What is RERA Approval and How to do RERA Registration?

Navigating the real estate landscape can be tricky without the right information. Among the most significant developments in this sector is the introduction of the Real Estate Regulatory Authority (RERA), which has transformed real estate transactions in India.

In this blog, we're going to explore all about RERA - what does RERA approval mean, what are the steps to do RERA registration, RERA rules, benefits, penalties and more. By the end of this guide, you'll be well-versed with these aspects, making your real estate journey smoother and safer. So, strap in and let's embark on this journey together!

Table of content

What is RERA?
- What is RERA Act?
- What is RERA Approved?
How to do RERA Registration?
How to check RERA Registration Status of a Property?
Understanding RERA Terminologies
Key Features and Provisions of RERA Act
Dealing with Disputes and Complaints under RERA
- How to File a Complaint under RERA
Applicable Penalties under RERA
Benefits Offered by RERA
FAQs

What is RERA?

RERA full form in real estate stands for "Real Estate Regulatory Authority". It is a government authority established under the Real Estate Regulation and Development Act 2016, which came into force on May 1, 2016. The primary aim of RERA is to protect the interests of home buyers and enhance transparency in the real estate sector.

What is Real Estate Regulatory Act or RERA Act?

The Real Estate Regulation Act 2016, is a significant legislative act introduced by the Government of India to regulate and standardize the Indian real estate industry. The Act, enforced from May 1, 2017, is intended to protect homebuyers and stimulate real estate investments. Here are the amendments of the RERA Act.

What does "RERA approval" or "RERA Approved" means?

RERA Approval refers to the registration of a real estate project or an agent under the Real Estate (Regulation and Development) Act, 2016 (RERA). It is mandatory for commercial and residential real estate projects where the land is over 500 square meters, or eight apartments, to register with RERA.

For developers, getting a RERA approval means that their project is compliant with the statutory norms. For buyers, a RERA approved project means that the project has met the regulatory standards which brings in transparency and accountability.

Also read: The Ultimate Real Estate Glossary

How to do RERA Registration?

It is mandatory for all residential or commercial property where the land is over 500 square meters, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) of the respective state. This registration process safeguards buyer's interests and ensures that builders adhere to specified norms. The steps for RERA registration are:

Online Application: Visit the official RERA website of your respective state, where the project is located.
Fill the Form: Select the option for 'New Project Registration' and fill the form with the required information.
Attach Documents: Provide the necessary supporting documents. These may include:
- Details of the enterprise (name, type, registered address).
- Details of the chairman, partners, directors, and other key members of the enterprise.
- A brief detail of the projects launched by the promoter in the past five years, whether they were completed or are still under progress, and the current status.
- A copy of the approvals and commencement certificate from the competent authority.
- The sanctioned plan, layout plan, and specifications of the proposed project or the phase thereof.
- The plan of development works to be executed in the proposed project and the proposed facilities to be provided.
- Proforma of the allotment letter, agreement for sale, and the conveyance deed proposed to be signed with the allottees.
- The number, type, and carpet area of apartments for sale in the project.
- Details of the registered agents and contractors.
Pay Registration Fee: The registration fee, determined by the respective state's RERA authority, needs to be paid. It is usually calculated based on the area of the project.
Review Process: The RERA authority will review the application and make a decision within 30 days from the date of the application.
Receive Registration Number: After reviewing your application, the respective state's RERA authority will provide a unique registration number, a login ID, and a password for the applicants.
Update Project Details: After obtaining the registration number, the builder/developer is required to regularly update project details on the RERA website.

Note: The exact process and the documents required may vary slightly depending on the state's rules, so it's recommended to check the official RERA website of the respective state or consult with a legal expert.

