RERA - KEY FEATURES BY PROFESSOR RAMANIGOPAL VINAYAKA MISSIONS UNIVERSITY

M2K17 MAY 26
REAL ESTATE [REGULATION AND
DEVELOPMENT] ACT 2016
RERA – AWARENESS PROGRAM-I/KEY FEATURES/1©DR.C.S. RAMANIGOPAL
RERA
REAL ESTATE REGULATION AUTHORITY
REAL ESTATE REULATORY & DEVELOPMENT ACT 2016
KEY FEATURES

M2K17 MAY 26
Introduction
The Rajya Sabha passed the Real Estate Regulator Bill, which will
help regulate the sector and bring in clarity for both buyers and
developers. The Real Estate (Regulation and Development) Act,
2016 is an Act of the Parliament of India which seeks to protect
homebuyers as well as help boost investments in the real estate
industry. The bill was passed by the Rajya Sabha on 10 March 2016
and by the Lok Sabha on 15 March 2016. The Act came into force on
1 May 2016 with 69 of 92 sections notified. The Central and state
governments are liable to notify the Rules under the Act within a
statutory period of six months.[1]

M2K17 MAY 26
Real Estate Regulatory Authority: Under the Bill, the purchasers of
Real Estate units from a developer would have a specialised forum
called the “Real Estate Regulatory Authority”
will be set up within one year from the date of coming into force of the Act.
In the interim, the appropriate Government (i.e., the Central or State
Government) shall designate any other regulatory authority or any
officer preferably the Secretary of the department dealing with Housing,
as the Regulatory Authority.
The promoter has to register their project with the Regulatory Authority
before booking, selling or offering apartments for sale in such projects.
In case a project is to be promoted in phases, then each phase shall be
considered as a standalone project, and the promoter shall obtain
registration for each phase.

M2K17 MAY 26
The Registration application must disclose the following:[2]
Details of the promoter (such as its registered address, type of
enterprise such proprietorship, societies, partnership, companies,
competent authority);
A brief detail of the projects launched by the promoter, in the past
five years, whether already completed or being developed, as the
case may be, including the current status of the projects, any
delay in its completion, details of cases pending, details of type of
land and payments pending;

M2K17 MAY 26
The Registration application must disclose the following:[2]
An authenticated copy of the approval and commencement
certificate received from the competent authority and where the
project is proposed to be developed in phases, an authenticated
copy of the approval and commencement certificate of each of
such phases;
The sanctioned plan, layout plan and specifications of the project,
plan of development works to be executed in the proposed
project and the proposed facilities to be provided thereof and the
locational details of the project;
Proforma of the allotment letter, agreement for sale and
conveyance deed proposed to be signed with the allottees;
Number, type and carpet area of the apartments and the number
and areas of garages for sale in the project;

M2K17 MAY 26
70% of Realisation from Allottees in a separate bank account:
This Act obliges the developer to park 70% of the project funds in a
dedicated bank account. This will ensure that developers are not
able to invest in numerous new projects with the proceeds of the
booking money for one project, thus delaying completion and
handover to consumers.

M2K17 MAY 26
Acceptance or Refusal of Registration: Upon receipt of an
application by the promoter, the Regulator Authority shall grant or
reject the registration within a period of 30 days. Upon being granted
a registration, the promoter will be provided with a registration
number, including a login Id and password for accessing the website
of the Regulatory Authority, to create his web page and to fill in the
details of the proposed project. If the Regulatory Authority fails to
grant or reject the application of the promoter within the period of 30
days, then the project shall be deemed to have been registered.

M2K17 MAY 26
Carpet Area: Under the Bill, developers can sell units only on carpet
area, which means the net usable floor area of an apartment. This
excludes the area covered by the external walls, areas under
services shafts, exclusive balcony or verandah area and exclusive
open terrace area, but includes the area covered by the internal
partition walls of the apartment.

M2K17 MAY 26
Refund of amount in case of delay in handing over
possession: In case the promoter is unable to hand over
possession of the apartment, plot or building to the allottee (i) in
accordance with the terms of the agreement of sale; or (ii) due to
discontinuance of his business as a promoter on account of
suspension; or (iii) revocation of his registration or for any other
reason, then the promoter shall be liable, on demand being made by
the allottee, to return the amount received by him from the allottee
with interest and compensation at the rate and manner as provided
under the Act. This relief will be available without prejudice to any
other remedy available to the allottee.

