It is vital for law-making bodies to formulate legal guidelines that optimize sectors of the commercial enterprise through frameworks and regulatory authorities. The Real Estate (Regulation and Development) Act, 2016 was enacted for the status quo of a Real Estate Regulatory Authority and for the law and promotion.
What is RERA?
RERA, or the Real Estate (Regulation and Development) Act, 2016, is a legislation which was made for the safety of the interests of the homebuyers and fostering a regime of transparency and fairness within. The Act addresses the pitfalls of the present regime and replaced the equality with a regime that described the rights of homebuyers and the policies and policies to be accompanied via way of means of the developers.
The Delhi High Court has ruled that aggrieved homebuyer can present their case in opposition to errant developers before each Real Estate Regulatory Authority and National Consumer Disputes Redressal Commission (NCDRC). It will come as a large comfort for many buyers.”
Authorities under the RERA Act
The statute has described and elucidated on the government and the appointment of the respective workplace bearers within the Act under Chapters 5, 6, and 7.
‘Appropriate Government’, within the RERA Act, typically refers back to the respective state governments. But in the case of Union Territories, the term refers back to the Central Government or Central Ministry of Urban Development (in case of Delhi) or Union Territory government (in case of Puducherry).
The Real Estate Regulatory Authority: The appropriate governments shall appoint a Real Estate Regulatory Authority within their respective jurisdictions. A single authority also can serve for multiple states. Each character’s authority includes a chairman and not less than 2 members.
- The authority shall meet at regular intervals and review the policies for the protection of homebuyers’ interests and also for resolving if there is any dispute occurs.
- The authority shall conduct investigations and if found guilty can give penalties.
- The Authority can also refer Suo moto cases to the Competition Commission of India.
Central Advisory Council: This is an advisory council that must be constituted through the Central Government from amongst individuals of various ministries involved and those who represent different strata of the Real Estate sector. This Council has the Central Minister of Housing as the ex-officio chairman. This council shall advocate the Central Government at the implementation of the Act, coverage questions, safety of client interest, and fostering the growth of the actual estate sector. The council also can advocate the authorities on different subjects the government may ask for reviews on.
Real Estate Appellate Tribunal: The appellate authority has been mounted to entertain appeals through the aggrieved events. The tribunal includes a chairman and is not less than two members. More than one appellate tribunal may be appointed through the appropriate authorities because the case may be. Every bench has to always include a judicial member and at least one technical member. The appellate tribunal awards a listening to each event and springs up with suitable orders. This appellate tribunal has the same powers as that of a civil court and isn’t subject to the Code of Civil Procedure or the Indian Evidence Act. It is guided through the principles of natural justice. If the case isn’t determined here, the case similarly is going to the High Courts.
Impact of RERA
RERA has brought regulations for buyers as well as for the developers and hence, contributes to the growth of the sector by attracting more investors. It has also made the transaction process transparent to the common people and saved them from pitfalls made by the developers.
Obligations on Developers or Promoters by RERA:
The promoter is the individual who finances or incorporate the project developed by a developer. Sometimes both the developer and the promoter can be a same person.
- If a project is over 8 units or 500 sq. meters, a promoter or a developer should register the project to the RERA authority.
- All developers and promoters must create a website of their own or publish their project in RERA’s website including all the necessary details to maintain transparency and available to everyone so that one can get to know about it
- Promoters are supposed to get a certificate of completion from the authority.
- The relevant documents are to be maintained and handed over while transferring the property to the allottee through a registered conveyance deed. They have to form an association of owners before the transfer of the property.
- Until the project is transferred to the buyer, all the expenses lies to the developer/promoter.
Obligations on Buyers by RERA:
- The buyer is supposed to make payments on time and fulfil all the dues.
- They are expected to participate in the formation of the association.
- The buyer should maintain all the orders passed by the authority.
Penalties for non-compliance under the RERA Act:
- If the developer/promoter does not complete the registration of the project with the RERA, there can be a fine of 10% of the total estimated cost of the project.
- If the project has not been registered and any order or direction for the same has been issued by the authority, there can be a penalty of 5% of the estimated cost of the project.
- If the information or advertisement regarding the project found to be fake, then there can be a penalty of 5% of the estimated cost of the project.
- If the order of the RERA has not been executed or contravened, there can be a daily penalty after passing of the order which has been contravened up to 5% of the estimated cost of the project.
- If the order of the Appellate Tribunal has been contravened, there may be up to 3 years imprisonment with or without a fine of up to 5% of the estimated cost of the project.
Benefits to Buyers under RERA:
Generally, RERA authority is formed to stop the malpractice that a promoter usually exercises during a project. Some of the benefits are as follows:
- The acts create transparency in the process and reduce the generation of black money.
- The RERA authority and the Appellate Tribunals work effectively to provide fast resolution of disputes.
- The act ensures that the buyer have all the information about the property before making a deal.
- “Agreement for Sale Rules” has stopped the buyers from getting exploited by various means.
Benefits to Developers under RERA:
- The act ensures only the genuine developers work in the market create a large scope of business.
- The act promotes transparency and accountability from the side of the investors.
- This transparency process encourage many foreign investors and provide confidence to invest in this field.
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