RERA

The Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted by the Indian government to regulate the real estate sector, protect homebuyers, and promote transparency and accountability in real estate transactions. It came into effect on May 1, 2017. Moreover, it has transformed the real estate landscape across India, and consulting a RERA lawyer in India ensures complete legal compliance and guidance.

Key Objectives of RERA

Regulation and Transparency – To establish a regulatory authority for the real estate sector.
Additionally, this ensures fair practices among developers and buyers.
Protection of Homebuyers – Ensures that real estate developers adhere to promised timelines and project specifications.
Furthermore, it safeguards the financial interests of homebuyers.
Accountability of Builders and Developers – Prevents project delays and fraudulent practices.
Uniformity in Transactions – Standardizes sales agreements, carpet area calculations, and payment structures.

Key Provisions of RERA

1. Mandatory Registration of Real Estate Projects (Section 3-4)
   Developers must register their projects with the RERA authority before advertising or selling units. Otherwise, failure to register can lead to penalties, including fines up to 10% of the project cost or imprisonment for up to three years.

2. Protection of Buyer’s Investment (Section 4(2)(l)(D))
   70% of the funds received from homebuyers must be deposited in a separate escrow account and used only for construction and land costs. Thus, misuse of buyer funds is effectively prevented.

3. Project Delays and Compensation (Section 18)
   If a developer fails to deliver a project on time, buyers can:
   Withdraw from the project and get a full refund with interest.
   Continue with the project and receive compensation for delays.
   Consequently, builders are more cautious about timelines.

4. Standardization of Carpet Area (Section 2(k))
   The act defines “Carpet Area” as the net usable area of an apartment (excluding walls, balconies, and common areas), preventing misleading advertisements. In addition, it ensures clarity for buyers.

5. Advance Payment Restriction (Section 13)
   A promoter cannot demand more than 10% of the total cost of the apartment/villa as an advance or booking amount before signing a sale agreement. Hence, buyers are protected from unfair payment demands.

6. Establishment of Real Estate Regulatory Authorities (Section 20)
   State RERA Authorities oversee real estate transactions and resolve disputes. Moreover, they monitor ongoing projects for compliance.

7. Real Estate Appellate Tribunal (Section 43)
   If a buyer is dissatisfied with RERA’s decision, they can appeal to the Real Estate Appellate Tribunal (REAT). Therefore, it provides an additional layer of justice with the support of a RERA lawyer in India for effective representation.

Penalties Under RERA

Non-registration of a project → Fine up to 10% of the estimated project cost.
False information in project registration → Fine up to 5% of project cost.
Delay in project completion → Interest payment to buyers.
Non-compliance with RERA orders → Fine or imprisonment (up to 3 years).

Impact of RERA

Increased buyer confidence in real estate transactions.
Reduction in project delays due to strict regulations.
 More transparency in property dealings and pricing.
Fair contract terms preventing developer manipulation.
Overall, RERA has made the real estate sector more organized, transparent, and buyer-friendly.