iProp91

Request a call

Frequently Asked Questions (FAQs) – The Real Estate (Regulation and Development) Act, 2016

1. What is RERA

The Real Estate (Regulation and Development) Act, 2016 (“RERA”) was enacted to bring fairness and transparency to the real estate sector in India. It was enforced on 1st May 2016 and came into full force on 1st May 2017. RERA is applicable only on under construction projects. It was introduced to address several challenges and issues that homebuyers faced while purchasing properties. Before RERA, many buyers experienced difficulties such as delays in project completion, misleading information from developers, and lack of accountability in the real estate industry. RERA was thus enacted to protect the interests of homebuyers and promote a more trustworthy and regulated environment for real estate transactions. It aims to ensure that developers provide accurate information about their projects, use funds responsibly, and complete construction on time.

2. What are the objectives of RERA?

RERA was set up keeping the following objectives in mind:

For Regulation of real estate sector
To promote transparency and reduce red tape in the sale of real estate projects and plans
To protect the consumers’ interests in the real estate sector
To establish an adjudging authority that speeds up the dispute settlement process
To create an Appellate Tribunal that hears appeals based on the decisions, directions or orders of the RERA

3. Does RERA apply to every property?

There are some exemptions provided by the act as well on which provisions of RERA do not apply:

if the plot size does not exceed 500 square meter and number of apartments proposed to be developed are under 8
if promotor received completion certificate before the commencement of the RERA Act
any redevelopment project which does not involve marketing or selling any property under the project.

4. What are the key provisions of RERA?

Under RERA, several key provisions are in place to prevent promoters from delaying the handover of real estate projects. These provisions ensure accountability and timely delivery, safeguarding the interests of homebuyers. Here are the key provisions aimed at preventing delays:

Registration Requirements: RERA mandates that promoters must register their real estate projects with the Real Estate Regulatory Authority before inviting anyone to purchase properties. For ongoing projects without a completion certificate, registration must occur within three months of the Act's commencement.
Escrow Account: Promoters are required to deposit seventy percent of the funds collected from allottees into a separate escrow account. This account is designated solely for covering the project's construction costs and land expenses. Withdrawals from this account are permitted only in proportion to the project's completion, certified by qualified professionals.
Quarterly Project Updates: Promoters must regularly update project information, including registration status, apartment bookings, and project progress, on the RERA website for public viewing. This transparency ensures that stakeholders are informed about the project's status.
Compulsory Registration Number: Promoters must include their registration number in all project advertisements and prospectuses. This requirement enhances transparency and allows buyers to verify a project's regulatory compliance.
Completion and Occupancy Certificates: It is the duty of the promoter to obtain both completion and occupancy certificates for the project. These certificates validate that the construction is finished according to approved plans and that the building is fit for occupation.
Warranty and Rectification: Promoters are obligated to rectify any structural defects, workmanship issues, or deficiencies in services within thirty days of notification by the allottee. Failure to do so within the stipulated timeframe entitles the allottee to compensation.
No Transfer of Project without Consent: Promoters cannot transfer majority rights and liabilities of a real estate project to a third party without obtaining prior written consent from two-thirds of the allottees. This provision prevents promoters from transferring projects to entities that may not uphold contractual obligations.

5. What are the benefits of RERA to the property owners and homebuyers?

RERA offers numerous benefits to property owners and homebuyers.

Firstly, it ensures transparency within the real estate sector by requiring developers to provide detailed information about their projects, such as approvals and timelines. This transparency allows owners to make informed decisions about their investments.
Secondly, RERA protects the rights of property owners by compelling developers to deliver properties according to agreed-upon specifications and sale agreement for quality standards, and timelines.
Promoters are not allowed to receive more than 10% of the advanced money from the buyers for the concerned real estate project before entering into a sale agreement. If there are any deviations or delays, owners can seek recourse through RERA authorities.
RERA mandates developers to deposit 70% of project funds into a separate escrow account, discouraging fund diversion and promoting timely project completion, which ultimately reduces delays for property owners.
RERA holds developers accountable for the quality of construction for five years after possession, ensuring that property owners are shielded from structural defects.
RERA also establishes mechanisms for quick dispute resolution through establishment of appellate tribunals in every state streamlining the process for addressing conflicts between property owners and developers.

6. Who is a promoter under RERA?

All private and public bodies that develop real estate projects which are meant for sale fall under the ambit of this act. The act states that the person who constructs or causes to be constructed, a particular property shall be considered to be the promoters and be jointly responsible for their roles and responsibilities.

7. Can a real estate developer exit the project mid-way by selling to another developer or party?

While a developer is allowed to sell the project to another investor he can do so only by taking written approval of 2/3rd of project’s consumers and also the prior approval of the RERA. Again, if a consumer or his family or by other means holds more than one unit in a project he is considered as one consumer only. Also, the RERA needs to be informed of such sale and the developer who is buying then assumes all the rights and liabilities as the previous promoter of the project (including project delivery timelines and other such matters).

Thanks for using iProp91! We value your views and independence to express your views on this platform. However, we also value the sentiments and thoughts of your fellow users and in the interest of everyone on this platform, we expect you to adhere to the following guidelines at all times while using this platform. In case of any questions, please write us on info@iprop91.com

1. Hate Speech and Discrimination:

Do not post content that promotes discrimination, hatred, or violence based on race, ethnicity, gender, religion, disability, sexual orientation, or any other characteristic.
Avoid using derogatory language and slurs that may offend or harm other users of this platform.

2. Harassment and Bullying:

Refrain from engaging in or endorsing any form of online harassment, bullying, or intimidation.
Report incidents of harassment promptly and assist in creating a supportive online community.

3. Graphic or Violent Content:

Do not share graphic or violent content that may disturb or harm others.
Exercise sensitivity when sharing content that involves tragedy or crisis situations.

4. Misinformation and Fake News:

Verify information before sharing to prevent the spread of misinformation.
Refrain from intentionally spreading false or misleading content.

5. Privacy Violations:

Respect the privacy of others and avoid sharing personal information without consent.
Be cautious about sharing your own sensitive information online.

6. Spam and Scams:

Do not engage in spamming activities or share content intended to deceive or defraud others.
Report and block suspicious accounts to help maintain a secure online environment.

7. Copyright Infringement:

Avoid posting content that infringes on the intellectual property rights of others, including copyrighted material.
Give proper credit when sharing content created by others.

8. NSFW (Not Safe For Work) Content:

Refrain from posting explicit or sexually suggestive content, unless allowed by the platform's community guidelines.

9. Impersonation:

Do not create fake accounts or impersonate others to deceive or harm users.
Report accounts that engage in impersonation or identity theft.

10. Illegal Activities:

Do not promote or share content related to illegal activities, including but not limited to drug trafficking, violence, or terrorism.
Report any illegal activities or content to the appropriate authorities.

11. Respectful Communication:

Engage in respectful and constructive conversations, even when disagreeing with others.
Avoid using offensive language or engaging in personal attacks.

12. Platform-Specific Rules:

Familiarize yourself with the specific rules and community guidelines of iProp91.

We believe these guidelines provide a foundation for a positive and inclusive online community. iProp91 reserves the right to delete comments that violate any of these Guidelines. Comments that violate these Guidelines, but also offer valuable contributions may be edited by iProp91 team. Keep in mind that information posted on this platform may be available for all to see, and comments are subject to defamation, antitrust, privacy, and other laws. iProp91 reserves the right to remove any comments for any reason at any time.