Understanding RERA: A Quick Guide on Applicability, Registration Process, and Consequences of Non-Registration
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Understanding RERA: A Quick Guide on Applicability, Registration Process, and Consequences of Non-Registration

The Real Estate Regulatory Authority (RERA), established under the Real Estate (Regulation and Development) Act of 2016, aims to safeguard home buyers and boost investments in India’s real estate sector. Passed by the Rajya Sabha on March 10, 2016, and effective from May 1, 2016, RERA seeks to bring transparency, accountability, and consumer protection to the real estate market. Initially, 52 out of 92 sections were notified, with full implementation from May 1, 2017.

Key Features of RERA:

  • Security: Developers must deposit 70% of buyers’ funds in a separate account, used exclusively for construction and land costs. They cannot demand more than 10% of the property’s cost as an advance before signing the sale agreement.
  • Transparency: Builders must submit original project documents and cannot alter plans without buyer consent.
  • Fairness: Properties must be sold based on carpet area, not super built-up area. In case of project delays, buyers are entitled to a full refund.
  • Quality Assurance: Developers must address any defects within five years of purchase, resolving complaints within 30 days.
  • Authorisation: All real estate projects must be registered with RERA, and advertisements must display a unique registration number provided by the authority.

1. Applicability of RERA

RERA applies to a broad range of real estate projects to ensure accountability and fairness:

  • Commercial and Residential Projects: RERA covers both commercial and residential real estate developments.
  • Ongoing and New Projects: All new projects and ongoing projects without a Completion Certificate (CC) as of the Act’s enforcement date (May 1, 2017) must be registered.
  • Project Size: RERA registration is mandatory for projects larger than 500 square meters or involving more than eight apartments.
  • Real Estate Agents: Agents involved in the sale of properties within RERA-registered projects also need to be registered under RERA.
  • Exemptions: Projects covering land below 500 square meters or involving fewer than eight units are exempt. Projects with a CC before May 1, 2017, are also exempt from registration.
  • Nationwide Applicability: The RERA Act is applicable in all states of India.
  • Scope: Provisions of the RERA Act apply to both residential and commercial real estate, covering apartments, buildings, and plots.

2. How to Apply for RERA Registration

Registration under RERA involves a straightforward process designed to enhance transparency:

How to Register as a Real Estate Agent

  1. Visit the RERA Delhi Website:
    • Open your browser and go to the official RERA Delhi website.
  2. Navigate to the Registration Section:
    • Locate the “Registration” tab at the top of the homepage and click on it.
  3. Choose Your Registration Type:
    • You will see three options:
      • Projects (Application by Promoter)
      • Real Estate Agent
      • Purchaser
    • Select the “Real Estate Agent”
  4. Fill in the Pre-Registration Form:
    • Enter all the required details like:
      • Name
      • Email ID
      • Address
      • Mobile number
      • Date of Birth
  5. Complete the Registration:
    • Click on the “Sign Up” button to finish the registration.

How to Register as a Promoter

  1. Go to the RERA Delhi Website:
    • Visit the official RERA Delhi website.
  2. Access the Registration Tab:
    • Click on the “Registration” tab at the top of the homepage.
  3. Select the Type of Registration:
    • Choose “Projects (Application by Promoter)” from the given options.
  4. Fill Out the Pre-Registration Form:
    • Provide the necessary details, including:
      • Name
      • Email ID
      • Address
      • Mobile number
      • Date of Birth
  5. Sign Up to Complete the Process:
    • Click on the “Sign Up” button to register.

How to Register as a Buyer

  1. Visit the RERA Delhi Website:
    • Head to the official RERA Delhi website.
  2. Click on the Registration Tab:
    • Find and click on the “Registration” tab located on the homepage.
  3. Choose Buyer Registration:
    • From the options, select “Buyer.”
  4. Complete the Pre-Registration Form:
    • Fill in the required information:
      • Name
      • Email ID
      • Address
      • Mobile number
      • Date of Birth
  5. Sign Up to Finish Registration:
    • Click on “Sign Up” to complete the buyer registration.

Documents Required for RERA Registration

Whether registering as an agent, promoter, or buyer, you must provide several essential documents:

  • Title Deed: Proof of ownership of the land or project.
  • Layout Plan: Detailed project layout showing the plan of the property.
  • Development Plans: Information on project phases and development details.
  • Sanctioned Plans: Approved construction plans from the local authority.
  • Encumbrance Details: Information about any liabilities or mortgages on the property.
  • Financial Papers: Documents such as:
    • Income tax returns
    • Cash flow statements
    • Audited financials
  • Identity Proofs:
    • PAN Card
    • Aadhaar Card

Projects that Come Under RERA

The Real Estate (Regulation and Development) Act (RERA) is applicable to various types of real estate projects, ensuring transparency and accountability in the sector. Below are key scenarios that determine whether a project falls under RERA:

  1. Projects Without a Completion Certificate (CC) Before RERA:
    • Any project that did not have a Completion Certificate (CC) before the enforcement of RERA falls under the purview of the Act. Even if construction was completed prior to RERA’s implementation, lack of a CC brings the project within RERA’s ambit.
  2. Projects Under Construction:
    • All ongoing construction projects are required to register with RERA. If a project is being developed in phases, each phase must be treated as a separate project, requiring independent RERA registration for each phase.
  3. Renovation or Repair Projects:
    • Projects solely intended for renovation, repair, or redevelopment, which do not involve marketing, selling, re-allotting, or advertising new units, are exempt from RERA registration. This exemption is only applicable if no new apartments, plots, or buildings are created or sold as part of the renovation effort.

3. Effects of Non-Registration of a Project Under RERA

Non-registration of a project can have severe consequences for developers:

Penalties:

  • Non-registration can result in a hefty fine of up to 10% of the project’s estimated cost.
  • For continuous non-compliance, the penalty can increase up to 5% of the project cost.

Prohibition on Sale and Advertising:

  • Developers cannot advertise, market, book, or sell any part of the real estate project without RERA registration, severely limiting business activities.

Consumer Complaints:

  • Buyers can lodge complaints with the RERA authority for fraudulent activities, non-compliance, or false advertisements by non-registered developers.

Imprisonment:

  • In severe cases, non-compliance can lead to imprisonment of up to three years for the promoter.

Revocation of Project Registration:

  • The project’s registration can be revoked, leading to project suspension and potential legal liabilities.

Conclusion

In conclusion, the Real Estate (Regulation and Development) Act (RERA) plays a crucial role in ensuring transparency, accountability, and consumer protection in India’s real estate sector. By mandating registration for developers, agents, and projects, RERA aims to foster a more organized and reliable real estate market. Failure to comply with RERA’s registration requirements can lead to severe penalties, legal actions, and restrictions on the sale and promotion of properties, ultimately harming the reputation and financial stability of non-compliant developers. Therefore, adherence to RERA is essential for maintaining trust and professionalism in the real estate industry.