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What is RERA

Posted by admin on November 10, 2022
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RERA, as the real estate regulator authority, was established under the Real Estate (Regulation and Development) Act of 2016 to regulate the real estate sector and address issues faced by property owners. facing home buyers.

A RERA certificate is a legal document that serves as proof that a property, project or real estate agent has been registered with the RERA state court or regulator. Central law, in particular the Law on Regulation and Real Estate Development, requires the registration of real estate projects and agents to have a unique registration number. The certificate contains promoter, property, and agency information, as well as a registration number. The registration number allows them to practice legally. Without a certificate, a developer, builder, telecom, or real estate agent cannot advertise or book for sale

The most positive aspect of this law is that it provides a unified legal regime for the purchase of condominiums; apartments, etc., and seeks to standardize the practice across the country. Here are some highlights of the Act:

Establishment of the regulatory authority:

The absence of proper rules (such as the Securities Exchange Board of India for capital markets) in the real estate sector has long been felt. The law establishes a real estate regulator in each state and union territory. Its functions include protecting the interests of stakeholders, accumulating data in a designated repository, and creating a robust complaints system. To avoid delays, the competent authority has been mandated to process requests within a maximum period of 60 days; and the same can only be extended if the reason is registered for the delay. In addition, the Real Estate Complaints Authority (REAT) will be the appropriate forum for complaints.

Compulsory registration:

According to central law, each real estate project (with a total development area exceeding 500 square meters or more than 8 units proposed for development in any phase), must be registered with the state RERA. corresponding. Existing projects that have not been issued a Certificate of Completion (CC) or Certificate of Residence (CO), are also subject to registration requirements under the Act. When submitting an application, developers are required to provide detailed information about the project, e.g. land condition, developer contact information, approvals, completion schedule, etc. Only when registration is complete and other approvals (regarding the building) are obtained can the project be put on the market.

Reserve account:

One of the main reasons projects get delayed is that the funds raised for one project are always redirected to funding different, new projects. To prevent such a diversion, developers are now required to put 70% of all project receivables in a separate backup account. Proceeds from this account can only be used for land and construction expenses and require certification by a qualified person.

Continual disclosures by promoters:

Once the law is implemented, homebuyers will be able to track the progress of the project on the RERA website as developers will have to periodically submit to the regulator the progress of the project.

Title representation:

Developers are now required to actively secure their title and interest in the land, which the homebuyer can later use his title against him if an error in ownership is discovered. In addition, they are required to purchase insurance for the ownership and construction of the project, the proceeds of which will be transferred to the transferee upon signing the purchase and sale agreement.

Penalty

To ensure that violation of the Act is not taken lightly, stiff monetary penalty (up to 10% of the project cost) and imprisonment has been prescribed against violators.

Initially, a lot of work must be done to save the current project and the new project. It is necessary to prepare detailed information such as the status of each project carried out in the last 5 years, details of promoter, detailed implementation plan, etc. With the advent of RERA, specialized forums such as the State Estates Administration and the Court of Appeals for Real Estate will be created to resolve real estate purchase disputes. . , on such matters. As RERA lays the groundwork for expeditious dispute resolution, testing the extent of RERA’s success will depend on the timely establishment of these new dispute resolution bodies and how these disputes are resolved. quickly with the ultimate degree.

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