A Complete Guide to MahaRERA: Homebuyer's Guide to Real Estate Regulatory Authority Act & Registration Process

Any individual who is interested in buying a property should be aware of the RERA Act in INDIA. The RERA Act was implemented in 2016 and is a regulator for the real estate industry. This Act benefited many individuals by solving conflicts which could have arisen from disputes between people dealing with real estate. These people may be buyers, sellers, real estate agents or builders.

Real Estate Regulation and Development Act, commonly known as RERA, came into existence in 2016. The main aim of this Act was to boost the real estate sector and also to safeguard the individuals purchasing a house. Thus the unregulated and unorganized real estate sector is now regulated and organized. Nowadays, most of the homebuyers first check if the property is RERA approved or not. With the increase in demand for RERA-approved houses, the builders also follow the guidelines issued in the RERA, which in turn, helps them in the sale of their property (houses/apartments). Also Read : Everything You Need To Know About RERA - The Real Estate (Regulation and Development) Act

RERA committees are prevalent in all the states in India as specified by the RERA Act, 2016. It ensures transparency between the buyer and the seller. Furthermore, it acts as a regulator in the unorganized real estate sector. Apart from this, it has brought about uniformity within the different states. A project with an area above 500 square meters or more than eight apartments must be registered with RERA. A person wishing to buy or sell a property within a state can look up the RERA of that state. For example, in Karnataka, it will be RERA Karnataka. In Delhi, it will be RERA Delhi and so on.

Some of the salient features of the RERA Act 2016 are as follows:

1. The RERA in every state monitors and helps in resolving disputes related to real estate , which may be personal or judicial within the state.
2. A fast-track mechanism has also been established for any dispute settlement regarding property through appellate tribunals and adjudicating officers.
3. All real estate projects should be registered with the concerned jurisdiction authority. It is entirely up to this authority to accept or reject the project. The rejection usually happens if the guidelines issued by RERA are not followed.
4. Any default by the promoter or buyer will have to pay an equal interest rate.
5. An individual can file a complaint with RERA if any sort of violation of the rule or provision of the Act has been done by a promoter, buyer or real estate agent.
6. If a complaint has been filed against any builder, buyer or real estate agent, then RERA has every right to stop the continuation of any activity till the enquiry is going on.
7. Suppose an individual suffers losses because the promoter sells a defective title land property (another person claiming the property). In such a case, the builder will have to compensate the buyer, whether it is constructed or under construction. Currently, there is no provision regarding the amount of compensation to be given to the individual who suffered the loss.
8. If the grieved party is not satisfied with the RERA decision regarding an enquiry, then such an individual can appeal before Appellate Tribunal.
9. If the promoter does not abide by RERA’s decision, then a penalty of 5%of the evaluated property will be imposed. This penalty has to be paid by the promoter.
10. If a company commits an offence under this act, then the person in charge of the company doing an offence along with the company will be considered guilty and punished.
11. Any civil court cannot interfere with matters related to RERA and Appellate Tribunal’s jurisdiction.
12. The Appellate Tribunal’s orders have to be followed. If they are not followed, then a penalty will be imposed.

Some verdicts can also result in imprisonment of up to 3 years or a fine of 10% of the evaluated price of the property.

Real Estate Regulation and Development Act has been formulated in such a way that it benefits the promoter, buyer and real estate agent. To name few of the benefits are:

