In this presentation we discus about the impact of Rera ON INDIAN real estate, the law under the RERA as per the Central government, how to register complaint under RERA etc

1. EFFECT OF RERA ON
INDIAN REAL ESTATE

2. RERA (REAL ESTATE REGULATORY ACT)

3. RERA (REAL ESTATE REGULATORY ACT)
 The Real Estate (Regulation and Development) Act, 2016 (RERA) is an
Act passed by the Indian Parliament which intends to protect the interests of
home buyers and enhance transparency in the real estate sector. They
examine how it will affect various stakeholders – from home buyers and
builders, to brokers – and the provisions and penalties prescribed under the
act.
 The Government of India enacted the Real Estate (Regulation and
Development) Act 2016 on 26th March 2016 and all its provisions came into
effect, from May 1, 2017.

4. HISTORY OF RERA
 The Rajya Sabha passed the RERA bill on March 10, 2016, followed by the
Lok Sabha on March 15, 2016 and it came into force from May 1, 2016. 59
of its 92 sections were notified on May 1, 2016 and the remaining provisions
came into force from May 1, 2017. Under the Act, the central and state
governments, are required to notify their own rules under the Act, six
months, based on the model rules framed under the central Act.

5. WHY RERA?
 For long, home buyers have complained that real estate transactions were
lopsided and heavily in favour of the developers.
 RERA and the government’s model code, aim to create a more equitable
and fair transaction between the seller and the buyer of properties,
especially in the primary market.
 RERA, it is hoped, will make real estate purchase simpler, by bringing in
better accountability and transparency, provided that states do not dilute the
provisions and the spirit of the central act.
 The RERA will give the Indian real estate industry its first regulator. The Real
Estate Act makes it mandatory for each state and union territory, to form its
own regulator and frame the rules that will govern the functioning of the
regulator.

6. NEED OF RERA ACT
 To maintain the interest of both the developers & buyers.
 To give detailed specifications of design, quantity and types of material, cost
of the building, etc. to RERA regulatory board.
 Every building has its specific RERA number with its specific bank account .
 Initially to start a project, developer has to deposit the total cost of that
project in the bank account.
 Transaction between buyer & developer is done through bank only.
 Developer can use only 30% of buyer’s amount (given as initial amount as
per the contract). remaining amount developer has to keep mandatorily in
bank account only.
 Developer has to give full details of company or person from where he is
buying the material.

7. RERA-PROJECTS
 Commercial and residential projects including plotted development.
 Projects measuring more than 500 sq. mts or 8 units.
 Projects without Completion Certificate, before commencement of
the Act.
 The project is only for the purpose of renovation / repair / re-
development which does not involve re-allotment and marketing,
advertising, selling or new allotment of any apartments, plot or
building in the real estate project, will not come under RERA.
 Each phase is to be treated as standalone real estate project
requiring fresh registration.

8. RERA-REGISTERING PROJECTS
 Authenticated copy of all approvals, commencement certificate,
sanctioned plan, layout plan, specification, plan of development
work, proposed facilities, Proforma allotment letter, agreement for
sale and conveyance Need to be given.
 Applying for project registration with RERA.
 Mandatory registration of new and existing projects with RERA
before launch.
 Registration of agents/brokers with RERA.
 Dispute resolution within 6 months at RERA and RERA appellate
tribunals.

9. RERA-REGISTERING PROJECTS
(CONT.)
 Separate registration of different phases of a single
projects.
 Developers to share details of projects launched in last 5
years with status and reason for delay with RERA.
 Timely updating of RERA website.
 Maximum 1 year extension in case of delay due to no
fault of developer.
 Annual audit of project accounts by a CA.
 Conveyance deed for common area in favour of RWA.
 Construction and land title insurance.
 Project completion time period.

10. RERA-CARPET AREA
According to the RERA, carpet area is defined as
‘the net usable floor area of an apartment,
excluding the area covered by the external
walls, areas under services shafts, exclusive
balcony or veranda area and exclusive open
terrace area, but includes the area covered by
the internal partition walls of the apartment’.

11. RERA-CARPET AREA (CONT.)
Rahul Shah, CEO of Sumer Group, points out that “As per
the RERA guidelines, a builder must disclose the exact
carpet area, so that a customer knows what he is paying
for. However, the act does not make it mandatory for the
builders, to sell a flat on the basis of carpet area.”

12. RERA – IN STATES
 As on July 31, 2017, 23 states and union territories (UTs) have
either established their permanent or interim regulatory authorities.
 Under the RERA, every state and UT must have its own regulator.
Developers will not be able to market their ongoing or upcoming
projects, till they register either with the permanent or interim
regulator in states. For ongoing projects, where completion or
occupancy certificate has not been given, the deadline for
registration ended on July 31, 2017.

