Frequently Asked Questions about RERA Compliance in India
1. What is RERA?
RERA stands for Real Estate (Regulation and Development) Act. It is an Indian legislation enacted in 2016 to regulate the real estate sector and protect the interests of homebuyers. The main objective of RERA is to promote transparency, accountability, and efficiency in the real estate industry.
2. Why was RERA introduced?
RERA was introduced to address the challenges faced by homebuyers in dealing with unfair practices prevalent in the real estate sector. The act aims to ensure timely completion of projects, safeguard buyer's rights, prevent fraudulent activities, and establish a regulatory framework for real estate developers and agents.
3. What are the key provisions of RERA?
Some key provisions of RERA include compulsory registration of real estate projects with the regulatory authority, disclosure of project details, adherence to project timelines, deposit of project funds in a designated bank account, creation of an escrow mechanism to protect buyer's funds, establishment of a grievance redressal mechanism, and appointment of Real Estate Appellate Tribunals for dispute resolution.
4. Who does RERA apply to?
RERA applies to all residential and commercial real estate projects with an area of 500 square meters or more or housing projects with eight or more units. It covers both ongoing and new projects and is applicable to real estate developers, promoters, agents, and homebuyers.
5. What are the benefits of RERA for homebuyers?
Under RERA, homebuyers are entitled to various benefits such as increased transparency in transactions, access to project details, delivery of projects within stipulated timelines, quality construction, adherence to sanctioned plans, and a secure grievance redressal mechanism. RERA also provides for the refund of funds in case of project delays or discrepancies.
6. How does RERA protect homebuyers from fraud?
RERA requires developers to register their projects with the regulatory authority, providing essential information such as project details, land status, layout plans, and financial statements. It also mandates that 70% of the funds collected from buyers be deposited in a separate escrow account to ensure that the money is used only for the intended project. These measures help prevent fraud and ensure project completion.
7. What is the process for registering a real estate project under RERA?
To register a project under RERA, developers need to submit various documents and information such as project plans, land title documents, financial details, and details of the developer and agent involved. The application for registration is scrutinized by the regulatory authority, and upon approval, a unique registration number and certificate are issued.
8. What are the consequences of non-compliance with RERA?
Non-compliance with RERA can result in penalties or imprisonment for developers or promoters. The regulatory authority has the power to impose fines, cancel project registration, or even initiate criminal proceedings against those found to be in violation of the act.
9. How can homebuyers verify the RERA compliance of a project?
Homebuyers can verify the RERA compliance of a project by checking the project's registration status on the respective state's RERA website. The website provides information about registered projects, including their status, details of developers, and approved plans.
10. Are there any exclusions or exceptions under RERA?
Certain projects are exempted from RERA, such as those where the land area does not exceed 500 square meters or the number of units to be constructed is less than eight. However, this may vary from state to state, and it is advisable to check the specific provisions of the respective state's RERA rules and regulations.