insurance, telecom, stock markets etc. History is an eyewitness to the fact that whenever sectoral regulators like SEBI, IRDAI, TRAI, etc. have been formed, they have helped in developing the market and made it more vigorous.
However, Consumer Protection Act, 1986 is available as a forum to the buyers in the real estate market but the recourse is only remedial and is not adequate to meet all the distresses of consumers and promoters in that sector. The shortage of standardization has been a restraint to the healthy and orderly growth of industry. Therefore, for more than a decade the need for regulating the sector was being emphasized in various forums.
In view of the above mentioned practices, Parliament passed the Real Estate (Regulation and Development) Act, 2016 which objects at defending the rights and interests of consumers and promotion of homogeneousness and standardization of business practices and transactions in the real estate sector. It efforts to balance the interests of consumers and promoters by imposing certain roles and responsibilities on both of the parties.
It seeks to set minimum standards of accountability and a fast-track dispute resolution mechanism, transparency of contractual conditions and to establish equilibrium of information between the promoter and purchaser.
Objective
Safeguard accountability towards allottees and to defend their interest;
Rouse transparency, ensure fair-play and condense frauds & suspensions;
Familiarize professionalism and whole India standardization;
Institute regularity of information among the promoter and allottee;
Enforce certain roles and responsibilities on both promoter and allottees;
Establish a regulatory oversight mechanism to administer contracts;
Establish a fast- track dispute perseverance mechanism; and
Encourage good governance in the sector which in turn would create investor confidence.
Salient Features
Establish the Real Estate Regulatory Authority for regulations and promotion of the sector;
Establish the state-level governing authorities called Real Estate Regulatory Authorities;
Establish an arbitrating mechanism for prompt dispute redressal;
Ensure sale of plot/apartment of building/real estate project, in an efficient and transparent manner;
Ensure to protect the interest of consumers in the real estate sector;
Ensures registration of Residential real estate projects with Real Estate Regulatory Act unless exempted;
Standardizes transactions among buyers and promoters of residential real estate projects;
Provide that promoters cannot book or other these projects for sale without registering them;
Provides that promoter must upload details of the project in the website of RERA;
Provides that the amount collected from buyers for a project is maintained in a separate bank account for construction of that project;
Provides Right of Legal Representation to CS/CA/CWA or legal practitioners on behalf of the client; and
Provides the stringent penalty or promoter, real estate agent in case of non-adherence to the statute
Projects exempt from the ambit of the Act
If the Area of land to be used for construction does not exceed 500 Square meters or the number of apartments proposed to be constructed shall not exceed eight inclusive of all phases;
If completion certificate of any project has been obtained before the act came into force, then there is no requirement for registration under RERA; and
In case of renovation or repair or re-development, which does not involve marketing, advertising, selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project.
How to Register
Applicant has to file an application for registration with RERA in recommended form and manner along with agreed fees and documents;
Application for the registration must be either approved of rejected within a period of 30 days from the date of application by the RERA; and
On successful registration, the promoter of the project will be provided with the registration number, a login ID and password for the applicant against successful approval of registration.
Granting of registration by the Authority On receipt of the application by the promoter, the Authority shall within a period of thirty days-
Grant registration subject to the provisions of the Act and the rules and regulations made thereunder if within thirty days the Authority fails to provide registration or reject the application the project shall be deemed to have been registered. Within 7 days of expiry of such 30 days a registration number, including a Login Id and password to the applicant for retrieving the website of the Authority and to create his web page and to fill therein the details of the planned project; or
Revoke the application for causes to be documented in writing, if such application does not obey to the provisions of this Act or the rules or regulations made thereunder. Application shall not be forbidden unless the contender has been given an opportunity of being heard in the matter thereunder.
The registration granted shall be valid for a period declared by the promoter for completion of the project or phase thereof.
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