RERA stands for Real Estate (Regulation and Development) Act, which is a law enacted by the Indian Parliament in 2016 to regulate the real estate sector and protect the interests of home buyers. The law aims to bring transparency and accountability to the real estate industry and establish a regulatory mechanism for the same.

All real estate projects with a land area of 500 square meters or more or with eight or more apartments must register with the regulatory authority in their respective states. The law also requires builders to disclose all information about the project, including the timeline for completion, the status of approvals, and the details of the land and the developer.

RERA also provides several benefits to home buyers, such as the right to receive timely possession of the property, the right to demand a refund or compensation for delays, and the right to access accurate and transparent information about the project. The law has brought significant changes to the real estate sector and has helped restore the confidence of home buyers in the market.

RERA Rules

RERA rules of payment

RERA (Real Estate Regulatory Authority) rules in India have brought in various provisions for ensuring transparency and accountability in the real estate sector. The rules related to payments under RERA are as follows:

• The developer cannot demand more than 10% of the cost of the apartment as an advance payment or application fee before signing a registered agreement for sale.
• The buyer is required to make payments to the developer as per the construction-linked payment plan mutually agreed upon between the two parties.
• The developer is required to maintain a separate escrow account for every project where 70% of the amount received from the buyers shall be deposited.
• Withdrawals from the escrow account can only be made in proportion to the percentage of completion of the project, as certified by an engineer, architect or chartered accountant.

RERA rules of Possession

RERA (Real Estate Regulatory Authority) rules in India have provisions related to the possession of the property. The rules related to possession under RERA are as follows:

• The developer is required to specify the date of possession of the property in the registered agreement for sale.
• If the developer fails to complete the project on the promised date of possession, the buyer has the right to withdraw from the project and claim a refund of the amount paid, along with interest.
• The developer is required to pay interest to the buyer for any delay in possession of the property, which is usually approximately 10% per annum.
• In case of any structural defects or quality issues, the developer is required to rectify them within five years from the date of possession, without any additional cost to the buyer.
• The developer is required to obtain the completion certificate from the competent authority before handing over possession of the property to the buyer.
• The buyer is entitled to inspect the property before taking possession, and any deficiency or defect observed during the inspection must be rectified by the developer before handing over possession.

RERA Rules for Renewal

RERA (Real Estate Regulatory Authority) rules in India have provisions related to the renewal of registration of a real estate project. The rules related to renewal under RERA are as follows:

1. The registration of a real estate project is valid for a period specified by the state RERA authority, which is generally three years.
2. The developer can apply for renewal of registration of the project within three months before the expiry of the registration.
3. The application for renewal of registration must be made in a prescribed format, along with the necessary fees and documents, including an updated project plan, layout, and schedule of implementation.
4. The state RERA authority shall consider the renewal application and shall grant renewal of registration if the developer has complied with all the terms and conditions of the earlier registration.
5. In case the renewal of registration is not granted, the state RERA authority may allow an extension of registration for a period not exceeding one year, on payment of a prescribed fee.

Recent amendments in RERA

• The Bombay High Court has declared that the rules of the RERA Act 2016 will now apply to long-term leases or agreements to lease
• The Maharashtra Real Estate Regulatory Authority (MahaRERA) on the 10th of August extended the deadline for projects due on and after the 15th of April 2021 by 6 months
• RERA authorities also declared that developers should not invoke force majeure provision due to the lack of clearances or in case of any financial situations
• Homebuyers can now register complaints about unregistered builders and projects, which is entirely contrary to the central legislation of the RERA Act 2016
• The Maha RERA has also directed builders in Mumbai to get an occupancy certificate for their properties within 3 months, failing to do the same will result in them having to pay interest to the building’s inhabitants

RERA Amendments in Karnataka

• Increase in penalty: The proposed amendments sought to increase the penalty for non-compliance with RERA regulations from the existing Rs. 10,000 per day to up to 10% of the project cost.
• Extension of registration period: The government proposed to extend the registration period for real estate projects from the existing five years to seven years, with the option of further extension for a maximum of two years.
• Mandatory disclosure of litigation: Developers would be required to disclose all pending litigation related to the project at the time of registration, and would also need to update the information periodically.
• Escrow account for land cost: The proposed amendments sought to make it mandatory for developers to maintain a separate escrow account for the land cost, with the funds from this account to be used only for the specific project for which the land was acquired.
• Definition of carpet area: The government proposed to define the term “carpet area” more clearly to avoid confusion and disputes between developers and homebuyers.

RERA aims to make the buying market easier and more promising for homebuyers by providing greater transparency, ensuring timely completion of projects, and enhancing buyer protection. RERA, also aims to provide further protection to homebuyers and enhance the transparency and efficiency of the real estate sector in India.