UPCOMING REAL ESTATE (REGULATION AND DEVELOPMENT ACT),2016


  • Guidance on RERA for brokers and developers.
  • This guidance is made strictly on the basis of the RERA Act.
  • This is made with a view that developers get an awarness and can plan for future projects accordingly.
  • This Act will soon be implemented and which needs to be compulsorily followed by developers as well as brokers.
  • This guidance is subject to changes based on changes in the Act.
  • This is made in a simple language understandable by every single person.
  • RERA extends to the whole of India except the state of jammu & Kashmir.
  • Advertisement- Includes any notice, circular or other documents or publicity in any form, informing persons about a real estate project, or offering for sale of a plot to make advances or deposits for such purposes;
  • Allottee- Means the person to whom a plot, apartment or buildings, as the case may be, has been allotted, sold and includes the person who subsequently acquires the said allotment through sale, transfer or otherwise.
  • Carpet area-Net usable floor area of an apartment excluding areas covered by external walls service shafts, balcony, verandah, open terrace but includes area covered by internal partition.
  • Estimated cost- Means the total cost involved in developing the real estate project and includes the land cost, taxes, cess development and other charges;
  • Family -Includes husband, wife, minor son and unmarried daughter wholly dependent on a person;
  • Garage -Means a place within a project having a roof and walls on three sides for parking any vehicle, but does not include an unenclosed or uncovered parking space such as open parking areas;(means only stilt parking and no open parking).
  • Interest rate-Interest rate incase of promoter as well as allottee shall be the same. Promoter shall pay interest from the date of receiving payment till the date of refund. Allotte shall pay interest from the date of default till the date of payment.
  • Promoter- Person who constructs building consisting of apartments with the intention to sale. It also includes who develops land into project whether he constructs any structures or not with the intention to sale in the form of a plot.
  • Prospectus-It refers to any document, notice, circular etc, issued with the intention to sale and making people invest.
  • Real estate agent-This is a person who acts as a mediator to negotiate between buyer and seller and receives commission for such negotiation.
  • Not a single unit of the project can be sold without registering the project.
  • The date on which the act becomes applicable and the projects which have not received completion certificate shall register within 3 months.
  • Registration is not required where
    1. The land area does not exceed 500 sq mt or the no of units to be developed does not exceed 8 (inclusive of all phases).
    2. Where the promoter has received completion certificate.
    3. For renovation or repair which does not amount to selling of units.

Penalty: If the promoter does not fulfill the above condition he is liable to pay a penalty of 10% of the estimated cost of real estate project. If the promoter does not comply with the orders in this matter then he may be imprisoned for a term of 3 years.

  • Details of the company like name, address, proprietorship, partnership, company etc.
  • Details of project launched in last 5 years and their current status, whether it is being delayed, details of pending payments.
  • Authenticated copy of CC.
  • Sanctioned plan, layout plan, specification of the project.
  • Proposed facilities to be provided like fire fighting ,drinking water, use of renewable energy if any.
  • Location of the project alongwith clear cut boundary details given in the form of latitude and longitude from end to end.
  • Draft of allotment letter, agreement for sale and conveyance deed.
  • Number, type, carpet area of the units and the no and areas of garage (not open parking) for sale in the project.
  • Name and address of real estate agents, architects, engineers contractor etc.

Penalty: If the promoter does not fulfill the above condition he is liable to pay a penalty of 5% of the estimated cost of real estate project.

A declaration supported by affidavit shall be submitted stating

  • Promoter has legal title to land.
  • Land is free from encumbrances , if any it shall be mentioned.
  • The time taken to complete the project.
  • 70% of amout realized from allottees shall be maintained in a separate a/c in a scheduled bank.
  • Amount can be withdrawn from the separate a/c only in proportion to percentage complete of the project.
  • Such withdrawal is permitted only after being certified by a chartered accountant, architect and engineer.
  • Such accounts shall be audited by a chartered accountant within 6 months from the end of financial year and shall certify that amounts have been utilized for the purpose.

Registration will be granted or rejected within a period of thirty days (no rejection unless an opportunity of being heard given to the applicant).

  • If the authority fails to grant or reject the application in 30 days then it is deemed to be registered on the 31st day.
  • The registration shall be valid for a period as declared by promoter in the declaration (that is the possession date).
  • Extension can be granted to promoter on making an application only in case of major force and such extension shall not exceed 1 year.

