What is the Compliance of RERA under State?

The Real Estate (Regulation and Development) Act, 2016 came into the effect from May 1, 2017. Every builder, developer and construction giant has to adhere with the strict compliance under the RERA. The RERA Act mandates every project to be registered by the promoters with the respective State RERA offices, within 3 months from the commencement of the act. This article will help to provide you with the information relating to what is the compliance of RERA under the state.

Meaning of RERA Registration

The Registration of RERA is a state-wise registration process and hence differs from state to state. The process can be done online and applied from the official website of the state in which the registration is applied for. The real estate agents and promoters have to make submission of the relevant documents supporting the application for the process of registration to the Regulating Authority of the respective states.

Compliance of RERA under State

The registration of RERA is the beginning of the compliances of RERA under the provisions and regulations of the Act. It provides with the complete details of a project to the authorities of RERA and the public at large that ensures all the compliances are met. Some of the compliance of RERA under State is as follows: –

Upload of Plan/Agreement/Approval etc.

It is mandatory to publish the details along with the copy of the approvals, plans and agreement etc under the RERA Regulation, on the official website of the RERA Authority to allow the general public to view it.

Quarterly updating with the RERA

It is mandatory that every registered project must update the prescribed details relating to the project on the website of the respective State RERA Authority. And failure for the non-compliance of RERA under State shall result in the penal proceeding from the RERA Authority and heavy penalty.

Separate bank accounts needed for 70% of the receipts

Every developer is required to deposit 70% of the receipts from the customers in a separate RERA designated account as prescribed by the RERA law and it shall be used only for the project cost.

Comply with the prescribed process of allotment and booking

Certain responsibilities and obligations have been levied upon the developers under the RERA regulations, while the new flats or allotments are booked. Some of them are: –

• To ensure that the RERA registered agent does the transaction
• Making the approved plan available to the buyer
• The advance is not accepted more than 10% of the unit cost

Taking necessary insurance and approval

The developer or the builder is required to take all the necessary insurance and approval as considered essential by the state laws, according to the RERA regulations. Since the RERA regulations in respect to insurance are very confusing, detailed research is required in it.

Formation of allottee’s association

Every developer or builder, as prescribed by the State Government is required to form an association or society or co-operative society, under the RERA regulations. The society must be constituted within 3 months from the month in which the majority of flats are sold if nothing is specifically stated by the State government.

Timely completion and delivery of the project including the common area

Every builder is required to complete and deliver the project in time and give the possession of it within 3 months. The common areas shall be transferred to the association of the allottees.

Building quality review

The developer is required to review the quality of the building as per the RERA Law. And any defects in the structure shall be intimidated by the developer to the builder and the structure be rectified within 30 days of the intimation without any additional cost.

What are the penalties for non-compliance of RERA under State?

The RERA Act clearly states the penalties for the offences by the builders, promoters, real estate agents and any other parties who are involved under the ambit of this act. The penalties for non-compliance of RERA under State are as follows: –

• The penalty for not registering the project with the RERA Authority is 10% of the total estimated cost of the project.
• The penalty if the advertisement or the information regarding the project is found to be false is 5% of the estimated cost of the project for the promoter.
•  If any provision of the act is contravened, the penalty for the agent and promoter shall be 5% of the estimated cost of the project.
• If the order of the RERA is contravened or not been executed, the penalty for the allottee, agent and promoter will be up to 5% day wise.
• If the order of the Appellate Tribunal is contravened, the penalty for the allottee, agent and promoter will be up to 10%.

Other compliance of RERA under State regarding the Project Account

• It is mandatory for the developers to deposit the 70% funds of the project in a designated bank account. And only 30% can be used or withdrawn out of the total collection, without any restriction.
• The 100% of the amount realized from the allottees shall be deposited in the separate account if the estimated receivable of an ongoing project is not more than the estimated cost of completion of a project.
• Any withdrawal from the RERA account should be certified by the Engineer, Chartered Accountant or the Architect.
• The withdrawal from the RERA account should be in proportion to the percentage completion method.
• The withdrawal can be done for the purpose of land const or the payment of the construction of that project only.
• No Admin and Marketing Expenses can be done from using the amount from the RERA designated account.

Conclusion

With the help of the Real Estate (Regulation and Development) Act (RERA), 2016 the punishment and penalties for the misconduct or breach of terms and conditions of the builder buyer agreement are implied upon the builders and developers. The provisions of RERA Act have laid down rules and regulations for the compliance of RERA under State. The concerned Authority has the rights and powers to direct and impose the instructions as required under the act, for the builders and developers to perform diligently and further to protect the interest of the buyers and to help save them from any sort of financial burdens while dealing with the projects registered under RERA.

Also, Read: Complete Process to File a Complaint in RERA Delhi