M2K17 MAY 26
Real Estate Appellate Tribunal:
It will help establish state-level Real Estate Regulatory Authorities
(RERAs) to regulate transactions related to both residential and
commercial projects and ensure their timely completion and
handover. Appellate Tribunals will now be required to adjudicate
cases in 60 days as against the earlier provision of 90 days and
Regulatory Authorities to dispose of complaints in 60 days while no
time frame was indicated in earlier Bill.[3] The Appellate Tribunal
shall have the same powers as a civil court and shall be deemed to
be a civil court. An appeal against the order of the Appellate Tribunal
may be filed before the jurisdictional High Court within a period of
sixty days from the date of communication of the decision or order of
the Appellate Tribunal.

M2K17 MAY 26
Protection Of Buyers
This law makes it mandatory for developers to post all information on
issues such as project plan, layout, government approvals, land title
status, subcontractors to the project, the schedule for completion
with the State Real Estate Regulatory Authority (RERA) and then in
effect pass this information on to the consumers. [4] The current
practice of selling by ambiguous super built-up area for a real estate
project will come to a stop as this law makes it illegal. Carpet area
has been clearly defined in the law. Currently, if a project is delayed,
then the developer does not suffer in any way. Now, the law ensures
that any delay in project completion will make the developer liable to
pay the same interest as the EMI being paid by the consumer to the
bank back to the consumer. The developer cannot make any
changes to the plan that had been sold without the written consent of
the buyer.

M2K17 MAY 26
LIMIT ON RECEIPT OF ADVANCE PAYMENT
A promoter shall not accept a sum more than 10% percent[5] of the
cost of the apartment, plot, or building, as the case may be, as an
advance payment or an application fee, from a person without first
entering into a written agreement of sale with such person and
register the said agreement of sale, under any law for the time being
in force.

M2K17 MAY 26
ENFORCEMENT AND APPLICABILITY OF THE ACT
•The Act under S.84 contemplates that within six months of the
RERA Act being enforced,
•State Governments shall make rules for carrying out the provisions
of Act.
•The said Rules are to be notified by the respective State
Government.

M2K17 MAY 26
Enforcement and Applicability of The Act
On October 31, 2016, Central Government, released the Real Estate
Regulation and Development Rules, 2016, vide Notification by the
Ministry of Housing & Urban Population (HUPA). The Rules so
issued by the Central Government apply to the five Union Territories
without Legislature viz., Andaman & Nicobar Islands, Dadra & Nagar
Haveli, Daman & Diu, Lakshadweep and Chandigarh. For Delhi, the
Ministry of Urban Development is in the process of finalisation of
rules while the state governments have to notify the rules on their
own. States like Maharashtra, Andhra Pradesh, Karnataka and Tamil
Nadu tag behind in the implementation of the Rules, with their Rules
still not notified. The saving grace being that they are at the
advanced stages of finalising the Rules. Maharashtra has issued
Rules for consultation also.

M2K17 MAY 26
Penalty In Case Of Non-Compliance
Penal provisions have been prescribed under the Act against the
promoter in the event of any contravention or non-compliance of the
provisions of the Act or the orders, decisions or directions of the
Regulatory Authority or the Appellate Tribunal which include the
following:
If promoter does not register its project with the Regulatory Authority – the
penalty may be up to 10% of the estimated cost of the project as determined by the
Regulatory Authority;
In case the promoter provides any false information while making an application
to the Regulatory Authority or contravenes any other provision of the Act – the
penalty may be up to 5% of the estimated cost of the project or construction.
The maximum jail term for a developer who violates the order of the appellate
tribunal of the RERA is three years with or without a fine.

M2K17 MAY 26
Conclusion
The Bill intends to increase transparency and accountability in the
real estate sector by providing mechanisms to facilitate and regulate
the sale and purchase of commercial and residential units/projects
and timely completion of projects by the promoters.

RERA - KEY FEATURES BY PROFESSOR RAMANIGOPAL VINAYAKA MISSIONS UNIVERSITY

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RERA - KEY FEATURES BY PROFESSOR RAMANIGOPAL VINAYAKA MISSIONS UNIVERSITY