Note: Major force means a case of war, flood, cyclone etc caused by nature.

Authority may revoke the registration after being satisfied that

  • Promoter makes any default with respect to the rules and regulation of this act.
  • Violates the terms and condition of the approval granted by BMC.
  • Promoter is involved in “unfair practices”
    Note: “unfair practice” means
    1. Making false representation in visible or in writing that services are of particular standard.
    2. False representation that promoter has approvals when actually he does not have it.
    3. Promoter permits publication of any sort of advertisement which is not intended to be offered.
  • The registration cannot be revoked unless notice given to promoter of minimum 30 days.
  • Authority shall mention the name and photograph of the promoter on the website in the name of defaulter.
  • Authority shall direct the bank to freeze the separate bank account maintained in a scheduled bank.
  • In case of revocation of registration further the project shall be completed by association of allottees or by the authority itself.
  • No such action will be taken by authority unless time for appeal has expired.
  • In case of revocation of registration, association of allottees shall have the first right to refuse to complete the project.
  • No real estate agent can facilitate sale of any unit in any real estate project registered under RERA without registering himself.
  • The authority may grant or reject the application in such time as it may deem fit.
  • Registration shall be valid for a particular time period after which the agent may need to renew his registration.
  • Registration may be revoked or suspended if agent found commiting any breach of law.
  • Agent shall not make any statement whether orally or in representation or in writing which is supposed to be false.
  • No agent shall work in the project which is not registered with the RERA.
  • Agent shall maintain books, documents, records as prescribed.
  • No agent shall involve in unfair practice (unfair practice has same meaning as explained earlier).

Penalty: If the agent does not fulfill the above condition he is supposed to pay a penalty 10,000 (ten thousand) per day upto maximum of 5% of the cost of apartment or plot etc.