1. When a builder plans to start the construction of a building, it needs to be approved by RERA (Real Estate Regulation and Development Act). This approval is mandatory and helps maintain transparency and avoids dispersing misleading information to the buyer.
2. The buyer has to be well informed about the project, like layout plan, handover date, materials used and execution, payment terms etc.
3. If the builder has not delivered as promised, then the buyer is eligible for a full refund of the advanced payment made to him. In cases like delays in the delivery of the project, the builder can also settle with the buyer by paying interest for the delayed time period.
4. The builder, at the time of booking, cannot take more than 10%of the cost of the project as advance payment and application fees. This helps the buyer plan finances while buying or investing in a property. It also helps the buyer in arranging for considerable funds in a short period of time.
5. Only one sale agreement can be made between the promoter and the buyer.
6. The name, along with the address proof of all the people associated with the project, like the architect, engineer, real estate agent, contractor etc., has to be provided to RERA.
7. RERA has set up state regulatory bodies which monitor the real estate projects in their respective states. While getting approval, the builder has to specify the date of delivery. The project has to be completed in this specified time. This helps the buyer to know the date of possession.
8. RERA imposes fines and penalties on any delayed project or a builder who is a defaulter. This safeguards the interest of an individual who books a house. However, there are some unavoidable circumstances like natural calamity, unavailability of labour or unavailability of raw materials etc. In that case, an extended time of 1 year is usually provided to the builder. This has to be informed to the RERA in writing.
9. If the buyer finds out that the property does not have a clear title and there is some sort of defect in the title, then the promoter will have to pay compensation to the buyer.
10. Suppose there is any structural defect or quality concerns ( like sub-standard quality products delivered than those promised). Within 5 years of possession, if it has been brought to the builder's notice, then it has to be rectified by the builder within 30 days free of cost (without charging the buyer).
11. If the buyer, promoter or real estate agent is not satisfied or has some issues related to a project, they can register a complaint with RERA. If the verdict of their grievance is not satisfactory, then they may approach the Appellate Tribunal.
12. The risk of insolvency of the builder is reduced. Most of the established builders have many ongoing projects at the same time. Earlier, they would transfer funds from one project to another at their convenience. Since RERA came into force, this practice has been stopped. The builder has to deposit 70% of the funds in a separate bank account (escrow account). The transactions of this account can only be made with the approval of an engineer, chartered accountant and an architect. These funds can be used for construction purposes only.
13. Before RERA came into existence, the builders did not define the price of a property and had no specific way of calculating the price of the property. With RERA, the builders have to charge according to the carpet area of the property. This way, the buyer does not have to shell out extra from pocket as the price to be paid is standardized according to the floor plan.
14. The buyer has to pay for the carpet area of the property rather than for the super built-up area.

It is imperative to know the importance of the word ‘carpet area’. Many builders used to sell their apartments by calculating the super built-up area. On the other hand, the buyer used to think they were getting a very spacious place. At the same time, the actual scenario was that their apartment area, along with balconies, staircase, common area, passage etc., was charged by the builder. This way, the buyer had to shell out quite an excessive amount for the apartment.Since RERA, this problem has been solved. There is no discrepancy regarding the rate to be charged for an apartment. Nowadays, apartments or property is charged according to the carpet area. This means the area within the four walls of the apartment, the space usable by the residents of the apartment. This area does not cover the area of the balcony, terrace, open shafts, staircase, common area and passage etc.The ‘carpet area,’ defined under RERA, ensures the promoter does not mislead the buyer. Since all the apartments or properties are charged based on carpet area, it has become easier for the buyer to compare one property's price. Furthermore, it also specifies the amount of area that is usable by the buyer of the property. The builders are no longer able to inflate the price of the property. It is easier for the homebuyer to calculate the price per square foot of the property. As per the rules laid down by RERA, it is mandatory to sell property according to the carpet area of the property.

The penalties for not complying with the laws specified in RERA can be imposed on the builder, homebuyer or real estate agent. These penalties are as follows:

For homebuyers:

1. If the homebuyer is found not complying with RERA, then a penalty of 5% of the approximate cost of the property will be imposed on the homebuyer.
2. If the homebuyer is found not complying with the Appellate Tribunal, then 10% of the approximate cost of the property will be imposed. In some extreme cases, one-year imprisonment will be imposed. Whereas in some cases, both will be imposed depending upon the severity of the case.
3. If the homebuyer files a complaint against the builder and the charges are not proven, then the homebuyer will have to face the consequences. A penalty of 5 % of the estimated value of the project has to be paid by the homebuyer to the builder.

For promoters:

1. An offence of the non-registration of the property will fetch a penalty of 10% of the total estimated project cost.
2. 5% of the project’s estimated cost will be penalised if the promoter provides false information.
3. If there is any sort of violation of the law from the promoter's side, then a penalty of 10% of the total estimated cost of the project or 3 years of imprisonment or both will be imposed on the promoter depending upon the severity of the case.

