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RERA: Everything you must know about the Real Estate Act
To regulate the real estate sector, the government has come up with the idea of Real Estate Regulatory Authority (RERA) Bill which is expected to help buyers. RERA is supposed to protect the interest of the homebuyer and ensure timely delivery of projects. Real Estate Regulatory Authority (RERA) Bill was introduced in 2013 and finally the bill got approved in March last year.
Although RERA is a central law, its implementation will depend on state governments, as real estate is a state subject. Maharashtra government had approved the Real Estate (Regulation and Development) Act (RERA). The deadline for online submission of realty projects under RERA draws to a close on July 31, 2017. Under RERA, each state will have to setup regulatory bodies as appellate tribunals to solve the disputes between buyer and builder within 120 days.
Developer will have to put 70% of the money collected from a buyer in a separate account to meet the construction cost of the project.
RERA will make it mandatory for all commercial and residential real estate projects where the land is over 500 sq. mt. or eight apartments will have to register with the regulator before launching a project.
RERA also seeks to impose strict regulations on the promoter and ensure that construction is completed on time. Carpet area has been clearly defined in the bill to include usable spaces like kitchen and toilets imparting clarity which was not the case earlier.
A developer’s liability to repair structural defects has been increased to 5 years from the earlier 2 years. The buyer will pay only for the carpet area (area within walls). The builder can’t charge for the super built-up area, as is the practice at present.
Developers will be able to sell projects only after the necessary clearances. Under RERA, builders and agents will have to register themselves with the regulator and get all projects with more than eight apartments registered before launch.
To enable informed decisions by buyers, Real Estate Regulatory Authorities will ensure publication on their websites information relating to profile and track record of promoters, details of litigations, advertisement and prospectus issued about the project, details of apartments, plots and garages, registered agents and consultants, development plan, financial details of the promoters, status of approvals and projects etc.
Gautam Chatterjee, RERA chairman, had recently sent a letter to SRA has directed them to register all upcoming slum projects on the website. Land of slum dwellers, that are eligible under the criteria of Slum Rehabilitation Authority (SRA), is given to a developer who builds a permanent structure for slum residents. The developer in return gets additional Floor Space Index who can then build a sale component and make profit. How RERA will benefit builders
The builders will also benefit from the RERA, as it proposes to impose penalty on allottee for not paying dues on time. Also, the builder will have the opportunity to approach the regulator in case there is any issue with the buyer.
But, builders believe that the bill was heavily stacked against them. The bill provides for penalty up to 10 per cent of the total project cost or even imprisonment, if builders do not honour their commitment or fail to register themselves with the regulator.
How Maharashtra worked towards RERA implementation The Government of Maharashtra had released a draft version of rules in December, after which state government had sought suggestions and objections from various stakeholders. After seeking out all the suggestions and objections which the state government received, the final rules were approved and will come into effect from May 1, 2017.
Anti-discriminatory clause
After getting piles of complaints from buyers about builders denying selling flats due to buyers’ religion, marital status and dietary preferences, Maharashtra Government also incorporated an anti-discriminatory clause under RERA. Also, the Maharashtra government added news rules under RERA such as parking spaces, which can now be sold by builders, to regulate these sales. State government has mandated that builders should disclose the sales of these parking spaces. Prevailing rules grant co-operative housing societies to distribute parking spaces among its members. Overall, the RERA Act adds many other rules which can regulate the real estate sector more comprehensively.
Impact of RERA
Cushman and Wakefield report says residential project launches have fallen by 8% since the Real Estate (Regulation and Development) Act 2016 was announced.
  The fall in new unit launches is most noticeable in the NCR. Launches in the residential sector are expected to remain restricted over the next 2 to 3 quarters as developers will be making changes to their business structure, operations and marketing strategies to comply with RERA norms.
The share of affordable segment in total launches has improved. While sales have been weak across segments, it has been prominent in the high-end and luxury segments over the last quarters owing to demand-supply mismatches Under RERA, all property brokers will have to register with real estate regulators in their states, thus sieving out the small-time players and consolidating major ones
In a major relief to citizens, the Real Estate Regulatory Authority has decided to accept complaints about unregistered projects for free of cost from informants until the 90-day period granted to builders to register their projects ends. The law though states that a mandatory fee of Rs 5,000 is required for filing of the complaint.
New order:
Now, according to new order issued by the Real Estate Regulatory Authority (RERA), developers can’t delete documents once uploaded on the website. Developers now will have to be extra careful while uploading any documents for registration, as the new orders from the RERA says that documents once uploaded by the promoter during registration or project update cannot be deleted. The real estate lobby is not happy with the new orders. RERA as also said that, if the developer fails to update the progress in the project, then action will be taken too.
The Real Estate Regulatory Authority (RERA), have said that developer who is registering with them will have to furnish all documents pertaining to the project, this will include an updated list of flats sold. The new orders have also mentioned that the developer isn’t allowed to delete documents already uploaded, but the developers are allowed to upload additional new documents.

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