  • Promoter shall enter all details of the project on the authority’s website for public viewing that is : details of registration, list & no of apts booked, no. of garages booked, status of the project, approval (these details need to be updated quarterly).
  • The brochure shall contain the address of the website where all the details are uploaded.
  • At the timing of booking the promoter shall make available to the allottee sanctioned layout plan and stage wise time schedule of completion of the project.
  • Promoter is responsible for all the duties as per the act and agreement till conveyance and in case of structural defect promoter is responsible even after conveyance.
  • Promoter is responsible to obtain OC & BCC as the case may be.
  • Incase of leasehold land lease certificate shall be obtained by the promoter.
  • Promoter is responsible for maintaining essential service till the taking over of the maintenance by the association of allottees.
  • Promoter shall enable the formation of association of allottees (that is forming a society).
  • Promoter shall execute a registered conveyance deed.
  • Promoter shall be responsible for the payment of all outgoings unless physical possession is given to the allottees incase of any default promoter shall be responsible even after the possession and shall borne the penalty charges as well as the cost of legal proceedings undertaken by the allottee.
  • If the unit is sold and then mortgaged then allottee’s rights shall not be affected.
  • Allotment can be cancelled only in the terms of agreement.
  • If a person invests in a project on the basis of false or misleading brochure , advertisement or any other form of misrepresentation then promoter is liable to compensate for the loss caused and if he intends to withdraw from the project then promoter shall refund the entire amount alongwith interest.
  • The promoter can accept maximum upto 10% of the cost of the apartment , plot etc before registration of the unit.
  • Once the layout and plans are approved by BMC and they are disclosed to the prospective buyer who agree to buy the unit , then afterwards no changes in the plans can be made. However with prior approval 2/3rd of the allottees the plans can be changed. Promoter can make minor alteration without consenting allottees where it is necessary and is approved by the architect or an engineer.
    note 1: For the purpose of 2/3rd of allottees each allottee shall be counted as 1 irrespective of no of units owned by him.
    note 2: Minor alteration excludes structural changes including an addition to the area or change in height or to change or close any required way of access etc.
  • Incase of any structural defect or defect in workmanship or quality or any other obligations of the promoter as per the agreement for sale is brought to the notice of promoter within a period of 5 yrs from the date of handing over the possession then promoter shall rectify such defects within a period of 30 days and if the promoter fails then he shall compensate the allottee.
  • The promoter shall not assign or transfer majority of his rights and liabilities in respect of a real estate project without obtaining prior written consent from two-third allottees, except the promoter, and without the prior written approval of the Authority. Such transfer shall not affect the allotment made by the erstwhile promoter.
  • On transfer being permitted the new promoter shall independently comply with all the laws and pending obligations and such transfer shall not lead to extension of the time required to complete the project and the new promoter shall be liable for any breach or delay.
  • The promoter shall obtain insurance for the title of land & building and construction of real estate project. Promoter is liable for the premium and the insurance should stand at the benefit of the association of allottees. All the documents relating to insurance shall be handed over to association of allottees.
  • Conveyance deed shall be transferred in favour of association allottees within 3 months from the date of issue of OC.
  • Promoter shall hand over all the documents to association of allottees within 30days from the date of issue of OC.
  • If the promoter fails to give possession as per the terms of agreement or due to discontinuance as a developer then he shall return the investment of the allottee alongwith interest if the allottee wishes to withdraw and if the allottee does not wish to withdraw then promoter is liable to pay interest for every month of delay till handing over the possession.
  • Allottee shall be entitled to obtain information relating to plans, stage wise completion of project, provision for water, sanitation, electricity.
  • Allottee shall be entitled to claim for possession on the date as mentioned in the declaration given by promoter.
  • Allottee is entitled to claim refund alongwith interest in case of the promoter unable to give possession.
  • Allottee shall be entitled to have all the documents and plans including that of common area after handing over the physical
  • possession.
  • Allottee shall pay all his dues on time (flat payment,registration charges, municipal taxes etc).
  • Allottee shall pay interest in case of default in payment.
  • Every allottee shall take physical possession of the apartment within 2 months from the date of issue of OC.
  • Any person can complaint to the authority at any time.
  • The functions of the authority.
    1. To register and regulate real estate projects and agents.
    2. To maintain a website of records of all the real estate projects.
    3. To maintain database and make available the names and photographs of the default promoters. To ensure compliance of its rules and regulations.
  • The authority may on its own or on complaint being received, may call any promoter, agent or allottee to furnish such information. The authority shall have the powers of civil court.
  • The authority may restrict any promoter, agent or allottee to carry on any act which it finds necessary to do so.
  • The authority may rectify its mistake apparent from record within a period of 2 years from the date of passing the order.
  • If the promoter or the allottee fails to pay the dues it may be recovered as arrears of land revenue.
  • Order of the authority can be appealed in REAT provided that promoter first pays atleast 30% of the penalty or the total amount to be paid to allottee including interest and compensation.
  • The appeal to REAT shall be preferred within a period of 60 days from the date of receipt of the order of the authority.
  • Appeal in REAT shall be disposed of in a period of 60 days if due to some reasons it cannot be disposed off then reasons shall be recorded in writing.
  • REAT shall have the same powers as that of civil court and it shall not be bound by the procedures of Indian Evidence Act,1872.
  • The appeallant may appear in person or his chartered accountant or company secretary or any legal practitioner or any of his officer to present the case.
  • If any person aggrreived by the order of REAT may appeal in high court within a period of 60 days from the date of receipt of the order of REAT.
  • For contravention of any section of RERA penalty may extend upto 5% of the estimated cost of the project.
  • If promoter fails to comply with the orders of the authority then he shall be liable for everyday penalty which may extend upto 5% of the estimated cost of the project
  • If promoter fails to comply with the orders of the REAT then he shall be liable for everyday penalty which may extend upto 10% of the estimated cost of the project or with imprisonment which may extend upto 3 years or with both
  • If agent fails to comply with the orders of the authority then he shall be liable for everyday penalty which may extend upto 5% of the estimated cost of the apartment of the plot for which the agent is a mediator
  • If agent fails to comply with the orders of the REAT then he shall be liable for everyday penalty which may extend upto 10% of the estimated cost of the apartment of the plot for which the agent is a mediator or with imprisonment which may extend upto 1 years or with both
  • If allottee fails to comply with the orders of the authority then he shall be liable for everyday penalty which may extend upto 5% of the estimated cost of the apartment of the plot
  • If agent fails to comply with the orders of the REAT then he shall be liable for everyday penalty which may extend upto 10% of the estimated cost of the apartment of the plot or with imprisonment which may extend upto 1 years or with both
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