What is RERA & how to check if a property is RERA compliant

What is RERA?

RERA is the Real Estate (Regulation and Development) Act, 2016 that aims to protect home buyers and also to boost real estate development in India. As per the RERA Act, RERA committees have been set up across India to promote transparency and eradicate the existing discrepancies and problems within the real estate sector. RERA’s mission is to bring fair practices that would protect the interest of the buyers and also keep in check errant builders. Under RERA, the interests of buyers and developers are protected alike.

According to RERA, each State and Union territory will have its own regulator and set of rules to govern the functioning of the regulator. The regulator committees will be responsible for regulating transactions related to both residential and commercial projects under their purview. Real Estate Builders or developers now have to undergo mandatory RERA registration before they start a project.

Key provisions for home buyers under RERA

• Under RERA it is mandatory for all commercial and residential real estate projects with land over 500 sq. mt. or eight apartments, to register with the regulator before launching a project.
• New projects should get all the approvals before the launch of the project so that the buyer is not faced with a delay in the pretense of delay in getting approvals by the builder. Any false statement given to the buyer regarding approvals can invite penalty.
• Builders have to provide information and details regarding any project they have undertaken on RERA’s official website. This information also has to be regularly updated so that the buyer is aware of the project timeline and there is transparency.
• Builders can only quote prices on the basis of the carpet area and not for the super built-up areas such as lifts, balconies, stairs, and lobbies. Under RERA, it is mandatory for the builders to disclose the carpet area.
• As per the RERA Act, the builder has to maintain a separate bank account with any scheduled bank for every project undertaken and deposit 70% of the money received from the buyer. These funds can only be used for the purposes of construction and land cost.
• The builder cannot make structural changes to the property after the initiation of the project without taking consent from 2/3rd of the buyers.
• RERA gives importance to the timely completion of projects. In case there is a delay in the possession, the builder needs pay 2% interest above SBI’s Lending rate to the buyer for the period of delay.
• The builder has to rectify any construction defects brought to their notice by the buyer within 5 years from the date of possession.
• Under the RERA act, all disputes with buyers are supposed to be cleared under 120 days of it being filed.
• RERA also prohibits developers from taking more than 10% as advance from homebuyers.
• The home buyer can immediately demand compensation from the developer if they find any discrepancy in the title deed at the time of possession of the property.

How to check RERA registration status of a project?

RERA is intended to cover all real estate projects across the country but is administered differently in every state with each state having its own regulatory authority. As of today, 22 states and 6 union territories have notified their RERA rules while 19 of them have online portals. For example, Maharashtra has MAHARERA, Telangana has TSRERA, Karnataka has RERA Karnataka and so on).

After RERA regulations in place most builders quote their RERA registration number on their project websites, it is always best to check RERA registration status on the RERA portals of your respective state. The portals will have information regarding the registered projects and other important project details. It is advisable to compare the information the builder has provided with that on the RERA portal and raise an issue in case of discrepancies.