Filetype PDF | Posted on 19 Sep 2022 | 4 years ago
Authentication
digital resources
335x Filetype PDF File size 0.70 MB Source: www.penacclaims.com
Volume 11, July 2020 ISSN 2581-5504
“RERA Act: A Critical Analysis”
Nithi
VIT University,
Chennai
CHAPTER I
STATEMENT OF PROBLEM
The Real Estate Regulation Act (RERA) act has been enacted in the year 2016 and was
enforced in the year 2017 for the development of the real estate sector. It is important to bring
in an act for the real estate sector as the real estate industry is growing and there are so many
investors. The act will help in bringing transparency. As it was an unorganized sector, there
were too many loopholes and black money was too huge, the transactions also were unable to
be tracked and therefore to curtail all these issues and the loopholes this act was enacted.
Though the RERA act is for the benefit of the public, the people who are involved in this real
estate sector are facing a lot of trouble. The RERA act has mainly focused on the public and
this act is affecting the economy of the Real estate sectors and at the same time they have
been facing a lot of trouble in their business.
OBJECTIVES
1) To understand the importance and the need for the RERA Act.
2) To determine and analyze the effect of the RERA act on India's economy.
3) To understand the extent to which the RERA act has affected the business and reduced
risk for the people.
SCOPE
This research’s key focus shall be on how the RERA act has affected the business and the
economy of the country. It will also focus on the development and challenges of the act. The
research focuses on the importance of the RERA and the importance for all the states to
follow the act. It also focuses on the issues faced by the builders and all other people in this
sector after the enforcement of the RERA. The RERA act is for the development and
regulation of the real estate sector but at the same time it has also highly affected the business
and this research focuses on the ways the act could bring few amendments which can help
both the public and the real estate sector.
ABSTRACT
Real estate industry in recent times is facing many challenges. The real estate industry is one
of the most globally recognised industries. The real estate market in India is currently in the
midst of fairly challenging times. In this paper a detailed analysis on, to what extent the
development has affected the industry and what are the pros and cons will be discussed also,
the RERA act will be discussed in detail. The paper also explains in detail how the buyers are
benefited by the act and how the RERA has reduced burden. RERA has been enacted only in
www.penacclaims.com Page 1
Volume 11, July 2020 ISSN 2581-5504
the year 2016, but has created a huge impact. In this paper the effect of COVID-19 on the
real estate sector will also be explained in detail and the importance to make few
amendments will be mentioned. The final part of the paper will contain the suggestion and
the conclusion.
CHAPTER II - INTRODUCTION TO THE RERA ACT
2.1 What is RERA?
The RERA (Real Estate Regulations & Development Act) was enacted to establish the real
estate sector. The real estate sector is a growing sector and is contributing a lot for the
development of the Indian economy however, there has to be a law to keep and to keep a
check on this the RERA has been enforced. RERA aims at public welfare and bringing
transparency.
BACKGROUND: The real estate sector plays a vital role in fulfilling the demand of housing
and infrastructure. While the sector is being expanded, there are issues faced by the
consumers due to delay in handing over or completion, or not agreeing to terms or delay in
registration and no transparency in the industry. These were the major issues faced by the
consumers and therefore to avoid those problems, the RERA was enacted
The Union Govt. being aware of rampant abuse and malpractices involved in the real estate
sector has enacted this act which seeks to promote and regulate the activities of construction
and sale of building, apartments in the buildings- residential or commercial and carved out
throughout the country, except the state of Jammu and Kashmir. The Real Estate Bill was
passed by the Rajyasabha and the Loksabha on 10.03.2016 and 15.03.2016 respectively and
assented to by the President on 25.03.2016. The same was published in the official gazette on
1
26.03.2016.
RERA has made it easy for the consumers and there are different rules for different states.
The basic structure of the act is the same, but some tweaking has been allowed to the state as
per their requirement.
2.2 TERMS AND EXPRESSIONS
ADVERTISEMENT: The term advertisement is defined in Sec.3 of the RERA. It says that
advertisement means any document described or issued as advertisement through any
medium and 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, building or
apartment or t make advances or deposits for such purposes2
1 Real Estate (Regulation and Development) Act, 2016, 3rd edition KK Ramani NC Jain/ page12
2 Real Estate (Regulation and Development) Act, 2016, 3rd edition KK Ramani NC Jain/ pg: 35
www.penacclaims.com Page 2
Volume 11, July 2020 ISSN 2581-5504
ALLOTTEE: Allottee is a person to whom the building or flat or plot is sold. A person to
whom it is allotted is called the allottee and the allottee can also be a person to whom the
property is transferred.
