FULL PROCESS OF REGISTRATION OF RERA REGISTRATION
|DOCUMENTS|PROCESS|REQUIREMENTS

INTRODUCTION

The selling of homes, buildings, and plots in the real estate sector grew at an unexpected pace. The RERA, or Real Estate Regulatory Authority, was established by the Indian government to keep a check on builders and to provide open and fair sales to buyers. After receiving numerous complaints from buyers about delays in receiving property from builders, the government enacted a 92 Sections Act in the parliament during the May 2016 session. Out of the 92 parts, 59 were hinted at and passed by the upper house, the Rajya Sabha, on March 10th, followed by the lower house, the Lok Sabha, on March 15th.

On May 1, 2019, the RERA act went into effect with 52 sections, and the remaining sections were notified on May 1, 2017. The Real Estate (Regulations & Development) Act 2016 is the official name. At the moment, 28 states and UTs are working to comply with the Act, with the rest expected to follow suit shortly. Both real estate builders and developers in states that have complied with the Act are required to register under the RERA act and provide all required information to the authority.

WHY IS REGISTRATION NEEDED?

RERA registration ensures that all contracts are transparent, which benefits all parties involved. It also promotes transparency by reducing the likelihood of real estate contract delays. The primary goal of the registration is to protect real estate investors while also increasing investment in the sector.

This Act was passed in 2016 to address the issues that remain in the real estate industry. The Act will be enforced at the state level, with the following responsibilities for the governing authorities:

1) Registration of commercial properties and residential flats under RERA, as well as other relevant approvals.

2) Governing real estate activities such as sales and purchases.

POINTS TO REMEMBER UNDER RERA ACT, 2016.

  1. RERA Act is applicable in all states in India, and it will apply to both residential and commercial properties.
  2. The land will be sold based on carpet area rather than mega built-up area.
  3. Builders must put 70 percent of the money they receive from buyers into a separate bank account for the project’s building.
  4. Developers must post project information (financial statements, legal title deeds, and other documents) on their website and update it quarterly with construction updates.
  5. The RERA Authority requires projects with a plot size of at least 500 sq. mt. or 8 apartments to be registered.
  6. Builders must apply their project’s original approved plans as well as any changes made to RERA.
  7. In the event of a delay, both developers and consumers would pay a 2% interest rate above SBI’s MCLR.
  8. For breaking the rule, developers could face up to three years in prison, and agents and consumers could face up to one year in prison.
  9. During the 5-year term, any structural or workmanship defects in the building must be repaired by the promoter without charge within 30 days. In the event that he fails to do so, the customer is entitled to compensation under RERA.
  10. Before signing a registered selling agreement, developers cannot claim more than 10% of the property cost as an advance payment booking rate.
  11. Developers must register with the authority before advertising, selling, offering, marketing, or booking any plot or apartment.
  12. Within one year of taking ownership, the buyer will write to the developer to complain about the project’s flaws. Every state in India will obey RERA in filing lawsuits, and this rule will apply to both residential and commercial properties.
  13. The land will be sold based on carpet area rather than mega built-up area.
  14. Builders must put 70 percent of the money they receive from buyers into a separate bank account for the project’s building.
  15. Developers must post project information (financial statements, a valid title deed, and other documents) on their website and update it quarterly with construction updates.
  16. The RERA Authority requires projects with a plot size of at least 500 sq. mt. or 8 apartments to be registered.
  17. Builders must apply their project’s original approved plans as well as any changes made to RERA.
  18. In the event of a delay, both developers and consumers would pay a 2% interest rate above SBI’s MCLR.
  19. For breaking the rule, developers could face up to three years in prison, and agents and consumers could face up to one year in prison.
  20. During the 5-year term, any structural or workmanship defects in the building must be repaired by the promoter without charge within 30 days. In the event that he fails to do so, the customer is entitled to compensation under RERA.
  21. Until signing a recorded selling agreement, developers cannot claim more than 10% of the property cost as an advance payment booking amount.
  22. Developers must register with the authority before advertising, selling, offering, marketing, or booking any plot or apartment.
  23. Within one year of taking ownership, the buyer will write to the developer to complain about the project’s flaws.

OBJECTIVES OF RERA REGISTRATION

  1. Increases market transparency and accountability in order to safeguard their interests.
  2. Creates conflict resolution process in order to settle grievances.
  3. Improves enforcement that helps mitigate fraud.
  4. To minimize delays by enforcing fairness.
  5. Develop professionalism and standards to ensure smooth operations.
  6. Raises awareness through the promotion of good governance practices.
  7. Facilitates transactions by imposing obligations on both the promoter and the buyer.
  8. Create an Appellate Tribunal to hear appeals from RERA mandates, rulings, or directives.

RERA APPLICABILITY AND EXCEPTIONS

PARTIES TO THE TRANSACTION– It covers promoters and real estate brokers, including builders, developers, contractors, planning bodies, and any other public entity that builds or develops land, buildings, or apartments for the purpose of sale.

TYPES OF PROPERTIES– It covers commercial structures, residential apartments, and land that has been built for sale.

All commercial and/or residential real estate project(s) will have to register themselves except in project(s) where:

1). The area of land proposed which is to be developed does not exceed 500 hundred square meters.

2). No. of apartments proposed which is to be developed does not exceed 8 inclusive of the phases prior to commencement of this Act.

3). The Promoters have received the completion certificate for a real estate project(s).

4) Renovation or repair or redevelopment projects not involving Marketing, Advertising and selling & new allotment.

FEES FOR PROJECT REGISTRATION

For registering a project under the RERA Act, the promoter must pay a registration fee to the state RERA authority. RTGS or NEFT transactions may be used to make the payment. The registration fee for each square meter varies from state to state.

