The Real Estate (Regulation and Development) Act, 2016 (RERA) will finally give India’s real estate sector its first regulator from Monday, May 1, 2016. The act was passed by parliament last year and the Union Ministry of Housing and Urban Poverty Alleviation had given time till May 1, 2017, to formulate and notify rules for the functioning of the regulator. RERA seeks to bring clarity and fair practices that would protect the interests of buyers and also impose penalties on errant builders.
Very First question: Why RERA registration is required?
As per section 3 of The Real Estate (Regulation and Development) Act, 2016 (here-in-after referred as RERA), which has come into force from 1st May, 2016 and has been notified to be commenced w.e.f. from 1st May 2017, No promoter shall
- book, sell or offer for sale, or
- invite persons to purchase in any manner
- any plot,
- apartment or building, as the case may be,
In any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act.
- As per RERA, Real Estate Regulatory Authority shall be established State/UT wise. Hence, the promoter needs to register the project with the RERA of the State where project is situated.
- Planning area shall be planning area or development area, whatever name called, designated by respective State/UT Government under the laws related to Town and Country Planning.
- Authority thinks necessary, in the interest of allottees, for projects which are developed beyond the planning area but with the requisite permission of the local authority, it may, by order, direct the promoter of such project to register with the Authority.
- Registration shall also be required for on-going projects on the date of commencement of this Act for which the completion certificate has not been issued. Such project shall be required to be registered within a period of 3 months from the date of commencement of this Act.
- For the purpose of this section, where the real estate project is to be developed in phases, every such phase shall be considered a standalone real estate project, and the promoter shall obtain registration under this Act for each phase separately.
Now Question: Whole Real Estate is under RERA?
No, Following case exempted from RERA Registration
No registration of the real estate project shall be required if
- The area of land to be developed does not exceed 500 square meters or the number of apartments proposed to be developed does not exceed 8 inclusive of all phases. Provided that, if the appropriate Government considers it necessary, it may, reduce the threshold below five hundred square meters or eight apartments, as the case may be, inclusive of all phases, for exemption from registration under this Act;
- If the promoter has received a completion certificate for a real estate project prior to the commencement of this Act.
- Any contract for the purpose of renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project.