13. IMPACT OF RERA
With the advent of RERA
 Specialised forums such as the State Real Estate Regulatory
Authority and the Real Estate Appellate Tribunal will be established
 Resolution of disputes pertaining to home buying and the aggrieved
party will have no recourse to other consumer forums and civil
courts, on such matters.
 While the RERA sets the groundwork for fast-tracking dispute
resolution, the litmus test for its success, will depend on the timely
setting up of these new dispute resolution bodies and how these
disputes are resolved expeditiously with a degree of finality

14. IMPACT OF RERA (CONT.)
 Initial backlog.
 Increased project cost.
 Tight liquidity.
 Rise in cost of capital.
 Consolidation.
 Increase in project launch time.
 Initially, a lot of work is to be done to get the existing and new project
registered. Details such as status of each project executed in last 5
years, promoter details, detailed execution plans, etc., needs to be
prepared.

15. RERA FOR HOME BUYERS
 Informing allottees about any minor addition or modification
 Consent of two-third allottees about any other addition or modification
 No launch or advertisement before registration with RERA
 Consent of two-third allottees for transferring majority rights to a third party
 Sharing information about project plan, layout, government approvals, land t
itle status, sub-contractors
 Increased affirmation on completion of projects and delivery to the consume
rs within time
 An increase in the quality of construction due to a defect liability period of fiv
e years
 Formation of RWA within a specified time or three months after majority of u
nits have been sold

16. RERA FOR BUILDERS
 Project registration
 Advertisement
 Withdrawal – POC method
 Website updates/disclosures
 Carpet area
 Alteration in project – approval of two-third allottees
 Project accounts – Audit

17. RERA FOR BUILDERS (CONT.)
 70% of the funds collected from allottees needs to be
deposited in the Project/Reserve Account; withdrawals
to cover construction and land cost
 Withdrawals to be in proportion with the percentage of
completion of the project
 Withdrawal to be certified by an Engineer, an Architect,
and a Chartered Accountant
 Provision for RERA to freeze project bank accounts or
Reserve Account upon non-compliance
 Interest on delay will be same for both customer and
promoter

18. REAL ESTATE FOR BROKERS
 Under the Real Estate (Regulation and Development) Act (RERA),
real estate agents will need to register themselves, to be able to
facilitate a transaction. The broker segment in India, is estimated
to be a USD 4 billion industry, with an estimated 5,00,000 to
9,00,000 brokers. However, it has traditionally been unorganised
and unregulated.
 With RERA in force, brokers cannot promise any amenities or
services that are not mentioned in the documents. Moreover, they
will have to provide all information and documents to the home
buyers, at the time of booking. Consequently, RERA is likely to
filter out the inexperienced, unprofessional, fly-by-night operators,
as brokers not following the guidelines will face hefty penalty or jail
or both.

19. REAL ESTATE FOR BROKERS
(CONT.)
 “It will bring a lot of accountability in the
industry and the ones who believe in
professional and transparent business, will
reap all the benefits. Now, the agents will have
a much larger and responsible role to perform,
as they will have to disclose all the appropriate
information to the customer and even help
them chose a RERA-compliant developer,”
says Sam Chopra, founder and chairman of
RE/MAX India.

20. BROKERS BECAME RERA
COMPLIANT
 Section 3: Promoter cannot advertise, book, sell or offer for sale, without
registration with RERA.
 Section 9:
 No agent can sell any project without obtaining RERA registration.
 Agents’ RERA number needs to be documented in every sale facilitated
by him.
 Registration needs to be renewed.
 Registration can be revoked or blocked if any breach is made to
conditions of registration for a specified time.

21.  Section 10:
 No agent can sell a project not registered.
 Maintain books and records.
 Not be involved in unfair trade practices.
 Make an incorrect statement – oral, written, visual.
 Represent that services are of a particular standard.
 Represent that the promoter or himself has approval or affiliation which such
promoter or himself does not have.
 Permit publication of advertisement in the newspaper or otherwise of services not
intended to be offered.
 Agent needs to facilitate possession of all documents to the allottee at the
time of booking.
BROKERS BECAME RERA COMPLIANT
(cont.)

22. FILE COMPLAINT UNDER RERA
 A complaint under the RERA, is required to be
in the form prescribed under the respective
states’ rules. The complaint can be filed with
respect to a project registered under RERA,
within the prescribed time limit, for violation or
contravention of provisions of the act or the
rules or regulations framed under RERA.

23. “For cases pending before the NCDRC ( NATIONAL CONSUMER DISPUTES
REDRESSAL COMMISION) or other consumer fora, the complainants/
allottees can withdraw the case and approach the authority under the RERA.
Other offences (except complaints under Section 12, 14, 18 and 19) can be
filed before the RERA authority,” explains Ajay Monga, partner at SNG &
Partners law firm.
FILE COMPLAINT UNDER RERA (CONT.)

24.  Digbijoy Bhowmik, head of policy, RICS ( ROYAL INSTITUTION OF
CHARTER SURVEYOURS), explains, “Complaints can be filed under Section
31 of the Real Estate (Regulation and Development) Act, 2016, either with the
Real Estate Regulatory Authority or the adjudicating officer. Such complaints
may be against promoters, allottees and/or real estate agents. Most state
government rules, made appurtenant to the RERA, have laid out the
procedure and form, in which such applications can be made. In the case of
Chandigarh UT or Uttar Pradesh, for instance, these are placed as Form ‘M’ or
Form ‘N’ (common with most other states and union territories).”
FILE COMPLAINT UNDER RERA (CONT.)

