THE REAL ESTATE REGULATION ACT (RERA)
The Real Estate (Regulation and Development) Act, 2016 is an Act that has been passed by the Parliament of India which seeks to protect the interest of home-buyers as well as help in boosting investments in the real estate industry.
RERA received the assent of the President on 25th March 2016. The entire act has been divided into various sections which were notified by S.O. dated in April 2016 and has been issued by the Ministry of Housing and Urban Poverty Alleviation.
The following is the overview of the division of sections:
- Section 2 – Definitions
- Section 20 – 39 – Chapter V – Real Estate Authority
- Section 41 – 58 – Chapter VI – Central Advisory Council and Chapter VII – Real Estate Appellate Tribunal and Appeal to High Court
- Section 71 – 78 – Powers to Adjudicate(Section 71 and 72)
- Section 3 to 19 – Registration of Real Estate Project and Real Estate Agent (Section 3 to 10).
- Functions and Duties of Promoters ( Section 11- 18)
- Rights and Duties of Allottees (Section 19)
- Section 59 – 70 – Offences, Punishments, and Adjudication
- Section 79 – 80 – Bar of Jurisdiction and Cognizance of Offences
Karnataka has issued the Karnataka Real Estate ( Regulations and Development) Rules, 2016 under the powers conferred under Section 84 of the Real Estate (Regulations and Development) Act, 2016.
The other states that have notified Real Estate Rules are Uttar Pradesh, Gujarat, Odisha, Andhra Pradesh, Maharashtra, Madhya Pradesh, Bihar, the National Capital Territory of Delhi, and the Union Territory of Chandigarh
OBJECTIVES OF THE ACT
- To ensure transparency and efficiency of the sale of a plot, apartment, building, or real estate project.
- To protect the interest of the consumers in the real estate sector by providing an adjudicating mechanism for speedy dispute redressal.
- Providing severe penalties for contravention of the provisions of the Act by the promoters.
- Providing measures to ensure that enough funds are retained by the promoters to be fully dedicated to the Real Estate Project to ensure timely completion.
- To provide uniformity by standardization of procedures and documentation in the Real Estate Sector.
- To ensure that the status of the Project is uploaded by the Promoters on the website of the Authority regularly for information to the general public and the Allottees.
The application for the registration of a real estate project has to be filed by the Promoter in a prescribed manner as per the provisions of the Act. The following group of people is entitled to obtain RERA Registration:
- Development Authority
- State cooperative society or primitive cooperative housing society
- The person holding Power of Attorney
REVOCATION OF REGISTRATION– SECTION 7
- Registration can be revoked by the authority on receipt of complaint or suo moto if the promoter has defaulted in complying with the rules and regulations made under the act or if he violates the terms and conditions of approval.
REGISTRATION OF REAL ESTATE AGENTS – SECTION 9
- Real estate agents to compulsorily obtain registration for marketing a real estate project registered under Section 3 of the act.
- Authority can grant single registration for the entire State or Union Territory.
- Every registration is valid for such period as may be prescribed and on payment of the prescribed fee.
TRANSFER OF TITLE – SECTION 17
Promoter to execute registered Conveyance Deed :
- Of the unit in favor of the allottee,
- Of the undivided proportionate title in the common area to the Association of Allottees / the competent authority as the case may be.
Promoter to hand over possession of the units to the allottee and common area to the association within three months from the issue of the Occupancy Certificate.
RETURN OF AMOUNT AND COMPENSATION – SECTION 18
- If the promoter fails to complete or is unable to give possession of the unit to the allottees as per the terms of the agreement or due to discontinuance of business or on account of suspension or revocation of registration under the act, he shall return the amount received from the allottees towards the unit with interest at such rate as may be prescribed in case the allottee wishes to withdraw from the project.
The rights and duties of Allottees have been mentioned under SECTION 19 of the Act as under:
The allottees shall be entitled to:-
- obtain all relevant information related to the project
- To know about the stage-wise schedule of completion
- To claim possession of the unit
- To claim a refund of the amount paid along with interest
- To have the necessary documents and papers after obtaining physical possession of the unit
The allottees shall be responsible:-
- For timely payment of the amounts as per agreement of sale
- For payment of interest in case of delayed payments
- To participate in the formation of the association of the allottees
- To take physical possession of the unit within two months of the issue of the Occupancy Certificate
- To participate in the registration of the conveyance deed of the unit.
REAL ESTATE REGULATORY AUTHORITY – SECTION 20
The Government shall, within a period of One Year from the date the Act comes into force establish an Authority – will be known as Real Estate Regulatory Authority.
The Appropriate Authority shall be a Body Corporate with the power to acquire and dispose of the property in its own name, capable of being sued and to sue.
Functions of the Authority – Section 34
a) to register and regulate real estate projects and real estate agents registered under this Act;
(b) to publish and maintain a website of records, for public viewing, of all real estate projects for which registration has been given, with such details as may be prescribed, including information provided in the application for which registration has been granted;
To discharge its functions under the provisions of the act the authority has the power to issue Interim orders under Section 36 and can issue such directions from time to time, to the promoters or allottees, or real estates agents under Section 37 of the Act.
