For the amount of transparency in land dealings (buying and selling), the government of India has promulgated the RERA Act in 2016. The Real Estate Regulation & Development Act was brought after a decade of real estate being tormented by powerful builders. Now, the RERA Act mandates all the ongoing and new RERA projects to register with respective RERA Authorities under Section-3 of the RERA Act. This act was enacted to address the requirements of sellers, buyers, brokers and other concerned stakeholders in the real estate industry.
The law after RERA as the guidelines of policy brings coordination between buyer and promoter. These guidelines mention several laws which are for the registration and functions of a promoter. One of the fascinating aspects of RERA also overcomes the problems which the promoters face due to the late approval of their projects by which they often force go for unfair methods to save an enormous amount of money they have invested.
Important Benefits you get after RERA Registration
There are some important benefits for RERA registration for the homebuyers as well as for the developers which are stated as below:
Benefits for Homebuyers
- Transparency: RERA has made it compulsory for developers to provide accurate project details, such as project plans, layouts, and approvals, on the RERA website. Its transparency helps homebuyers make informed decisions.
- Advance Information: Homebuyers can access information about ongoing projects, including the progress of construction, thereby ensuring they are aware of the project's status.
- Legal Recourse: In case of grievances or disputes, homebuyers can seek legal remedies by the Real Estate Regulatory Authority that is established under RERA. It provides a structured forum for dispute resolution.
- Timely Possession: RERA has specified the project completion timelines, and developers must adhere to these deadlines. It reduces the risk of project delays and ensures that homebuyers receive the properties on time.
- Quality Assurance: Developers have to adhere to quality standards and provide quality construction, as deviations can lead to penalties under RERA. It is an advantage for homebuyers to ensure that they get what they have paid for.
- Protection of Funds: Developers have to deposit a certain percentage of funds collected for a project into an escrow account. It makes sure that the funds are used for a project's development and reduces the risk of fund diversion.
- No Discrimination: RERA prohibits discrimination based on religion, caste, gender, etc., in the sale of properties, promoting inclusivity in the real estate market.
Benefits for Developers
- Credibility: RERA registration provides the credibility of a developer, as this signifies compliance with regulatory norms with commitment to transparency and quality.
- Reduced Litigation: Clear guidelines and dispute resolution mechanisms under RERA reduce the legal disputes, saving time and resources for developers.
- Access to Funds: Developers can easily access funds as homebuyers are more confident in investing in RERA-registered projects.
- Market Competitiveness: RERA promotes by ensuring that all developers adhere to the same rules, which can boost competition and innovation in the market.
- Project Completion: Developers are incentivized to complete projects on time to avoid penalties, which further lead to better project management and timely delivery.
- Improved Project Planning: Developers must disclose project details at the time of RERA registration, which helps in better project planning and resource allocation.
Documents required having RERA Registration
There are important documents required if you get registered as a developer or if you get registered as a real estate agent. The important documents required for both cases are stated below:
For Promoters (Developers)
- Application Form: The application form for RERA registration must be filled out and submitted.
- PAN Card: A copy of the promoter's Permanent Account Number (PAN) card.
- Aadhar Card: A copy of Aadhar card of the promoter.
- Photograph: Recent passport-sized photographs of the promoter.
- Address Proof: Proof of residential address of the promoter, such as a utility bill or passport.
- Incorporation Certificate: A copy of the incorporation certificate is required for companies or firms.
- Memorandum of Association (MOA) and Articles of Association (AOA): These documents are needed for companies.
- Audited Financial Statements: The audited financial statements of the last 3 years for the promoter entity.
- Project Details: Detailed information about the real estate project that includes the location, type of project (residential, commercial, etc.), number of units, carpet area of units, and the proposed start and completion date.
- Land Title Deed: Proof of title and ownership of the land on which the project is proposed.
- Sanctioned Building Plan: Copy of the approved and sanctioned building plan from the relevant authority.
- Encumbrance Certificate: This document certifies that the land is free from any legal claims or disputes.
- Project Layout Plan: A layout plan of the project showing various amenities, open spaces, and common areas.
- Legal Title of Land: Details of pending litigation related to the land.
- Affidavit: Promoters have to submit an affidavit declaring that all information provided is accurate and that they will adhere to RERA regulations.
For Real Estate Agents
- Application Form: The application form for RERA registration for real estate agents.
- PAN Card: A copy of the Permanent Account Number (PAN) card of a real estate agent.
- Aadhar Card: A copy of the Aadhar card of a real estate agent.
- Photograph: Recent passport-sized photograph of real estate agent.
- Address Proof: Proof of residential address of real estate agent.
- Registration Certificate: Registration certificate under the Registration Act, 1908.
- Affidavit: An affidavit declaring that an agent will abide by RERA rules and regulations.
Procedure for obtaining RERA Registration
RERA registration is important for developers and real estate agents these days to secure the project. So these steps need to be followed to get your project registered mention as below:
For Promoters (Developers)
- Check Eligibility: Ensure the eligibility criteria for RERA registration that typically includes having the necessary land title and financial capacity for a proposed project.
