What is Real Estate Regulation and Development (RERA) Act ?

Real Estate Regulation and Development Act, commonly known as RERA Act, came into effect on 1st May 2016 and thus known and used as RERA Act 2016 and is considered as one of the remarkable and landmark legislation passed by the Governmnet of India with the aim of regularising one of the most unorganized sector i.e. real estate sector. This act was passed and reinforced with the intention to encourage tranparency, standardization, accountability and financial discipline and also to encourage investors. Also RERA Act intends to protect the interests of the csonusmers by encouraging transprarency because real estate is one sector which has seen a tremendous increase in the number of complaints against the builders or developers/promoters and most of the registered complaints are concering the final end product i.e. either there is tremendous delay in the possession or there is a remakrkable difference in what was promised and what is being delivered.

Before RERA Act, there was no medium through which a consumer could ask or seek for project details like layout plan, land status, approvals, agreements, details of people involved like contractor, architect, structural engineer etc. However, RERA Act has made the availablity of above mentioned information to the consumers not only eady, but also mandatory i.e. a builder or promoter has to provide details like layout plan, carpet area, approvals, title, deeds, details of people involved like those of contractors, builders etc beforehand only.

RERA Complaints: File complaints against builders or developers

RERA Act Registration

To ensure a uniform structure to the real estate sector, RERA Act makes it mandatory for all promoters/builders and real estate agents to register with the RERA before they start advertising for the project. Once they register with RERA, they are provided with a unique registration number which needs to be a part of all advertising campaigns. Although RERA Act is a central legislation, every state has their own set of rules for the land they own and thus every state has its own policy to execute RERA.

Both the state and central government are quite vigilant and particular about RERA registration and in case of non-registration of a real estate project, Section 59 of RERA Act imposes a heavy penalty of up to 10% of the estimated project cost and in case you turn out to be a continued defaulter, the punishment can extend up to imprisonment for 3 years in addition to the fine of up to 10% on the estimated project cost. While Section 59 of RERA Act deals with non-registration issues, Section 31 deals with consumer greivances i.e. any aggrieved person may file a complaint against the promoter or the builder regarding violation of the provisions with the concerned authority, because RERA Act has empowered the authorities to impose fine or penalty as well as to take remedial actions as seemed necessary as per the situation like granting of interim order(s), change in the developer/promoter, refund of consideration amount received by the Promoter from various allottee(s) etc. There are sections like Section 12 and 13 which bring lot of relief to the consumers i.e. as per Section 12 of RERA Act deals with claiming loss incurred to the consumer due to incorrect or false statement in advertisement or prospectus and Section 13 clearly says that advance payment to the builder or the promoter is made only if ther is a sale agreement in place and in any other case, there is no question of advance payment or deposit to the builder.

Also Section 14 of RERA Act adds on to the accountabilty of the promoter or builder because it clearly says that the builder or promoter has to adhere to the sacntioned layout plan and in case of any change to the same, prior and written approval from the buyer/consumer is must. RERA Act is a balanced act and lays as much responsibility and accountability on the buyers as much it does on the consumers as well. Section 19 of RERA Act clearly mentions that the consumers should pay the installments as per the manner and time mentioned in the agreement for sale and in case they fail to do, they are liable to pay the interest or penalty on late payment and also they must take the physical possession of the property within two months of issuance of occupancy certificate.Implementaion of RERA on the actual ground has mixed views both from the consumer and promoters/builders, wherein buyers or consumers feel that the changes as per RERA legislation are still not visible or available to them on ground and on the other side implementation of RERA has added transparency in the real estate sector.

RERA Act Penalties and Complaint

While RERA Act gives and layout ample regulations to give a uniform and transparent structure to the real estate sector, the question is that whether the consumer end is aware of how to make the best out of it or not i.e. whether they know how to file a complaint or list out their greivance(s) against any builder/promoter?

Different sections of RERA Act lists out penalties in accordance with the offense(s), however in order to file a complaint under RERA Act, you need to follow its pre-defined format as per the state you belong to because as mentioned above, each state has its own set of rules and regulations. One of the prime benefit of the RERA Act is the ease it provides to its consumers to file a complaint in case there is a greivance and if you as a buyer are not sure about how to go about it, RERA Act gives you flexibilty to consult a RERA consultant who can help in filing your case in RERA as per the desired and appropriate manner and the reason why the consumers have welcomed this provision of RERA Act is because before RERA Act came into picture, any and all kind of consumers grievances were handled by Consumers Disputes Redressal Commissions (CDRC) which of course use to take their own sweet time in disposing of a complaint whereas RERA Act gives you an easy solution to put down your grievnace to the concerner authority in the following manner:

  • You can file a RERA complaint under Section 31 of the RERA Act either with the Real Estate Regulatory Authority or with the adjudicating officer.
  • In order to file your complaint under RERA Act, you need to first find out under whose jurisdiction your property falls in.
  • Every state has their own prescribed format according to which you have to file your complaint and you can find the same on the RERA portal of the desired state.
  • You can file complaint against builder/promoters, allottees, real estate agents.
  • Once you have the prescribed format, you need to find a learned property advocate who will take you through each step in a correct and legal manner.
  • RERA complaint should have the following details:
    • Registration number of the property;
    • Address of the project;
    • The name, address and other details of the buyer;
    • The response of the project developer;
    • Each and every fact, documents and statements related to the delay in the possession of the property;
    • The relief sought from the RERA authority, if any.
    • Amount paid to the buyer;
    • The interest paid on the amount.
    • Flat number and total value of flat.
  • Like every state has their prescribed format of RERA complaint, the fee for the same also varies as per the state and you need to pay the same as per the state you belong to. For example in Maharashtra, the fees for filing a RERA complaint is Rs 5,000 whereas the fees for the same in Karnataka is RS 10,000.
  • RERA Act gives a timeline of 120 days to the RERA authority to dispose of the cases pertianing to the possession delay.
  • There are numerous benefits for filing a case under RERA Act such as:
    • Fast disposal of cases;
    • High transparency;
    • Efficient dispute resolution body;
    • Consumers can claim compensation for delayed projects and promoters are liable to pay;
    • Chances of manipualtion of law from either the promoters is nil;
    • No ambiguity in area measurements;
    • Adjudicating mechanism in place.
  • In order to get a prompt and quick relief, you need to file your case at the earliest onset of the dispute. Although RERA does not give any specific time under which a complaint should be filed but it is kind of unsaid fact that it should be done well within time.
  • Every state has their own set of penalties for non-compliance of RERA Act. For example, in Maharashtra, the fine imposed on the builders is either double of the registration fees or Rs 2 lakhs, which ever is higher. Also, it does not mention any imprisonment penalties whereas for Madhya Pradesh, penalty for non complaince to RERA Act can lead to imprisonment up to 3 years or with fine up to 10% of the approximate cost of the real estate project or at times both.
  • Section 59, 60, 61 and 64 deals with the penalties for promoters whereas Section 62, 65 and 66 deals with the penalties for real estate agents and Section 67 and 68 lists down the penalties for allottees.

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