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Decoding Real Estate Regulatory Authority Act (RERA)

Real estate serves as a catalyst in gratifying the needs and demand of the housing and infrastructure in a country. Real estate sector is an important pillar of the economy.

Though in the recent years this sector has grown substantially and will continue to grow, the movement of people from rural areas to cities, the increase in the cost of land, and people looking for better standard of living has resulted in mushroomingof real estate projects in and around big cities.

RERA is an exclusive for the real estate sector, which aims to establish an authorityfor the benefits of the consumers of this sector. It also highlights the important issues which in past have created problems for homebuyers like delivery of the project on time, quality of construction etc.

Need for RERA

While in the recent years, the sector has grown significantly but it was unregulated and a need for regulating this sector was felt at different forums, especially with the default of big real estate groups like Jaypee Infrastructure, Unitech and Amrapali Group among others.

Real estate sector though a very dominant sector in the Indian economy was unregulated, it had no sectoral regulators like SEBI, IRDAI, TRAI etc. It is a well-known fact that whenever sectorial regulators are formed, they make the system robust.

Though the real estate sector consumers before the introduction of RERA Act could go to consumer courts under consumer protection act, 1986 for redressal of their grievances, but the recourse was only curative and not adequate to address all concerns of home buyers.

The present act is a special act which attempts to balance the interest of promoters of a project and homebuyers. It seeks to createregularity of information between home buyers and promoters.

The act intends to create transparency of contracts, set minimum standards of accountability and formation of fast track dispute forum. The act is in operation just like the motor vehicle act where state governments and union territories are required to frame their own rules in accordance to the central legislation, thus giving some degree of flexibility to states and UT’s.

The foremost objective of the act is to insure accountability towards homebuyers and protection of their interest. It introduces transparency, professionalism, and pan-India standardization and reduces frauds and delays.

Protection to home buyers under RERA

As a home buyer make sure before investing in a project that the promoter is registered with RERA authority and has a permanent registration number issued by RERA authority. If you are investing in property which is a re-sale property make sure that the project you are buying has received completion/occupancy certificate.

Section 4 (2) (1) (d) mandates   a promoter to enclose, along with the application for registration of real estate projects, a declaration supported by an affidavit, signed by the promoter or any person authorized by the promoter, stating that seventy percent of the amounts received for the real estate project from the home buyers shall (mandatory) be deposited in a separate escrow account to be maintained with a bank. Thus, restricting a common practice of promoters where they siphoned off funds meant for the project in other activities.

If upon revocation of the registration number by RERA authorities the authorities have the power to freeze the escrow bank account. The sole aim being, promoters do not swindle homebuyer’s investment.

Section 18 of RERA act provides a choice to home buyer to either choose possession or refund in case the promoter fails to complete or is unable to complete the project as per the agreement entered by the promoter and homebuyer.

Is it possible to file a case under the RERA tribunal as well as consumer forum simultaneously?

Even though RERA does not restrict the original jurisdiction of the NCDRC, it is not possible to file a case at RERA Tribunal as well as at NCDRC, at the same time. The aggrieved buyer has two options, either to approach RERA Tribunal or to approach Consumer Forum to address the grievance.

If a consumer takes the decision to approach NCDRC, the pecuniary jurisdiction of the court has to be kept in mind by him and if an allotteehas decided to approach RERA Authority, he will be guided by the Territorial Jurisdiction of the court.

Section 71 of the RERA Act lays down in its proviso that if a complaint in respect of matter which is covered under RERA Act is pending before the Consumer Forum then the complaint can be withdrawn from the Consumer Forum with the permission to file the complaint with RERA Authority.

What are the Rights and Duties of the allottee?

Section 19 of the RERA Act specifically mention some Rights and Duties which an consumer has with him when he enters into an agreement with the promoter, the rights and duties are mentioned below -

  • The consumer shall eligible toget the information pertaining to the sanctioned plans, the layout plans together with the specifications, approved by the competent authority and such other information as may be mentioned in the Act, or rules made thereunder or agreement for sale signed with the builder.
  • The consumer can enquire about the stage-wise completion of the project and schedule of the work, including the provisions for electricity, sanitation, water and other amenities and services as agreed between the builderand the consumer.
  • The consumer shall be entitled to claim the possession of apartment, plot or building, as the case may be, and the association of consumers that is Resident welfare association of the society shall be eligible to claim the possession of the common areas.
  • The consumer shall be provided with the plans of the project, including that of the common areas, after handing the possession of the apartment/plot by the builder.
  • Every consumer, who has entered into an agreement to buy an apartment/ plot as the case may be, under section 13 of the RERA Act, shallmake necessary payments within the time as specified in the agreement between the promoter and the consumer for sale and shall within proper time.
  • The consumer shall be liable to pay interest, at such rate as mentioned in the act, for any delay in payment towards amount or charges to be paid to the promoter by the consumer.
  • The obligations of the consumerand the liability towards interest may be reduced when there is a mutual agreement between the allottee and the builder.
  • Every allottee of the plot, apartment or building, willtake part in the formation of an association (RWF) or society or cooperative society of the consumers.
  • Every consumerwill take the physical possession, within a period of two months of issuance of the occupancy certificate to the builder by the State government authorities, of the plot or building as the case may be.
  • Every consumer shall participate towards registration of the conveyance deed of the apartment, plot or building, as the case may be.

Grievance redressal under the RERA Act

  1. If there is a delay in handing the possession of Apartment/Plot by the promoter or there is any deficiency in the allotted apartment, flat or plot whether structural or in any services agreed between the buyer and the promoter then the homebuyer can approach the RERA
  2. Authority established by the State government and can file his complaint with the authority.  RERA was formed with the idea to provide fast and time bound relief to the homebuyers and thus, a complaint filed with the authority has to be disposed of within sixty days by the authorities.
  3. In case the complainant/respondent is not satisfied with the order of the authority then the aggrieved party can approach the Appellate tribunal. The limitation for filling a complaint with the appellate tribunal is sixty days.
  4. In case a builder against whom an order to refund the money to the allotee is passed the builder has to deposit 30 percent of the penalty only then his appeal will be admitted and will also have file a calculation sheet and submit a soft copy of the appeal in a pen drive. The 30 percent penalty will also include the interest that has been awarded by the authority.
  5. Section 58 provides that any person aggrieved by the order of Appellate tribunal may go for an appeal against the order of the Appellate tribunal to the High court, but the High court will admit his appeal only if there is any substantial question of law which has to be decided as mentioned in section 100 of CPC by the High court.

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