WHAT IS RERA ACT IN REAL ESTATE? WHY IS RERA REGISTRATION IMPORTANT?
The real estate market in India has witnessed a tremendous boom in the past few decades. The returns from real estate investments have often outperformed other investment instruments, including the equity markets. Both homebuyers and investors are equally responsible for this growth.
However, one thing that kept worrying Indian property buyers until a few years ago was the instances of possession delays by builders who often missed their construction targets. This called for stricter norms and Government intervention.
So, in a bid to boost real estate investments and protect the rights of property buyers, the Government of India passed the Real Estate Regulation and Development Act (RERA) in March 2016 which came into force w.e.f. 1st May 2016 and 1st May 2017. Under the RERA, all real estate projects have to be registered under a Real Estate Regulatory Authority. Let’s understand what is RERA in real estate and why RERA registration is crucial.
What is RERA?
As mentioned, the Real Estate Regulation and Development Act (RERA) was passed by the Government in the year 2016 to regulate the real estate industry in India and safeguard homebuyers’ rights. Till then, homebuyers in India often complained that the real estate sector is heavily tilted in the favour of the builders and developers. That is why the Government passed the RERA to make real estate transactions between customers and developers fairer and more equitable.
The primary objectives of the RERA in real estate include:
- To protect the rights and interests of the homebuyers in India
- To maintain transparency in real estate transactions.
- To ensure the accurate flow of information between developers and homebuyers
- To impose greater responsibilities on builders as well as buyers
- To uplift the credibility of the real estate sector in India and attract investors
- To establish an adjudicating mechanism for speedy dispute redressal.
Why is RERA important?
The real estate industry is one of the leading revenue generators for the State Government and the Government of India. They impose various types of taxes on real estate transactions, such as stamp duty, registration charges, property tax, etc.
Regulation like RERA was required to also strengthen the trust of investors in India’s real estate sector. RERA provides a middle ground for both property buyers and developers and helps in reducing the risks faced by people before this act.
After the implementation of the RERA in real estate , the buyer can know all relevant details about a project and can also check the documents related to it. The developers or builders will have to ensure that timely possession is given to the homebuyers or pay interest and/or compensation for delayed possession. The RERA has to also ensure that the developers sell properties based on their carpet areas instead of super-built areas. This has contributed to greater transparency and trustworthiness.
What is RERA Registration?
As per the RERA, a real estate project shall be registered under the RERA, if the area of land proposed to be developed exceeds 500 square metres or more than eight apartments. It further provided that projects for which the completion certificate (CC) or occupancy certificate (OC) has not been issued on or before the date of enforcement of the Act were also required to register under the RERA.
While completing their RERA registration process, the builders are required to reveal all information about the project, such as its land status, approvals, proposed completion date, promoter details, etc. The developers/ builders cannot advertise and/or market any real estate project or any part thereof without the mandatory RERA registration.
The Indian Government passed the RERA in 2016 to bring more transparency to the real estate sector and uphold the rights of property buyers. For developers and builders, it brought greater responsibilities and legal obligations.
Frequently Asked Questions
How to register a real estate project under RERA in Maharashtra?
Application for registration of the real estate projects under section 4 of the RERA shall be made in Form ‘A’. The process for RERA registration is different for promoters and real estate agents.
How to check if a project is registered under RERA?
Once a project gets registered under the RERA, a unique RERA registration number is allotted to it. You can check for this RERA registration number on the project’s website to know if it is registered under the RERA Act or not.
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