Also Read: How to Verify Property Details

How to Check RERA Registration Status of a Property

Visit the RERA Website: Each state or Union Territory has its own RERA website. Select the state or Union Territory where the property is located.
Find the 'Registered Projects' Section: On the state's RERA website, there will be an option or a tab for 'Registered Projects', 'Project Details', or similar.
Enter Project Details: Enter details like the name of the project or the name of the builder or by the RERA registration number.
View Details: If the property is already registered, it will appear in the search results. By clicking on the name or the details of the project, you can view more information like the status of the project, the details of the promoter, project completion date, and more.

Also read: Guide to Property Verification in India

Understanding RERA Terminologies

What is RERA Registration Number or RERA number?

Each project registered under RERA is assigned a unique registration number. This number is crucial for buyers and real estate agent as it verifies that the project complies with all the statutory norms under RERA. Potential buyers can use this number to check and verify the project details, status, and more on their state's RERA website.

What is a RERA Certificate?

A RERA certificate is a document that confirms a project's registration under RERA. It contains the project's unique registration number, details about the project, the promoter, and the scheduled completion date. This certificate is a mark of the project's credibility and compliance with RERA rules.

What is RERA Carpet Area?

The term "carpet area" under the Real Estate (Regulation and Development) Act, or RERA, refers to the net usable floor area within an apartment or commercial unit, including the internal partition walls of the apartment. It excludes the area covered by the external walls, areas under service shafts, exclusive balcony or verandah area, and exclusive open terrace area.

Key Differences between RERA Carpet Area vs Actual Carpet Area:

RERA carpet area has a standard definition across India and is aimed at providing transparency to buyers about the usable area within a property.
The term "actual carpet area" is not standardized and could vary depending on the developer's definitions or practices.
RERA ensures that the buyer is aware of exactly how much personal, usable space they will have, unlike the vague or inflated figures that were sometimes provided by developers before the act came into effect.
As per RERA, developers can only sell properties based on carpet area, which ensures that buyers get what they pay for.

Key Features and Provisions of RERA Act

Establishment of Regulatory Authority: The Act mandates the establishment of the Real Estate Regulatory Authority (RERA) in each state and union territory. Its function is to govern both residential and commercial real estate transactions.
Registration of Projects: Developers are required to register their projects with RERA before advertising or selling. Projects with a size of more than 500 square meters or more than 8 apartments must be registered.
Transparency: Developers are required to disclose all project details like project plan, layout, government approvals, land title status, contractors, architects, and others involved in the project.
Separate Escrow Account: Developers are required to deposit 70% of the collections from buyers in a separate account to be used only for the construction and land cost of that project.
Rights of Consumers: RERA gives buyers the right to access all information about the project. It also allows buyers to claim possession of the property and the association of allottees.
Carpet Area: The Act defines the 'carpet area' and requires developers to disclose it. The buyer pays for the carpet area (which excludes the thickness of the inner walls), not the super built-up area.
Delay in Projects: In case of delays, developers will be liable to pay the same interest as the EMI paid by the consumers.
Defect Liability: In case of any structural defects found within 5 years, the developer will be liable to rectify such defects without further charge within 30 days.
Real Estate Agents: Real estate agents also need to register with RERA. They will be given a single registration number to be used in all their advertisements.
Penalties: There are strict penalties for non-compliance with the Act, ranging from fines to imprisonment.

Also read: Comprehensive Guide to Owning Freehold Property

Dealing with Disputes and Complaints under RERA

Rights to Claim Compensation

Under RERA, homebuyers have the right to claim compensation if the developer fails to comply with the terms of the agreement. This could include delay in project completion, any loss due to defective title of the land, or poor quality of construction. The compensation provided should be enough to cover the loss or damage suffered, and it should also include the interest rate as prescribed.

How to File a Complaint under RERA

To file a complaint under RERA, follow these steps:

Step 1: Check the RERA registration of the real estate development project or agent you have a dispute with.

Step 2: If the project or agent is registered under RERA, go to the official RERA website of your state or Union Territory.

Step 3: Find the 'File Complaint' or similar section on the website.

