What is RERA? Know all about RERA Act 2016 | Registration, Benefits, Penalty

The real estate market in India witnessed a historic change when RERA started in 2016. Homebuyers in India have been facing several challenges while dealing with real estate such as project delays, false advertisements, non-transparency, and unfair practices by some developers. The RERA Act 2016 came as a relief to such people who faced these challenges.

Interested in learning more about the RERA Act, its registration process, and its benefits. Then, read on to learn all about the RERA Act and also about the penalties under this act so that you don’t make mistakes in making any important decision in the real estate market.

Table of Contents

• RERA
• How is the RERA Registration Done
• Benefits of the RERA Act
• Penalties Under the RERA Act
• How to Find RERA-Approved Projects

What is RERA?

The RERA full form stands for Real Estate Regulatory Authorities. It is a powerful legislation that was introduced with the objective of regulating the real estate sector in India. It establishes state-level Real Estate Regulatory Authorities to oversee and resolve disputes. This thoughtful act applies to both residential and commercial real estate projects. It mandates that all real estate projects more than a certain size must register with the authority before they proceed with any kind of advertising, selling, or booking. The sole aim is to make way for fair practices in project sales, and delivery in the real estate sector.

How is the RERA Registration Done?

The RERA Registration procedure may vary for different states, but the general steps are mentioned below for your quick understanding:

Step 1: Visit the state RERA official website

Step 2: Fill up the RERA registration form for the specific state authority

Step 3: Submit all the essential documents along with the registration form

Step 4: Make the applicable fee payment as specified by RERA

Step 5: The authority will review the application and if accepted, it will issue a RERA registration certificate to the real estate agent or the promoter

Suggested read: RERA Haryana

What are the Benefits of the RERA Act?

The RERA Act 2016 offers multiple benefits to people dealing in the real estate industry; be it the buyers, sellers, or developers. You will be able to understand the main advantages of the RERA Act 2016 by reading these pointers:

1. Makes Real Estate Projects 100% Transparent: Since the RERA Act makes it mandatory for all real estate projects to be registered with the regulatory authority; it ensures 100% transparency and prevents fraud.
2. Enhances Trust in the Market: Likewise, by promoting transparency and accountability, as we just mentioned above, the RERA Act builds trust among homebuyers and investors. Since the developers must adhere to the regulatory guidelines, individuals and investors feel more confident while investing in a property.
3. Ensures Timely Project Completion: On the other hand, the RERA imposes strict deadlines for project completion just to ensure that developers deliver homes without delays. In case, there are delays, developers are made to compensate buyers, which helps protect consumer interests.
4. Promotes Affordable Housing: At the same time, the RERA Act simplifies the approval processes to encourage the development of affordable housing. This approach helps deal with the problem of property shortage in urban areas and makes homeownership accessible to more and more people.
5. Boosts Housing Sector: By establishing a structured regulatory framework, the RERA Act boosts investor confidence and encourages investment in the housing sector. This increase in investment ultimately leads to increased housing supply, makes it a win-win situation for both buyers and developers, and stimulates overall economic growth.

What are the Penalties Under the RERA Act?

You now know what is RERA Act 2016 is, its registration, and its benefits; so, it is time we enlighten you with the penalties under the RERA Act:

1. For Real Estate Agents: The real estate agents must get a single registration number for every state or union territory. This registration number must be included in all their transactions. Any failure to register this may attract a daily penalty of Rs. 10,000, which may go up to 5% of the total cost of the project.

2. For Promoters:

• Promoters who fail to register their real estate projects are liable to face penalties of up to 10% of the project’s estimated cost. Additionally, those not complying with the state RERA orders might face imprisonment for up to 3 years or an additional fine of up to 10% of the total cost of the project.
• Promoters who violate the Appellate Tribunal orders severely may face imprisonment of up to 1 year, or a fine of 10% of the total project cost, or both.
• Promoters who do not comply with the RERA Act at all may incur a daily fine of up to 5% of the estimated cost of the project until they initiate the corrective measures.

3. For Buyers: Buyers who fail to comply with the RERA orders are liable to face penalties of up to 5% of the cost per day of the project. Additionally, those not complying with the Appellate Tribunal may face imprisonment for up to 1 year, or a 10% project cost penalty, or both.

Suggested read: Karnataka Rent Control Act

How to Find RERA-Approved Projects?

Understanding what RERA-approved means is also crucial for making the right decisions whenever one is searching for a property investment opportunity. RERA-approved projects mean that they comply with the regulations set forth by the Real Estate. Enlisted below are the steps to guide you in finding RERA-approved projects:

Step 1: Go to the official website of RERA of your specific state

Step 2: Using the search option search for the RERA-approved projects. For this, you can enter the builder, project, or location name

Step 3: Up next in the third step, check the valid RERA registration number, which will ensure whether it is approved or not

Step 4: Make sure to verify the RERA details including the approval status, project timeline, and builder information that are listed on the RERA official website

Step 5: Last of all, ensure contacting local RERA offices or the real estate agents to get additional information as well as the confirmation status of the project approvals

The RERA Act, 2016 has indeed taken India one step ahead in its journey towards a transparent and regulated real estate sector. Whether you are a first-time homebuyer or a regular investor, understanding RERA is crucial for making decisions in the real estate world for which you don’t repent at a later stage. In a nutshell, RERA ensures a win-win scenario, driving growth and trust across the sector.

FAQs about RERA Act