The Parliament introduced Real Estate (Regulation and Development) Act in May 2016; it is an act for promotion and regulation of the real estate sector to ensure that the sale of plot, apartment or building is in a transparent and competent manner. RERA Registration helps in reducing the chance of any delays and frauds in the real estate sector, and it ensures accountability and transparency.
What are the main objectives of RERA Registration?
The main objectives of RERA Registration are mentioned below:
It creates awareness by promoting governance practices in the sector.
It increases transparency and accountability towards protecting their interest.
Better standard and professionalism in place to lead smooth operations of the real estate sector.
It is reducing delays and frauds that occur in real estate contracts.
It creates specific responsibilities for both the buyer and the developer.
It introduces PAN India standardization and Professionalism.
What are the benefits of RERA Registration?
Following are the benefits of RERA Registration in India:
Timely Delivery
Before RERA, it has been seen that the builder makes false promises about the deadlines for project completion to the buyers but hardly deliver on time, which makes the buyers lose a lot of money and have to wait for years for their property. But after the enactment of RERA, the builders have to mention the estimated time in which the project will be finished and delivered to the buyer. Suppose the builder fails to deliver the project at a specified time. In that case, strict legal regulations will be imposed on builders to make sure that the construction of the proposed project runs on time, and the projects are delivered on scheduled time to the buyer. If the builder has not delivered the project on time, he/she will have to give money back to the buyer with interest.
Gives Proper Structure
Suppose the buyers find any fault or deficiency in the structure of the building. In that case, it's the developer's responsibility to repair or fix the structural fault or defects for up to five years.
No Advertisement without the registration under RERA
Without the RERA Registration, promoters are not allowed to promote or advertise any projects under the Real Estate Regulatory Authority established under this Act.
Booking Amount
The amount paid by the buyer has been reduced from 20% to 10%, which should be paid after registering the agreement for sale if the buyer fails to pay the payment thrice; the termination of the contract is permitted.
Accurate and complete project details
At the stage of construction, all builders promote or advertise their projects and define all the features of the projects. According to the bill, there can’t be any changes to a plan, and if the builder is found guilty, then the builder will be penalized by 1% from the project's cost or in some case they will face jail of up to three years.
Types of RERA Registration and Application Procedure
Below-mentioned is the two types of RERA registration and application procedure along with the required documents:
Projects (Application by Promoter):
An application project has to be made in writing in Form to the Authority for registration of the real estate project, along with following information and documents:
A certified copy of the PAN card of the promoter;
Annual report along with the liabilities,
Promoter debt to asset ratio,
Audited balance sheet,
Profit & Loss statement,
Cash flow statement,
Directors report,
Auditor’s report for the last three financial years if the auditor's annual report is not available, then the following must be submitted:
a. Audited P&L account,
b. Balance sheet,
c. Cash flow statement,
The number of open parking available in the real estate project;
The number of covered parking available in the real estate project;
Certified copy of the legal title deed verifying the title of the promoter to the property on which the project is planned along with genuine documents for chain of title with authentication and validation of such title;
Details of encumbrances on the property on which the project is planned; and also the details of any rights, interest, litigation, title, dues, and name of any party in or over such property. The non-encumbrance certificate is granted by the concerned revenue authority like Tehsildar;
In the case where the promoter is not the owner of the property on which the project is planned, the consent of the owner(s) of the property along with a copy of the registered development agreement, collaboration agreement, joint development agreement or any other relevant agreement, as per the case, entered into between the promoter and such owner and certified copies of a title and other documents verifying the title of such owner on the property on which the development project is planned;
Name, contact details, photograph, and address details of the promoter in case of an individual and the Name, contact details, photograph, and address details of the directors, partners, chairman as the case may be, and in case of other entities the above-mentioned details of the authorized person.
Real Estate Agents
Every real estate agent has to make a registration application in writing to the Authority in Form RERA-I, in triplicate, along with the below-mentioned documents:
The brief details of agent enterprise including its registered address, name, type of enterprise.
The specifics of registration (whether as a company, partnership, society, proprietorship, etc.) together with the MoA, AoA, bye-laws, etc.;
If the applicant is an individual then the name, address details, contact details, and photographs of the real estate agent, and in case of other entities the name, address details, and contact details of the partners or directors;
A certified copy of the PAN card of the real estate agent;
A certified copy of the address proof of the premise of business;
Any other information and documents, as may be specified by a set of laws.
Conclusion
With the implementation of RERA in India, it is not only limited to the homebuyers, but it also helps the developer and agents of the real estate in many ways. RERA is making the real estate sector more secure, more professional for all the builders and investors. RERA Registration helps by reducing the chance of any delays and frauds in the real estate sector, and it ensures accountability and transparency. Also, the certification of RERA provides authenticity to the promoters, and it will attract more and more buyers in the long run.