Step 4: Fill in the required details in the complaint form, which usually includes your personal details, details of the project or agent, and the nature of the complaint.

Step 5: Pay the required fee for filing the complaint, if any. The fee structure may vary from state to state.

Step 6: Submit the complaint.

Applicable Penalties under RERA

Penalties For Developers:

Non-Registration of Projects: If a promoter fails to register their project with RERA, a penalty of up to 10% of the project's estimated cost can be levied. If the promoter continues to violate this provision, they may face imprisonment for up to 3 years, or fine which may extend to another 10% of the estimated cost of the project, or both.
False Information: If a promoter provides false information while applying for registration or updating project details, they may be penalized with up to 5% of the estimated cost of the project.
Non-compliance with RERA Orders: If a promoter fails to comply with any orders or directions of the RERA authority, they could face a daily penalty of up to 5% of the estimated cost of the project.

Penalties For Real Estate Agents:

Non-Registration: If an agent fails to register with RERA, they could face a penalty of up to Rs. 10,000 for every day during which the violation continues, which may cumulatively extend up to 5% of the cost of the plot, apartment, or building cost, as the case may be.
Non-compliance with RERA Orders: If an agent fails to comply with any orders or directions of the RERA authority, they could face a daily penalty of up to 5% of the cost of the plot, apartment or building, as the case may be.

Penalties For Homebuyers:

Non-Compliance with RERA Orders: If a homebuyer fails to comply with any orders or directions of the RERA authority or the Appellate Tribunal, they could face a daily penalty of up to 5% of the cost of the plot, apartment, or building, as the case may be.

Understanding the Benefits Offered by RERA

RERA Benefits for Home Buyers

Transparency: With all the project details being publicly available on the RERA website, buyers can make informed decisions. The Act mandates disclosure of project details, including project layout, timeline, completion status, and details of the promoter.
Accountability: Developers are obliged to use at least 70% of the sales proceeds for the construction of the project. This provision curtails the common practice of diverting funds to different projects, thereby delaying completion.
Timely Possession: Developers have to adhere to the project timeline submitted at the time of registration with RERA. In case of delays, buyers are entitled to claim a full refund or get compensated for the delay.
Quality of Construction: If there are any structural defects or quality issues within five years of the delivery of the project, the developer will have to rectify such defects without further charge.
Advance Payments: The Act restricts developers from taking more than 10% of the cost of the unit as an advance without entering into a written agreement for sale.
Grievance Redressal: RERA provides a mechanism for speedy and efficient redressal of buyer grievances. The Real Estate Appellate Tribunal needs to adjudicate cases within 60 days.
Clear Title of Land: Developers need to declare that the land on which development is proposed has a clear title. This can prevent potential legal issues for the home buyers.
Accurate Representation: Developers can sell units only on a carpet area basis, which means buyers get what they pay for. Earlier, units were often sold on the basis of super built-up area, which includes common areas like corridors and staircases, leading to confusion and misrepresentation.

RERA Benefits for Real Estate Agents

Standardization of Business Practices: RERA mandates the registration of real estate agents, bringing in an element of organization and professionalism to the sector. Agents now follow set protocols and standards, ensuring more fair and transparent transactions.
Increased Credibility: Registered agents are perceived as more trustworthy by potential customers because of the stringent rules and regulations they are bound by. This increases their credibility in the market.
Protection against Fraud: Since developers are also required to register their projects and disclose all the necessary information, this protects agents from fraudulent developers.
Redressal Mechanism: RERA provides a dispute resolution mechanism, making it easier for agents to resolve any conflicts that arise with developers or clients.
Transparency: As developers are required to update project status regularly, agents have accurate and timely information, which they can then pass on to prospective buyers.
Defined Role and Responsibilities: The responsibilities and obligations of agents are clearly defined under RERA, which prevents any confusion or conflict later.
Equal Penalties: The Act ensures there are penalties for buyers, developers, and agents in case of any non-compliance, creating a more balanced playing field.
Opportunity for Growth: With increased trust in the sector due to RERA, more people are likely to invest in real estate, leading to increased opportunities for agents.