PROCESS OF RERA REGISTRATION AND DOCUMENTATION

RERA registration is a state-by-state operation, so it differs from one state to the next. The application can be completed electronically at the official website of the state in which the registration is sought. The promoters and real estate agents must apply the required paperwork, as well as an application for registration, to their respective states’ Regulating Authorities. There are some documents that are needed for registration in every state. The following are the details:

Documents required to register as a promoter:

  1. The promoter’s PAN card.
  2. Parking slots must be available in the real estate project.
  3. Legal title deeds representing the promoter’s title to the land on which the project is to be built.
  4. Encumbrance Certificate pertaining to the project’s properties.
  5. Commencement Certificate of the project.
  6. The project’s sanction plan, layout plan, and location information.
  7. The construction work plan will be carried out in the project.
  8. Details of the promoter’s previous project experience, if any.

The following documentation relevant to the the PROMOTER’S/PROMOTER ENTERPRISE’S PREVIOUS PROJECT experience, if any, must be submitted with the registration:

  1. Previous project experience – if yes, please include information about the projects he has launched in the last five years.
  2. Project’s name.
  3. What is the status of the project? Is there any chance that it will be completed on time?
  4. If there is a pending case, include the case name and number.

If the promoter is a business entity such as a CORPORATION, PARTNERSHIP, SOCIETY, OR SOLE PROPRIETORSHIP, the following additional documents are required:

  1. The company’s name, form, and registered address.
  2. Registration Certificate, Memorandum of Association (MOA), Articles of Association (AOA), and date of incorporation are all details of the company’s registration.
  3. Balance sheets for immediately previous 3 financial years that has been audited.
  4. The previous three years’ audited report and directors’ report.
  5. The promoter/director/partners/chairman/or any other designated person’s name, address, contact information, and photographs.

The following documents are needed if the PROMOTER IS NOT THE LANDOWNER on which the project construction is proposed:

  1. The owner’s permission is needed.
  2. Development agreement.
  3. Joint Development Agreement.
  4. Collaboration Agreement.
  5. Any other arrangement between the promoter and the owner.
  6. The owner’s title deeds.

DOCUMENTS REQUIRED TO REGISTER AS A REAL ESTATE AGENT INCLUDE:

  1. PAN
  2. Evidence of a permanent address.
  3. Photograph.
  4. Information about the real estate agent business, including its name, registered address, type of business (sole proprietorship, associations, co-operative societies, partnerships, businesses, etc.)
  5. If relevant, details of the enterprise’s registration, such as bylaws, memorandums of association, articles of association, and so on.

POINTS TO BE KEPT IN MIND:

Real estate agents who work in the selling and purchasing of properties will apply for RERA registration, which is good for the entire state.

Following receipt of the registration application, the promoter will be given a Registration Number, Login Id, and password. The promoter will use the login id and password to update the status of the project on the RERA website.

The cost of RERA registration varies from state to state. The fee for promoters is determined by the project’s location, up to a certain amount. The fees for agents are determined by the form of entity.

The RERA Registration is valid for the duration of the promoter’s commitment to complete the project as specified.

In the event of any disaster, such as a flood, burning, or battle, the same may be extended. These extensions will only be valid for a year.

ADVANTAGES OF REGISTRATION FOR BUYERS:

ON-TIME POSSESSION OF PROPERTY

The biggest flaw in the real estate industry has been promoters’ false promises of project completion and execution, which has resulted in major financial worries and mistrust among buyers. When promoters register under the RERA, they must include an approximate completion date for the project; otherwise, the promoter may face severe penalties.

ACCURATE DETAILS OF THE PROJECT

The promoter must have complete and correct project information, such as the project’s current state of completion, facilities given, and other related details or ongoing projects, which cannot be changed later.

ACCURATE LICENSE CLEARANCE

Prior to RERA, project promoters would never obtain the required government licenses and clearances, and projects would be delayed as a result. However, before selling even a single unit, promoters registered under RERA must have the licenses in place. As a result, consumers can no longer be duped into participating in fraudulent schemes.

REPAIR OF DEFECTS

Following the buyer’s purchase, it is the promoter’s duty to correct any defects or deficiencies.

RESTRICTED ADVERTISEMENT

Only after obtaining the requisite RERA registration may the promoter advertise their ventures, and the registration number must be shown in the advertising.

PAYMENT OF BOOKING AMOUNT

The ten percent booking fee must be charged only after the selling agreement has been registered.

FILING OF COMPLAINTS UNDER RERA

Any person who has been suffered by violation of the Act’s provisions can file a complaint with RERA. If a person is not satisfied with a decision taken by RERA or its officer, he can file an appeal within 60 days of the passing of the order with the RERA Appellate Tribunal.

Further, the person can file an appeal with the High Court against the order of the Appellate Tribunals within 60 days of the date of passing of the order of the Appellate Tribunal.  

RENEWAL OF REGISTRATION

A real estate agent’s RERA certificate is valid for 5-10 years, depending on the state where the RERA registration is held. Real estate agents must apply for renewal of registration within 60 days of the expiration of their previous certificate.

CONCLUSION


RERA is a brilliant initiative for controlling the real estate market, according to the RERA Report. Not only would the Act reduce turnaround times, but it will also help to bring more clarity to the system. However, because of issues such as political hesitation, promoters, builders, and consumers should proceed with caution. However, there is still a scope for progress in the Act’s implementation, which necessitates legislative changes based on stakeholder input. On a more optimistic note, legislation attempting to strengthen real estate industry regulation is a breath of fresh air in the system.