RERA Rules in India – Fees, Key Provisions

Here in this post, we will tell you about RERA rules in India. The Real Estate Regulation and Development Act (RERA) is a law enacted by the Indian Parliament in 2016 to regulate the real estate sector in India. The main objective of RERA is to protect the interests of homebuyers and promote transparency and accountability in the real estate industry. It seeks to ensure the timely delivery of projects, prevent fraudulent practices, and establish a framework for resolving disputes between buyers and developers. RERA has brought significant changes to the real estate sector in India and has been hailed as landmark legislation in the country’s real estate history.

Also Read: RERA Registration for Brokers

Key Provisions of RERA

The key provisions of RERA include the following:

1. Registration of Real Estate Projects and Real Estate Agents: Developers are required to register all new and ongoing real estate projects with the regulatory authority. Real estate agents are also required to register themselves with the regulatory authority.
2. Obligations of Promoters and Real Estate Agents: Promoters are required to disclose all information related to the project, including details of the land, approvals, and timeline for completion. They are also required to maintain a separate bank account for each project and use the funds only for that project. Real estate agents are required to provide all information related to the project to buyers and cannot make any false claims.
3. Establishment of Real Estate Regulatory Authority: RERA establishes a regulatory authority in each state to oversee the implementation of the Act. The regulatory authority has the power to impose penalties and order compensation in case of violations.
4. Penalties and Compensation: RERA provides for penalties and compensation in case of non-compliance with the provisions of the Act. Promoters can be fined up to 10% of the project cost or can face imprisonment for up to three years. Buyers can claim compensation for any loss incurred due to a violation of the provisions of the Act.

These provisions aim to promote transparency and accountability in the real estate sector and ensure that buyers are protected from fraudulent practices.

Also Read: Is RERA registration required for plots

Registration and Obligations of Real Estate Agents

Under the Real Estate (Regulation and Development) Act (RERA) in India, real estate agents are required to register themselves with the respective state’s RERA authority. Here are some of the registration and obligations of real estate agents under RERA:

1. Registration: Real estate agents who want to operate in the real estate sector are required to register themselves with the respective state RERA authority. They need to provide details of their business, including the name of the company, registered address, and details of their directors or partners.
2. Disclosure of Information: Real estate agents need to disclose all the information related to the project to the buyers. This includes information about the land title, approval status, layout plan, and schedule of execution. Real estate agents are required to provide this information to the buyers before they make any payment.
3. Advertisements and Marketing: Real estate agents cannot advertise or market any real estate project without getting the necessary approvals from RERA. They cannot make any false promises or misleading statements about the project.
4. Agreement and Registration: Real estate agents must ensure that the builder has registered the project with RERA before they enter into any agreement with the buyer. They are required to get the agreement between the builder and the buyer registered with RERA within 90 days of signing the agreement.
5. Maintaining Books of Accounts: Real estate agents are required to maintain books of accounts and other documents related to their business. They need to preserve these documents for a period of five years.
6. Non-compliance: If a real estate agent fails to comply with any of the obligations under RERA, they may be liable to pay the penalty. In severe cases, their registration may be canceled.

In conclusion, RERA has brought significant changes in the real estate sector by bringing transparency and accountability. Real estate agents are an essential part of this ecosystem, and it is crucial for them to comply with RERA regulations to ensure that they provide ethical and transparent services to their clients.

Registration and Obligations of Real Estate Projects

Real estate projects in India are required to register with the Real Estate Regulatory Authority (RERA) under the Real Estate (Regulation and Development) Act, 2016. Here are some of the registration and obligations of real estate projects under RERA:

1. Registration: A real estate project with a minimum of eight apartments or 500 sq. mts of land needs to register with RERA before advertising, marketing, booking, or selling any apartment or plot in the project. The developer needs to provide all the necessary details and documents related to the project, including the layout plan, land title, building plan, approvals, etc.
2. Timely Completion: The developer must complete the project on time as per the agreement. RERA mandates that the developer must specify the project completion date in the agreement, and they cannot change the date without the prior consent of the buyer.
3. Advertisements and Marketing: The developer cannot advertise or market any real estate project without getting the necessary approvals from RERA. They cannot make any false promises or misleading statements about the project.
4. Deposit of 70% of the amount: Developers are required to deposit 70% of the amount received from buyers in an escrow account within 15 days of receipt. This deposit is to ensure that the funds are utilized for the project’s construction and not diverted for other purposes.
5. Consent of buyers: Before making any changes to the plan or design of the project, the developer needs to obtain the consent of at least two-thirds of the buyers.
6. Transparency: Developers need to provide complete and accurate information about the project, including the status of the project, construction updates, approvals, etc., to the buyers.
7. Structural Defects: In case of any structural defects or deficiencies found in the project, the developer needs to rectify them at their own cost within the specified time period.
8. Refund of Amount: If the developer fails to complete the project on time, the buyer has the right to cancel the agreement and seek a refund of the amount paid.
9. Establishment of Complaint Redressal Mechanism: The developer is required to establish a complaint redressal mechanism to address the grievances of the buyers.