Also read: Comprehensive Guide on Property Tax and Payment

FAQs

What Happens If Builder Does Not Follow the RERA Order?

If a builder does not follow a RERA order, RERA authorities have the power to impose penalties or take other actions. In extreme cases, the authority can even revoke the registration of the project. The builder may also face imprisonment for non-compliance with the orders of the RERA tribunal.

How to Check RERA Registered Projects and Find RERA-Approved Projects

Buyers can check RERA registered projects on the official RERA website of their respective states. The websites have a 'Registered Projects' section where you can enter the unique RERA registration number of the project for verification.

Is RERA-approved property safe?

A RERA-approved or RERA-registered property implies that the project has met the criteria set by the Real Estate (Regulation and Development) Act, 2016. It means that the developer has provided all necessary disclosures and is in compliance with the regulatory requirements, which include maintaining 70% of the funds collected from buyers in a separate escrow account to be used only for the construction of the project, among others.

While RERA registration increases the credibility of a project and provides a safety net for buyers, it does not completely eliminate all risks associated with real estate investments. Buyers should still perform due diligence, like verifying the developer's track record, checking the legal status of the land, and inspecting the quality of construction, among others.

Is RERA applicable all over India?

Yes, the Real Estate (Regulation and Development) Act, 2016 (RERA) is a central act that applies to all states and Union Territories in India. However, the implementation of the act is not uniform across the country. As land and land improvement is a subject on the State List under the Indian Constitution, the RERA Act allows each state and Union Territory to set up its own regulatory authority and formulate rules according to the local requirements while following the central framework of the Act.

What are the RERA rules for parking allotment?

According to RERA, the parking area is considered a common area, and hence it cannot be sold separately. It is included in the cost of the flat or unit that the buyer purchases. The builder cannot charge an additional amount for the parking space. Each buyer has the right to parking space, and the builder cannot deny this.

What are the RERA rules for redevelopment projects?

Redevelopment projects where new units are created also come under the purview of RERA. Builders must register these redevelopment projects with RERA and comply with all other rules of the Act, including maintaining 70% of funds in a separate account, providing all necessary details of the project, and ensuring the project's timely completion. The protection and rights provided by RERA to buyers also apply to those who are part of a redevelopment project.

How RERA will help buyers?

RERA has brought in several provisions aimed at protecting the interests of homebuyers:

Transparency: Developers are required to disclose detailed information about their projects, including the layout plan, timeline, status of statutory approvals, etc.
Accountability: Developers are required to park 70% of all project funds into a dedicated account. These funds can only be used for construction and land costs, which curbs the common practice of diverting funds to new projects.
Standardization: RERA mandates the sale of properties based on carpet area, which is the area within the walls of the apartment. This prevents malpractices where builders sold properties based on super built-up area.
Grievance Redressal: RERA establishes a real estate regulatory authority and an appellate tribunal in every state, where aggrieved buyers can file complaints against developers. These bodies are required to dispose of complaints within 60 days.
Fair Play: RERA imposes strict regulations to ensure accountability and fairness in the practices of real estate agents as well.
Compensation: RERA provides for compensation to buyers in case of delays in project completion. If the buyer wants to withdraw from a project, they are entitled to a full refund along with interest.

Understanding RERA and how to register under it is essential in today's real estate world. The need for RERA approval and registration arises from a commitment to fairness, transparency, and accountability in the sector. It might seem like a complicated process, but it's a safety net that protects both buyers and sellers. By comprehending these aspects, you'll be better equipped to navigate the real estate market confidently and securely. So, whether you're buying a home or launching a project, understanding RERA is a step you cannot afford to skip. It's not just a regulation, it's a pathway to smarter real estate decisions.