INTRODUCTION:

Real estate sector has been making rapid strides in recent times and has emerged as one of the
most important contributors to Indian economy. The sector besides witnessing a slowdown trend,
continues its metamorphosis from being largely fragmented and unorganized to become as
structured and organized as its peers in developed economies across the globe.
Amandeo defines real estate as real, or physical, property. A few groups of experts opined that
the word ‘Real’ comes from the Latin root res, or things. To some others, the word ‘real’ is
derived from the Latin word rex, meaning ‘royal’. They argued that since all the kings used to
own all land in their kingdoms.
Real estate is one of the oldest and most preferred assest of by all classes as. It refers to land as
well as any physical property or improvements affixed to the land, including houses, building,
landscaping, fencing, wells, etc.
For example, vacant land and residential lots, plus the houses, outbuildings, decks, trees, sewers
and fixtures within the boundaries of they property are treated as real estate. It is, thus, a property
which includes land, buildings, air rights, above the land and underground rights, below the land.
In view of the above, Parliament enacted the Real Estate (Regulation and Development)Act,
2016 which aims at protecting the rights and interests of consumers and promotion of uniformity
and standardization of business practices and transactions in the real estate sector.
With the real estate sector after getting a push from the Union Budget 2017-18, the
implementation of a single regulator RERA, the announcement of ‘infrastructure status’ to the
affordable housing sector, can serve as a significant step in achieving the government’s ‘Housing
for All by 2022’ mission.
These could be game changing steps for developers who already have a good presence in the
market. Further, the Central Government has identified 305 cities and towns under the housing
for all by 2022 mission (Pradhan Mantri Awas Yojana), to build 2 crore homes for urban poor by
the year 2022. This mission is expected to need 38 million workforce by 2030 from 29 million at
present, predicted to be the key job creator.

This Act will be put in operation just like the Motor Vehicles Act passed by the Central
Government, pursuant to which respective State Governments (“SG”) and Union Territories
(‘UT”) are required to notify their own Rules, which would be in the lines of the Central Act and
accordingly administer their own State Rules. Accordingly, every SG and UT areto required to
promulgate their own Real Estate Rules which would be based on thelines of the central Real
Estate (Regulation and Development) Act 2016, and establish aReal Estate Regulatory Authority
(“RERA”) pursuant to the Rules, which will administer the respective Real Estate Rules of the
State or UT. State Governements and UTs wererequired to notify and enforce RERA by 1st May
2017, which was the deadline set by the the Central Government.
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Important Definitions:
"Building": includes any structure or erection or part of a structure or erection which
is intended to be used for residential, commercial or for the purpose of any business,
occupation, profession or trade, or for any other related purposes.

"Carpet area" means the net usable floor area of an apartment, excluding the area covered by
the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive
open terrace area, but includes the area covered by the internal partition walls of the apartment.

"Immovable property" includes land, buildings, rights of ways, lights or any other benefit
arising out of land and things attached to the earth or permanently fastened to anything which is
attached to the earth, but not standing timber, standing crops or grass.

"Occupancy certificate" means the occupancy certificate, or such other certificateby whatever
name called, issued by the competent authority permitting occupation of any building, as
provided under local laws, which has provision for civic infrastructure such as water, sanitation
and electricity.

"Promoter" means, a person who constructs or causes to be constructed an independent

building or a building consisting of apartments, or converts an existing building or a part there of
into apartments, for the purpose of selling all or some of the apartments to other persons and
includes his assignees.

"Real estate project" means the development of a building or a building consisting of

apartments, or converting an existing building or a part thereof into apartments,or the
development of land into plots or apartment, as the case may be, for the purpose of selling all or
some of the said apartments or plots or building, as the case may be, and includes the common
areas, the development works, all improvements and structures thereon, and all easement, rights
and appurtenances belonging thereto.