25. RERA – OFFENCE WISE PENALTIES
For Promoters

26. RERA – OFFENCE WISE PENALTIES
For Real Estate Agents

27. RERA – OFFENCE WISE PENALTIES
For Allotees

28. BENEFITS OF RERA
INDUSTRY
 Governance and transparency
 Project efficiency and robust project delivery
 Standardization and quality
 Enhance confidence of investors
 Attract higher investments and PE funding
 Regulated Environment

29. BENEFITS OF RERA (CONT.)
DEVELOPER
 Common and best practices
 Increase efficiency
 Consolidation of sector
 Corporate branding
 Higher investment
 Increase in organised funding

30. BENEFITS OF RERA (CONT.)
BUYER
 Significant buyers protection
 Quality products and timely delivery
 Balanced agreements and treatment
 Transparency – sale based on carpet
area
 Safety of money and transparency on
utilisation

31. BENEFITS OF RERA (CONT.)
AGENTS
 Consolidation of sector (due to
mandatory state registration)
 Increased transparency
 Increased efficiency
 Minimum litigation by adopting best
practices

32. RERA - REAL EXAMPLE
 MUMBAI: Maharashtra Real Estate and Regulatory Authority
(RERA) recently directed a builder to repay with interest Rs.
25 lakh including a cash amount of about Rs. 4.5 lakh paid
four years ago by a buyer for a flat in Virar who now wants to
cancel his booking as the possession was delayed by four
years. The order underscores the importance of keeping
copies of every document, including uncashed cheques, while
buying property.
 For, Pradeep Bedre, a person who had booked a flat in “Shree
Shakun Greens” it was a photocopy of a cheque that partly
helped him before RERA when he knocked at its door for a
refund.

33. RERA - REAL EXAMPLE (CONT.)
 Rajyavardhan Rathore settles with Parsvnath Developers refuses
flat and demands to get back Rs. 3 crore.
 Rathore had paid Rs. 75 lakh
in 2005 taking bank loans for
a flat in Parsvnath’s ‘Exotica’ project in Gurugram
 The developer had assured that the flat would be handed over by
October 2009 but failed to do so.

34. RERA - REAL EXAMPLE (CONT.)
 Around 27,000 projects across the country have been registered
under the Real Estate (Regulation and Development) Act, according
to the data from the Forum for People’s Collective Efforts (FPCE).
 Approximately, 17,000 applications for registration of agents have
been received by various authorities, data showed.
 MP Real Estate Regulatory Authority has sent notices to over 300
promoters/builders for failing to update the status of their respective
projects on RERA website.
 In Bengaluru as many as 542 ongoing real estate projects are facing
uncertainty with the Real Estate Regulatory Authority
Karnataka (RERA-K) issuing a notification prohibiting projects with
provisional approval from doing business.

35. RERA - REAL EXAMPLE (CONT.)
Of the total number of projects registered
 Nearly 18,000 are in Maharashtra
 2,350 in Uttar Pradesh
 more than 1,600 each in Gujarat and Madhya
Pradesh.
 Karnataka has registered around 1,000 projects.
 Haryana has registered around 400 projects.

36. “RERA TO BOOST REDEVELOPMENT, SLUM
REHAB SCHEMES”

37. CONCLUSION
 The unsold inventories in resale and new projects have risen up.
Newly launched schemes have also been affected because
developers are concentrating to complete the projects which are on
hand.
 Despite consumers patiently waiting in order to see fall in prices, in
next six months, the improvement and increase in demand is
expected to see among middle class housings. In this segment, most
consumers are salaried employees and they primarily depend on
home loans.
 With increase in responsibilities and financial discipline, attention will
be focused on consumer and developers will have to comply.
Informal instruments of the capital will certainly get expired because
of pressure from RERA. In addition to this, small and mischievous
developers will definitely get confused and caught.

38. CONCLUSION (CONTD.)
 Eventually the sector will attract global investors and
agencies. There are possibilities for home loan rates to
go down further from the current rates and due to this,
many home buyers will be part of the real estate
schemes.
 despite of few challenges being experienced in short
time, there are enormous long term opportunities hidden
in real estate sector due to increased transparency,
decrease in interest rates and involvement of affordable
agencies’ fund.

39. “Real Estate (Regulation and development)
Act (RERA) will bring transparency in real
estate sector due to Compliance with the
Time Limit of the project, Commitment to the
buyers and Cross Halter Misleading
Advertising.”
THANK YOU

40. REFERENCE
 https://housing.com › Home › Property Trends
 https://www.merarera.com/
 The Gazette of India Part 2 Section 1 Ministry of Law and Justice (Legislative and
Department): THE REAL ESTATE (REGULATION AND DEVLOPMENT) ACT 2016,
NEW DELHI, 26th MARCH 2016, LOK SABHA.