For real estate agent:

1. A penalty of 10% of the approximate cost of the property or Rs 10,000 per day for an offence of non-registration of the property.
2. An offence of non-compliance with RERA will fetch a daily fine or 5% of the approximate total value of the property.
3. An offence of non-compliance with the Appellate Tribunal will fetch a penalty of 10% of the approximate cost of the property or imprisonment of up to 10 years or both, depending upon the severity of the case.

RERA complaints can be filed by/against a buyer, promoter or real estate agent under Section 31 of RERA. To file a complaint, the following steps need to be followed:

• Applicant and the defendant's details.
• The complete address and the registration number of the property/project.
• On what grounds is the claim being made? The entire statement of facts needs to be refurbished to RERA.
• Details of any relief or compensation which is sought.

1. First of all, find a good RERA lawyer and file a complaint under the jurisdiction in which the property is located.
2. Every state has its own set of rules. File the complaint as per the rule of the state.
3. Some essential details need to be entered while filing the complaint. These are as follows -
4. The fees need to be paid, which differ from one state to another. For instance, Karnataka has a fee of Rs. 1000. In Maharashtra, and it is Rs. 5000.
5. The complaint can be registered online through the RERA official website.
6. The applicant may not be satisfied with the decision given by RERA. in such a case, and the applicant can file a petition in the Appellate Tribunal.

Any builder must register their project under RERA. To register projects under RERA, the following steps need to be followed -

For the promoter:

1. Open a bank account under Section 4(2)(1)(D)of the Act.
2. Collect all the necessary documents needed for registration like the PAN card of the promoter, Encumbrance certificate, legal title deed, commencement certificate, sanction plan, layout plan etc.
3. Submit the duly filled application form for registration (Form A).
4. Submit the duly filled Form B, which is a declaration by the promoter as per Section 4 of RERA.
5. Submit the duly filled Form G, which is the draft agreement of the project. This can be the allotment or the sale of the property.
6. Submit an affidavit stating that the information provided in Form G is accurate.
7. The promoter must submit an affidavit declaring that no booking fee has been collected from the purchasers in accordance with Section 3 of the Act.
8. After this, a registration fee has to be submitted. This fee depends upon the state in which the approval of the project is needed.
9. The duly signed hard copy of all the documents should be sent by registered post to the RERA of the state where the property is located.
10. To complete the registration process, fill out and submit Form C.
11. After this, the promoter can obtain the registration certificate.

For the real estate agent:

1. Submit a duly filled application form along with all the necessary documents needed.
2. A registration number will be provided after the fee is deposited with RERA.
3. This registration number has to be mentioned while selling any property.
4. All the details and documents regarding a project have to be given and shared with the buyer,
5. If any wrong information is provided during registration, such a person can be suspended.

RERA has acted as a boon for many homebuyers and investors in the real estate sector. The implementation of RERA has simplified the entire process of house buying. The information provided to the homebuyer is more or less entirely accurate, and transparency is also there. It has helped in removing non-registered promoters from the market. Despite showing promising results, RERA has a few drawbacks which need attention.Some of the drawbacks are -

1. Not much clarity on project approvals – if there is any delay in the clearance from the Government’s side. RERA cannot do much about it and are silent about these delays. Usually, the approval time taken by Government is 2 years from the date of application. Despite such a long time taken by the Government, RERA does not blame the Government for the delay.
2. Absence of a single window – The promoter has to take approval from various departments of the Government. It takes a long time and is highly tiresome to complete this process. Work could have been done efficiently if there wasn’t any need to go through so many departments by implementing mechanisms through a single window. As of now, it is a standard procedure which has to be followed.
3. Need for proper technology usage – The online application process in metropolitan cities is smooth. When it comes to the same procedure in small cities and towns then, technology takes a hit. Many would prefer the process to be in their local language, which hasn’t started yet.
4. Some contents are not precise – There is no standard format for certification by architect, engineer, chartered accountant and auditor. RERA should lay down specific rules for this.

RERA came into existence in 2016 to reduce the burden on homebuyers by providing accurate and transparent information about the project they are interested in. It was also considered to safeguard the interests of promoters and real estate agents. RERA, to some extent, has been responsible for a boom in the real estate segment. It has proved to be more beneficial and efficient in protecting the rights of an individual.