What is RERA?
RERA stands for the Real Estate (Regulation and Development) Act, 2016 was introduced to bring greater transparency, accountability and discipline to the real estate sector and to protect the interests of home buyers.
For a buyer, understanding RERA can help answer some important questions:
- Is the project registered?
- What exactly is the developer obligated to deliver?
- Can the developer change the sanctioned plan?
- What happens if possession is delayed?
- How is the buyer's money protected?
- What remedies are available in case of a dispute?
The legislation establishes a regulatory framework for real estate projects and real estate agents. It requires eligible projects to be registered with the relevant Real Estate Regulatory Authority and places various disclosure, compliance and accountability obligations on promoters.
The Act also provides a mechanism through which buyers can seek remedies in cases involving issues such as delay, non-compliance or other violations covered by the legislation.
Why Was RERA Introduced?
Before RERA, property buyers often faced difficulties relating to delayed possession, incomplete disclosures, changes in project specifications and contractual disputes. RERA sought to address several of these concerns by promoting:
- Transparency Important project information is required to be disclosed.
- Accountability Promoters have statutory obligations towards allottees.
- Financial discipline The Act provides for a separate account mechanism for amounts realised from allottees for a real estate project.
- Standardisation The regulatory framework brings greater consistency to project disclosures and contractual practices.
- Grievance redressal Buyers have access to specialised regulatory mechanisms.
Which Real Estate Projects Need RERA Registration?
Under Section 3(2)(a), a project is exempt from registration where: the area of land proposed to be developed does not exceed 500 square metres OR the number of apartments proposed to be developed does not exceed 8, inclusive of all phases.Consequently, where a project exceeds 500 square metres OR has more than 8 apartments, the statutory exemption does not apply and the project generally requires registration, subject to the applicable State/UT framework.
For example:
- Project A having area 450 sq. m. and 6units : exempt under Section 3(2)(a) thus no registration required
- Project B having area 600 sq. m and 6 units : requires registration
- Project C having 450 sq. m.and 10 units : requires registration
- Project D having 600 sq. m.and 10 units : requires registration
New & Ongoing Developments: Any fresh project launch as well as ongoing projects that did not receive a Completion Certificate (CC) before May 1, 2017
Each and every phase of a project will require to have separate registration even though such phase of a project is part and parcel of the same licensed land for which the registration was sought for the previous phase.