Real Estate (Regulation and Development) Act, 2016, (RERA) a revolutionary step in the real estate sector in India.According to the preamble of RERA it is an Act intended to establish "Act to establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure sale of plot, apartment or building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating officer and for matters connected therewith or incidental thereto."
RERA is a legislation that seeks to regulate the real estate sector by imposing certain obligations on developers and it also aims at safeguarding the interests of homebuyers. RERA applies to both residential and commercial real estate projects.
One of the important aspects of RERA is that, As per S.3 of the same, "no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority". As a result of this, the public has now access to all project details, including approvals, timelines, and financial statements. Residents and buyers are entitled to access this information which intern will enable them to make informed decisions.
As per RERA, the developers will have to provide the buyers with detailed project specifications and layouts well in advance of any sale. The prior consent of the buyers are essential for making any alterations to the project's plans. As per RERA the developers are responsible for any structural defects or poor workmanship in the project for a period of five years. The developers are made accountable for project completion within the promised timeframe. These are great solace to buyers in a sector full of a lot of scams.
It is important to note that, as per RERA "shall not accept a sum more than ten per cent 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 for sale with such person and register the said agreement for sale".
There is a dispute resolution system under RERA. Buyers can approach the state-level regulatory authority, the RERA appellate tribunal etc. to seek redressal in case of disputes with developers.
RERA also provides for imprisonment as a punishment for developers who fail to comply with the regulations. S. 59 (2) of RERA reads as follows "If any promoter does not comply with the orders, decisions or directions issued under sub-section (1) or continues to violate the provisions of section 3, he shall be punishable with imprisonment for a term which may extend up to three years or with fine which may extend up to a further ten per cent. of the estimated cost of the real estate project, or with both."
As per RERA, the developer has a duty to obtain all necessary approvals before starting a project.The developers are also required to deposit a significant portion of the project's revenue in a separate account.
Therefore, RERA is a key legislation in the area of real estate, empowering the home buyers.