RERA – A new area for practicing professionals
INTRODUCTION: The Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as ‘RERA’ or ‘Act’) got the presidential assent on March 25, 2017. The Act is applicable throughout the country, however, is not applicable in the state of Jammu & Kashmir.
NEEDS OF RERA: The need for RERA was arises due to following reasons:
(i) No proper information about the builders
(ii) Lack of remedies available to the buyers
(iii) Lack of transparency in projects
(iv) No value for Commitments from the builders
(v) Poor track record of timely deliveries
(vi) Fund diversions
(vii) Poor quality of work
(viii) Improper litigation conduct
In order to diminish the above problems, the Act was designed to achieve the following objectives:
(i) to establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector;
(ii) 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;
(iii) to protect the interest of consumers in the real estate sector;
(iv) to establish an adjudicating mechanism for speedy dispute redressal;
(v) to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating officers and for matters connected therewith or incidental thereto.
Apart from the above, the basic idea for enacting the Act was to:
(i) ensure accountability towards allottees and to protect their interest;
(ii) to infuse transparency, ensure fair-play and reduce frauds & delays;
(iii) to introduce professionalism and pan India standardization;
(iv) to establish symmetry of information between the promoter and allottees;
(v) to impose certain responsibilities on both promoter and allottees;
(vi) to establish regulatory oversight mechanism to enforce contracts;
(vii) to establish fast- track dispute resolution mechanism;
(viii) to promote good governance in the sector which in turn would create investor confidence.
RERA has given immense opportunity to the practising professionals such as Chartered Accountants, Cost and Management Accountants, Advocates and Company Secretaries. There are certain persons/projects (viz. Promoter, real estate agent and real estate project) for which registration under RERA is mandatory. Before understanding the process for registration of Promoter and Agent, first we need to understand the following terms:
B. Real estate Agent;
C. Real estate project.
i. Who constructs building or apartments for selling purpose
ii. Who converts existing building or apartments for selling purpose
iii. Who sell land (plots) iv. Any development authority [eg: DDA, HUDA etc.]
v. Housing Board Co-operative society
vi. Holder of power of attorney from owner to construct apartment or building or plot for sale
vii. Any other person who construct any building or apartment for sale to the general public
(2) REAL ESTATE AGENT
i. Real estate agent means any person who:
ii. Introduce buyer & seller for negotiation, whether for sale or purchase of plot, apartment or building
iii. Receive remuneration or commission or brokerage for providing services
(3) REAL ESTATE PROJECT
i. Real Estate Project means Development of building or apartment for selling purpose
ii. Converting of building (existing) for selling purpose
iii. Development of land into plot/ apartment for selling purpose
REGISTRATION PROCESS UNDER RERA: Section 3, Section 4 and Section 9 of RERA provides for registration of Promoter; Agent and Real estate Project, respectively and conditions to be fulfilled before taking such registration.
Following projects should be registered under RERA by making an application in Form-A.
(i) ON-GOING PROJECTS: It is the responsibility of the Promoter to make an application to the authority for registration within a period of 3 months of projects that are ongoing on the date of commencement of the Act and where the Completion Certificate has not been issued.
(ii) NEW PROJECTS: It is the responsibility of the Promoter to make an application to the authority for registration for all commercial or residential projects where land area exceeds by 500 Square Metres or Number of apartments exceeds by 8.
Terms before Selling of Real Estate Project:
- No advertisement, marketing, booking, selling or any invitation for purchase of plot, apartment or building by promoter in any planning area, without registering the real estate project with the Regulatory Authority;
- No registration of real estate project is required in case area of land does not exceed five hundred square meters or the number of apartments does not exceed eight inclusive of all phases;
- No registration is required where completion certificate has already been received for a real estate project prior to commencement of this Act;
- No registration is required in case of renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project.