How Many States Have RERA Act ?

What is RERA?

The full form for RERA is the Real Estate (Regulation and Development) Act, 2016. It was organised to regulate the country’s unorganised and unregulated real estate sector, as in the absence of an efficient regulatory system, incidents of tussle and disputes amongst  homebuyers and developers were on an increase.

The RERA Act of 2016 was introduced to deal with the concerns and grievances faced by numerous real estate developers, homebuyers, realty agents as well as stockholders of the  real estate sector. After the RERA Act was implemented, it could be seen that the prospective homebuyers prefer RERA approved projects.

Real estate projects which are produced on more than 500 sq m area are required to be  registered with respective RERA authorities. Also, every such builder will have to inform the respective homebuyers about progress of construction of the projects, as well as must  abide by the timelines, following the rules mentioned under the RERA Act.

RERA- Benefits for Homebuyers

The RERA Act broadly safeguards the interests of the home buyers. Some of the key benefits of the Act have been mentioned hereunder-

• With introduction of the RERA Act in India, developers are bound to disclose the details of the project on the official website of RERA, such details must be updated on a regular basis.
• The consumer or the home buyer would pay for flats on Carpet Area not on the Super built-up Area.
• 70% of the project fund would have to be transferred in a separate escrow projects by the developer, which must be used for construction purposes only.
• The developer is bound to pay an amount of about 2%, in case a delay is caused in the construction.
• After a project has been delivered, the developer is bound to provide a free of cost service to the respective home buyer for any construction defect on the property for a period of not less than 5 years.
• As per the provisions of the Act, the developer is bound to sort the issues of the homebuyers within a period of 120 days.
• Any alteration to the approved building plan could not be made by the developer without the consent of at least 1/3rd of the total home buyers. 
• According to the RERA Act, the maximum amount of advance a developer could collect from the homebuyers is 10%. 
• According to the Act, if there comes an issue to light about the title deed of the property, the homebuyer could ask the developer for compensation.

To better understand the provisions of the Act, it is advised that you seek legal consultation from experienced real estate advocates from the Sharks of Law. 

What are the Penalties under the RERA?

Penalties are imposed under the Act in case the promoters or the builders do not follow the laws provided under the Act. mentioned below are the list of penalties which could be imposed on a builder or developer if a home buyer files a complaint against him-

• A developer would have to pay an amount of around 10% of the total estimated cost of the project, in case the project has not been registered under the RERA. 
• In case the developer is found to have provided any false information of the project, he shall be fined with an amount of 5% of the total estimated cost of the project.
• If it comes to light that the provisions of the RERA Act have been violated by a developer, he could  be imprisoned for a term of 3 years or a fine of around 10% of the total estimated cost of the project.
• A real estate agent shall be liable to pay an amount of Rs.10,000 per day or an amount of up to 5% of the cost of the project, in case he or she is found to be  doing a construction or sales on such project which does not have a valid RERA registration.
• If it is found that a builder shows non-compliance with the decision of an  Appellate Tribunal, he or she may face imprisonment for a term of around 1 year, or charged with 10% of the total cost of the project, or both.
• Also, a homebuyer, when filing a complaint against the developer must be extra vigilant, as if such charges are found to be baseless or false in nature, the homebuyer would be charged with a penalty of around 5% of the total value of the project.
•  If a homebuyer is found to be in non-compliance with the Appellate Tribunal, he or she shall be charged with an amount of 10% of the total cost of the project  or an year of imprisonment.

How many states have the RERA Act ?

In a reply in the Lok Sabha on March 2023, M-0-S Housing and Urban Affairs Minister Kaushal Kumar told the House, that all the States and UTs have notified the RERA Act except for the state of Nagaland. 

By March 2023, 32 State and UTs have real estate regulatory authorities established, and 28 States and UTs have real estate Appellate Tribunals established.  

Conclusion-

Summing up, the RERA Act was introduced in the year 2016 with an intention of regulating the Real Estate Sector and enhancing transparency amongst such projects, as well as safeguarding the interest of the homebuyers and the real estate developers. 

To have a better understanding of the RERA Act, or if you wish to deal with any matter related to the RERA Act, it is advised that you seek legal consultation from an experienced advocate. 

Sharks of Law offers you professional advice for matters related to real estate matters from some of India’s best advocates.   

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