The Real Estate (Regulation and Development) Act, 2016 is an act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry.

• RERA is required in the country keeping in mind that due to the lack of activeness in the government work including project approvals, many promoters resort to unfair ways to continue their work. Also, the Real Estate Agency is establishing Central Agency Council and Real Estate Appellate Tribunal with RERA so as to boost the level of confidence in buyers for the builders and the agents and also to check the defaulters.
• It will strengthen & protect prospective buyers from fraudulent developers and builders.
• It will weed out weak & unscrupulous builders from the business as they will find it difficult to comply with these rules.
• The stringent provisions buyers’ protection from non-performance & default by the Builders will stop them from cheating as such defaults come along with Criminal penal provisions.
•  All real estate projects have to be registered with RERA prior to commencement. It’s the duty of RERA to fast track dispute resolution mechanism through adjudicating judges (district judges)
• The RERA is sort of judicial tribunal. Now the developer cannot presale the area in bulk but he will have to get registered with RERA. He has to first approach planning authority, Municipality, Municipal Corporation for the proposal of construction. If the proposal is in order, the authority issues Commencement Certificate [CC].

The Act was passed on 10th March, 2016 and is applicable from 1st May, 2017.

The Act applies to all ongoing projects, where completion certificates have not been obtained, irrespective of whether construction began prior to May 1, 2017. For instance, Section 3(1) of the Act, restrains a developer from advertising and selling any space in a project, without registering the project with the Real Estate Regulatory Authority (the Authority). For ongoing projects for which a completion certificate has not been issued, this registration is to be obtained mandatorily within a period of three months from May 1, 2017.

Yes. It is totally mandatory for all the builders/developers to register all their complexes under the act.

Yes, A Central Advisory council will be set up to advice the Central Government on the implications of the Act to recommend policies in order to protect consumers’ interest and to supervise the growth & development of the real estate sector. In addition, there will be a dedicated Appellate Tribunal set up for RERAs to hear appeals from orders of the RERAs and the adjudicating officer.

The real estate developer has to specify the project completion time in the RERA application form. Hence, the real estate developer is accountable to follow the timelines otherwise; it will suffer losses/ penalties.

The RERA, under given force majeure events, may extend the validity of the registration:

• In the event of a natural calamity like flood, cyclone, drought, fire etc.
• In the case of war.

However, the developer is still required to make a presentation to the RERA by paying the applicable fee and such extension will be valid for a period of one year in aggregate.

Every project measuring more than 500 square meters or more than eight apartments will have to be registered with the RERA.

Upon receiving a complaint against the real estate developer, the RERA can revoke registration if it is satisfied that the real estate developer has not complied with the rules and regulations stated under the Act or rules and regulations made thereunder, or has violated the terms and conditions of approval given by competent authority or is involved in unfair practices to sell, market or advertise his project.

If the real estate developer violates the registration procedures prescribed by the Act, he will be required to pay up to 10% of the total estimated cost of the project in question. If found continuing the offense, the real estate developer will be punishable either with imprisonment (up to 3 years) or a fine which may extend up to a further 10% of the above project cost.

While a developer is allowed to sell the project to another investor he can do so only by taking written approval of 2/3rd majority of project’s consumers and also the prior approval of the RERA. Again if a consumer or his family or by other means holds more than one unit in a project he is considered as one consumer only. Also, the RERA need to be informed of such sale and incoming party then assumes all the rights and liabilities as the previous promoter of the project (including project delivery timelines and other such matters).

The buyer shall be entitled to claim the refund of amount paid along with interest at such rate as may be prescribed and compensation in the manner as provided under this Act, from the promoter, if the promoter fails to comply or is unable to give possession of the apartment, plot or building, as the case may be, in accordance with the terms of agreement for sale or due to discontinuance of his business as a developer on account of suspension or revocation of his registration under the provisions of this Act or the rules or regulations made there under.