RERA Act 2016

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Context: The Ministry of State for Housing and Urban Affairs presented the implementation status of RERA Act in the Rajya Sabha.

Details

• As per the latest data, 28 States/ Union Territories (UTs) have set up Real Estate Appellate Tribunal and 30 States/UTs have set up the Real Estate Regulatory Authority under Real Estate (Regulation & Development) Act, 2016 (RERA).
• RERA ensures to protect the interest of homebuyers by regulating and promoting the Real Estate Sector in a transparent and accountable manner.
• In order to provide last mile funding to stalled real estate projects which are registered under RERA, a Special Window for Affordable and Mid Income Housing (SWAMIH) Investment Fund of Rs. 25,000 Crore has been created.

About Real Estate (Regulation and Development) Act, 2016

• The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry.
• Registration of Real Estate Agents: RERA mandates prior registration of Real Estate Agents with the Real Estate Regulatory Authority who are willing to facilitate the sale or purchase of any plot, apartment or building in a real estate project registered under RERA.
• Transparency to the buyers: The promoter shall create his web page on the website of the Authority and enter all details of the proposed project for public viewing such as details of registration granted by Authority, quarterly up-to-date status of the project etc.
  • The buyers can stay updated about the status of the project just by visiting and checking the website of the authority.
• Compensation to the buyers: If the promoter fails to complete or is unable to give possession of an apartment, plot or building in accordance with the terms of the agreement for sale or due to discontinuance of his business as a developer for any reason, then the buyer has two options:
  • The buyer can withdraw from the project and shall get refund of the full amount paid in advance to the promoter along with interest
  • He/She shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession.
  • Thus, the promoter is required to provide timely possession of the apartment, plot or building to the buyer, failure of which will cause additional costs on the part of the promoter.
• Carpet Area Defined: “Carpet area” means the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment.
  • The price of the property depends on the Carpet area.
  • With a clear definition of Carpet Area now, builders and developers cannot use their own method of calculation.
• No Diversion of funds: The promoter has to make sure that 70% of the amounts realised for the real estate project from the allottees, shall be deposited in a separate account to cover the cost of construction and the land cost and shall be used only for that project which shall be withdrawn to cover the cost of the project.
• Grievance Redressal: Any aggrieved person may file a complaint with the Real Estate Regulatory Authority or the adjudicating Officer, for any violation or contravention of the provisions of this Act.
  • Any person aggrieved by any decision or order of the Appellate Tribunal, may, file an appeal to the High Court. No appeal shall lie against any decision or order made by the Appellate Tribunal with the consent of the parties RERA provides sound grievance Redressal policy to promoters, real estate agents and buyers.

Key Features of the Act

• The Act establishes a Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute resolution.
• The Act enlists the registration policy of a real estate project and real estate agent.
  • The Act makes it mandatory for all real estate projects to register with RERA for launching a project to provide greater transparency in project marketing and execution.
  • Each State RERA must either approve or reject the application for registration within 30 days from the date of application submitted by the promoter.
• The Act established state-level Real Estate Regulatory Authorities 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 and Regulatory Authorities to dispose of complaints in 60 days.

Significance of RERA Act

• Ensure accountability towards allottees (buyers) and protect their interest.
• Infuse transparency, ensure fair-play and reduce frauds & delays.
• Introduce professionalism. Establish regulatory oversight mechanisms to enforce contracts.
• Establish symmetry of information between the promoter and allottee.
• Imposing certain responsibilities on both promoter and allottees
• Establish a fast- track dispute resolution mechanism.
• Promote good governance in the sector which in turn would create investor confidence.

https://www.pib.gov.in/PressReleasePage.aspx?PRID=1810454