- Gather Documents: Collect all the documents and information as mentioned
- Visit the RERA Website: Go to the official website of the RERA authority of the respective state.
- Online Application: Fill out the RERA registration application form available on the website. One requires giving all the important details about the project.
- Pay Fees: Pay the required registration fee as per the RERA authority. The fee amount can vary depending on the project.
- Submit Documents: Upload all the necessary documents and information as per the requirements. Ensure the documents are complete and accurate.
- Project Details: Provide detailed information about a real estate project, including its location, type (residential, commercial, etc.), number of units, carpet area of units, and the proposed start and completion date.
- Submit Application: Once the application form is completed then attached all required documents, submit the application online through the RERA website.
- Acknowledgment: After submission, one should receive an acknowledgment of an application that will contain a unique application number.
- Verification and Approval: The RERA authority has to review the application and documents. They can ask for clarifications or additional information if required. Once satisfied with the application, they will grant RERA registration.
- Registration Certificate: Upon approval, one will receive a RERA registration certificate that is typically valid for the duration of the project's completion.
For Real Estate Agents
- Check Eligibility: Ensure that all the eligibility criteria for RERA registration as a real estate agent.
- Gather Documents: Collect all the required documents and information as mentioned
- Visit the RERA Website: Go to the official website of the RERA authority in your state.
- Online Application: Fill out the RERA registration application form for real estate agents available on the website.
- Pay Fees: Pay the required registration fee as the RERA authority specifies.
- Submit Documents: Upload all the necessary documents and information as per the requirements.
- Acknowledgment: After submission, one will receive an acknowledgment about an application containing a unique number.
- Verification and Approval: The RERA authority will review applications and documents. They can ask for clarifications or additional information if necessary. Once satisfied with the application, they will grant RERA registration.
- Registration Certificate: Upon approval, one can receive a RERA registration certificate that is typically valid for a specific period.
What are Penalties under RERA Act?
There are specific penalties mentioned under the RERA Act, some of them are here mention as under:
For Promoters (Developers)
- Penalty for Non-Registration: If a promoter fails to register a real estate project with the state's RERA authority, they can be penalised up to 10% of the project's estimated cost.
- Misrepresentation of Information: If a promoter gives false or misleading information in the project RERA registration or advertising materials, they have to face penalties.
- Project Delays: If the developer does not complete the project on time and fails to provide possession to buyers as per the agreed-upon schedule, they become liable to pay compensation to the allottees.
- Advance Withdrawal: If a developer withdraws from a project without the homebuyers' consent, they can refund the entire amount with an interest.
- Quality Deficiency: In cases of poor construction quality or substandard materials used, the promoter will be required to rectify the defects or compensate the buyers for the cost of repairs.
- Fund Diversion: If a promoter diverts funds collected for a specific project to other purposes, they have to face penalties and even imprisonment.
- Failure to Maintain Escrow Account: Developers are required to maintain a separate escrow account for each project.
For Real Estate Agents
- Penalty for Non-Registration: A real estate agent can be penalised if they fail to register with the respective state's RERA authority.
- Misrepresentation of Information: Real estate agents providing false information can face penalties.
- Failure to Maintain Records: Agents are required to maintain records of all transactions.
- Violation of Duties: If an agent fails to perform their duties as per the RERA Act, they can face penalties.
- Failure to Comply with RERA Orders: Non-compliance with orders and directives issued by the RERA authority can result in penalties.
- Unauthorised Advertising: Agents must not advertise projects that are not registered under RERA. Violation of this rule can lead to penalties.
Who Are Exempted From RERA Registration?
The below mentioned are exempted from the registration of real estate projects:
- When the area of land to be developed does not exceed to 500 sq.m or the number of apartments developed does not exceed to 8 apartments, including all the phases are exempted from RERA Registration Process.
- When the promoter has received the completion certificate for a real estate project before the commencement of the RERA Act , is exempted from registration.
- The real estate projects to be remodelled or replaced or development of projects are those that don't need to be advertised, marketed, sold, or new allotment of an apartment.
How Startupfino Professional helps you?
StartupFino is one platform that coordinates to fulfil all legal and financial requirements and connect you to the professionals. Yes, our clients are pleased with our legal service! This is how we assist you on RERA Registration:
- Prepare Required Documents: We gather and prepare all the necessary documents and information required for the RERA licence application.
- Application Submission: We submit your application for a RERA licence to the relevant authority in your area. The application process may involve filling out forms, paying application fees, and providing the necessary supporting documents.
- Compliance: Ensure that your real estate business or project complies with all the legal requirements and standards set by RERA.
- Follow-Up and Compliance Reporting: After obtaining the RERA licence, you will likely need to regularly report project progress, financial details, and other relevant information to maintain compliance with RERA regulations.
- Consult with Experts: Our professionals can guide, streamline the application process, and ensure you meet all the requirements.