CENTRAL ADVISORY COUNCIL – CHAPTER VI- SECTION 41
(1) The Central Government may, by notification, establish with effect from such date as it may specify in such notification, a Council to be known as the Central Advisory Council.
(2)The Minister to the Government of India in charge of the Ministry of the Central Government dealing with Housing shall be the ex officio Chairperson of the Central Advisory Council.
(3)The Central Advisory Council shall consist of representatives of various Ministries and Housing Boards, Five Representatives of the Real Estate Regulatory Authority to be selected by rotation, and any other Central Government Department as notified.
Functions of Central Advisory Council – Section 42
(1) The functions of the Central Advisory Council shall be to advise and recommend the Central Government,—
(a) on all matters concerning the implementation of this Act;
(b) on major questions of policy;
(c) towards the protection of consumer interest;
(d) to foster the growth and development of the real estate sector;
(e) on any other matter as may be assigned to it by the Central Government.
REAL ESTATE APPELLATE TRIBUNAL – CHAPTER VII- SECTION 43
- The Appropriate Government shall within one year from the date of coming into force of this Act establish the Real Estate Appellate Tribunal
- The government may establish one or more benches of the Appellate Tribunal in the State/ Union Territory whenever it deems necessary. Every bench shall consist of at least one Judicial Member and one Administrative or Technical Member.
- Provided, during the transition period any Appellate Tribunal functioning under any law for the time being in force shall be designated to hear appeals under this act. Consequently when the relevant Appellate Tribunals are established the appeals would stand transferred to such Appellate Tribunals.
BAR OF JURISDICTION – SECTION 79
No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court.
As per the provisions of the Real Estate (Regulation and Development) Act (RERA), complaints can be registered under Section 31 of the Act. Complaints can be filed against developers, builders, and agents with the regulatory authority or the adjudicating officer.
It is mandatory for a homebuyer who wishes to register a complaint against the builder to have the following mentioned details:
- Details such as name, address, etc.
- Registration number of the project and the address where it is situated.
- The response of the builder.
- The relief or prayer the homebuyer is requesting.
A buyer may file a complaint with the RERA Authority for any violation or contravention of the provisions of the RERA Act by a builder, developer, promoter, or real estate agent. The following are conditions under complaint can be filled:
- Delay in Possession: If a builder delays delivery of possession of the property, the buyer can file a complaint against the builder to get immediate delivery of possession or get a full refund along with interest.
- False Advertisement: A complaint can be filed against the developer, promoter, and even the endorsers if false advertisements misled a buyer based on which he/she decided to deposit a sum with the promoter.
- Advance Payment: A builder can ask for only up to 10% of the cost of the building, apartment, or plot as advance payment. If a builder asks for more than 10%, the buyer can file a complaint against the builder.
- Improper Registration of a Project: All projects must be registered under RERA. If a builder has sold or is trying to sell an unregistered project, the buyer can file a complaint against the builder.
- No details about the Project: All details regarding the project including project plan, layout, and government approvals need to be updated on the RERA website. One can file a complaint if a builder or developer doesn’t adhere to this provision.
- Structural Defects: In case of any structural defects in the workmanship and quality of the services, the promoter will have to compensate the amount paid by the allottee. If not compensated, the buyer can file a complaint.
- Ownership Transfer: A promoter cannot transfer majority rights to any third party. In case he/she is found transferring majority rights to a third party without the consent of the two-third majority of allottees, one can file a complaint.
The buyer has to file a RERA complaint form along with the requisite fee to register his/her complaint. The following given steps have to be followed to file a complaint under RERA:
- One can file a RERA complaint form along with the requisite documents and the fee before a RERA or an adjudicating officer.
- Once the authorities receive the complaint, they constitute an inquiry bench to hear both the parties involved.
- The matter is typically settled within 60 days of the filing of the complaint.
Many states like Gujarat, Maharashtra, and Karnataka now provide online complaint filing under RERA. The method of filing an online complaint almost remains the same in most states. However, the procedure and applicable fees are different.
To register a RERA complaint online in Gujarat, a complainant must comply with the following steps:
- Go to the Gujarat RERA portal. On the home page, there will be a link for complaint registration.
- Once you click on the link, you will be redirected to another page to provide relevant details of the complaint. These details are the same as one would provide in a physical complaint.
- After filling in the personal details like name, address, contact details, etc., there will be an option for the complainant to attach supporting documents.
- The complainant must pay a registration fee of Rs.1000 to be able to submit the complaint. One can avail of any net banking or mobile banking facility for payment. After payment, one has to click the Submit button to successfully register the complaint.
Lastly, it can be said the RERA has turned out to be successful in achieving and adapting to various changes in the real estate sector. The main objective for which this act has been enacted for protecting the interest of homebuyers and boosting growth and investment in the real estate sector. For all online portal complaints, once a complaint is successfully registered, both the parties would be called to express their facts and figures surrounding the dispute. The RERA will listen to both parties and will give a verdict on the merits of the case. The aggrieved party would be given the option to challenge RERA’s decision if they are not satisfied with such an order. The aggrieved party must challenge RERA’s decision before the High Court.
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