CARPET AREA: The carpet area is the net usable floor area of an apartment, excluding the
area covered by the external walls, area under services shafts, balcony etc. It includes all the
internal partition walls of the apartment
SUM OF ALL AREA= CARPET AREA
BUILT UP AREA: Built up area includes the external and internal walls, the carpet area and
the utility ducts and interior parts.
CARPET AREA +AREA OF WALLS + UTILITY AREA & INTERIOR PART =
BUILT UP AREA
SUPER BUILT UP AREA- The super built up area includes the built up area of the property
and the common areas like the clubhouse, Swimming pool (proportionate to the house)
BUILT UP AREA + PROPORTIONATE COMMON AREA = SUPER BUILT UP
AREA
2.3 Why RERA ?
The implementation of RERA was to bring in uniformity and transparency. Before the
RERA, there had been many issues between the consumer and the suppliers. They had to face
a lot of problems, but at the same time they could not do anything about it as there were no
proper rules and regulations. The consumers were the ultimate to suffer all these issues and
the delay has been the biggest problem. there are few more issues faced and hence this act
was enforced
● Security: The money received from a project will remain in the respective escrow
account, that is each project will have a different account and any payment made for
the project related will be made only in that particular account.
● Transparency: It is important for the buyer to submit all the proof and documents for
all the projects they take. The builders can not make any changes without the consent
of the consumers. This helps in bringing a smooth transaction.
● Fairness: RERA has now set up the carpet area, built up area but not super built up
area. If there is any delay in the completion the builders are entitled to bare the
expenses for the delay.
● Quality: The builders are entitled to rectify any default within 5 years of the
purchase. The issue must be rectified within 30 days.
www.penacclaims.com Page 3
Volume 11, July 2020 ISSN 2581-5504
● Authorisation: Registration is important, without the registration a regulator can not
advertise or sell the buildings.
2.4 SALIENT FEATURES OF THE ACT
The RERA act was enacted specifically for bringing in transparency between every person
involved and for a better relation between the consumer and the agent. The following are the
features of the RERA Act;
● This authority will monitor as well as adjudicate and arbitrate any disputes with
respect to real estate projects in the concerned state.
● Establishment of a fast-track mechanism for settlement of disputes. This will be done
via an appellate tribunal and dedicated adjudicating officers.
● All real estate projects must be registered with RERA. They can also refuse the
registration of a particular project if guidelines have not been adhered to.
● A project’s registration can be cancelled if RERA receives any complaints that are
found to be true after an inquiry has been made.
● If a property is not registered under the RERA, it cannot be sold.
● All the details related to the plot, building or any other matter related to registration or
anything, should be uploaded in the website of RERA. It should always be updated.
● An approval or rejection will be given within 30 days, and if there is no information
regarding it, it’s considered to be accepted
● If a promoter wishes to require an application fee or an advance payment from a
buyer for a plot, apartment, or building, it can't be quite 10% of the price.
Additionally, an advance payment or the appliance fee is taken just once the promoter
enters into a legal instrument with the client regarding the sale of the property and this
sale has been registered.
● All promoters will need to obtain insurance on the title of the building, the land, and
also the construction of every project.
● 70% of the number collected from the buyers for a project has to be deposited in an
exceedingly separate account. This account, ideally, should cover the value of
construction and of the land. It can only be withdrawn after the promoter receives
certification from an architect, a controller, and an engineer.
● As a promoter, if you would like to transfer or assign a majority of your rights and
liabilities in an exceedingly property project to a 3rd party, you may need to get prior
written consent from two-thirds of the allottees (not including the promoter).
Additionally, you may need the written approval of RERA.
● If there's any default from the side of the promoter or the customer, both are at risk of
paying an equal rate of interest.
● If the promoter causes any losses to the customer because of people's assumption to
property (defective title of land) which is under construction or has been constructed,
the promoter will need to compensate the customer. there's no limitation provided by
any law currently with relation to the compensation amount.
www.penacclaims.com Page 4
no reviews yet
Please Login to review.