In conclusion, RERA has brought significant changes in the real estate sector by bringing transparency and accountability. The registration and obligations of real estate projects under RERA are to ensure the timely delivery of projects, protect the interests of buyers, and bring transparency to the real estate sector.

Rights of Homebuyers under RERA

RERA provides several rights to homebuyers, including:

1. Transparency and Disclosure: Developers are required to disclose all information related to the project, including the land title, approvals, project layout, and timeline for completion. Buyers have the right to know all the details of the project before making a purchase.
2. Protection against Fraudulent Practices: RERA aims to protect homebuyers from fraudulent practices such as misleading advertisements, false promises, and diversion of funds. Developers are required to use the funds collected from buyers only for the specific project and are not allowed to use them for any other purpose.
3. Timely Delivery of Projects: RERA ensures that developers complete the projects on time. In case of delay, buyers are entitled to claim compensation for any losses incurred.
4. Quality of Construction: RERA mandates that developers use standard construction materials and follow quality standards. Buyers have the right to demand construction and can seek compensation for any defects or poor-quality work.

These rights empower homebuyers and give them the confidence to invest in the real estate sector. It ensures that buyers are not exploited and are treated fairly by the developers.

Implementation of RERA Rules in India

The implementation of RERA in India has been a mixed bag. While the Act has brought about significant changes in the real estate sector, there have been challenges in its implementation. Some of the challenges faced in implementing RERA include the following:

1. Lack of Awareness: Many buyers and developers are still not aware of the provisions of RERA, which has led to non-compliance and violations of the Act.
2. Delay in Establishment of Regulatory Authorities: Some states have delayed the establishment of regulatory authorities, which has resulted in a lack of enforcement of the provisions of the Act.
3. Inadequate Resources: Some regulatory authorities do not have adequate resources to enforce the provisions of RERA effectively.
4. Resistance from Developers: Some developers have resisted the implementation of RERA and have challenged its provisions in court.

Despite these challenges, RERA has had a significant impact on the real estate sector in India. The Act has brought transparency and accountability to the sector and has led to an increase in consumer confidence. The Act has also brought about a change in the mindset of developers, who are now more focused on the timely delivery of projects and quality construction.

RERA Fees in India

RERA fees in India vary from state to state and depend on the type and size of the project. Some of the common fees charged under RERA include:

1. Registration Fees: Developers are required to pay registration fees for each project that they register with the regulatory authority. The fees vary from state to state and can range from a few thousand rupees to lakhs of rupees.
2. Renewal Fees: Developers are required to renew their registration every year until the project is completed. The renewal fees are generally lower than the registration fees.
3. Penalty Fees: Developers who violate the provisions of RERA are liable to pay penalty fees. The penalty fees can range from 5% to 10% of the project cost, depending on the nature and severity of the violation.
4. Other Fees: Some states also charge other fees, such as application fees, processing fees, and inspection fees.

It is important for developers to understand the fees charged under RERA and factor them into their project costs. Buyers should also be aware of the fees charged by developers to ensure that they are not being overcharged. The fees charged under RERA are aimed at promoting transparency and accountability in the real estate sector and ensuring that developers comply with the provisions of the Act.

Conclusion: RERA Rules in India

This is the end of this post which is about RERA Rules in India. However, RERA has brought about significant changes in the real estate sector in India. The Act has brought transparency and accountability to the sector and has led to an increase in consumer confidence. It has empowered homebuyers with rights and protection against fraudulent practices. While there have been challenges in the implementation of RERA, the Act has had a positive impact on the real estate sector in India. The fees charged under RERA are aimed at promoting compliance with the provisions of the Act and ensuring that developers deliver projects on time and with quality. Overall, RERA has been a landmark legislation in the history of the Indian real estate sector and has set the foundation for a more transparent and accountable sector.

FAQ (RERA Rules in India)