"Sanctioned plan" means the site plan, building plan, service plan, parking andcirculation plan,
landscape plan, layout plan, zoning plan and such other plan andincludes structural designs, if
applicable, permissions such as environment permissionand such other permissions, which are
approved by the competent authority priorto start of a real estate project;
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WHAT IS RERA?
The RERA is an Act passed by the Indian Parliament. The Rajya Sabha passed the RERA bill on
March 10, 2016 followed by the Lok Sabha on March 15, 2016 and it came into force from 1st
May, 2017. Under the Act, the Central and State Governments are required to notify their own
rules within the six months of the implementation of the Act as per the model rules framed under
different sections of the central RERA Act.
The Act was introduced with the intent of bringing in more transparency in the existing real
estate sector in the country with rebalancing the lopsided buyer-builder relationship.

Objectives of RERA:
The objectives of the Act are:

 Toensure accountability towards allottees and protect their interest

 To provide to the nation a unified legal regime in the real estate sector
 To standardise the practice related to purchase and sale of real estate in the country
 To establish a proper regulator for the real estate sector
 To reduce fake sale due to compulsory registration of the projects
 To reduce delay in possession by creating reserve account under the Act
 To monitor the progress of the project due to continual disclosure by promoters
 To standardise sales agreement
 To make clarity in various terminology used in the real estate sector
 To make real estate purchase simpler
 To bring better accountability and transparency
 To guide state/UTs and monitor their activities based on a central regulation
 To impose certain responsibilities on both promoter and allottees
 To establish regulatory oversight mechanism to enforce contracts

Scope of RERA:
The scope of RERA includes:

 To adopt better corporate governance and disclosure practices in the sector

 To increase financial transparency in the sector
 To attract investments in the sector
 To manage effectively the investments in the sector
 To increase in quality in the sector
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 To increase demand of real estate projects than its supply

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 To attract more and more middle class families into the sector
Salient Features of the Real Estate (Regulation and Development) Act, 2016:

 Establish the Real Estate Regulatory Authority for regulation and promotion ofthe real
estate sector

 Ensure sale of plot, apartment of building, as the case may be, or sale of real estate
project, in an efficient and transparent manner

 Ensure protect the interest of consumers in the real estate sector

 Establish an adjudicating mechanism for speedy dispute redressal and also to establish
the Appellate Tribunal to hear appeals from the decisions, directions or orders of the
Real Estate Regulatory Authority (RERA)

 Regulates transactions between buyers and promoters of residential real estate projects

 Establishes state level regulatory authorities called Real Estate RegulatoryAuthorities

(RERAs)

 Residential real estate projects, with some exceptions, need to be registeredwith RERAs

 Promoters cannot book or offer these projects for sale without registering them. Real
estate agents dealing in these projects also need to register with RERAs

 Registration, the promoter must upload details of the project on the website of Real
Estate (Regulation and Development) 6 Act, 2016 (RERA) real estate project

 Amount collected from buyers for a project must be maintained in a separatebank

account and must only be used for construction of that project. The state government can
alter this amount

 Right to Legal Representation on behalf of Client by Company Secretaries or chartered

accountants or cost accountants or legal practitioners

 Imposes stringent penalty on promoter, real estate agent and also prescribes
imprisonment.
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Advantages of RERA (Real Estate Development and Regulation Act)

 Information about carpet area

 No sale without registration:
 Proper permissions and approvals
 Information about other projects of Promoter
 Drafts of buyer documents available for review
 Restriction on collection of advance payment: Promoter is not allowed to take payment of
more than 10 % of the cost of the apartment without entering into an ATS and duly
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registering it.  Consent from the buyers required

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 Promoter cannot change

  (i) sanctioned building / layout plans,
 (ii) specifications and / or
 (iii) assign its rights / liabilities in the Project, without obtaining consent of 2/3rd of the
buyers in the Project.
 Defect Liability Period: Promoter is liable for any structural defect or any other defect in
workmanship, quality, or provision of services in the Project for a period of 5 years. 
Similar Rate of Interest: Buyer would be entitled to same rate of interest as is charged by
the Promoter.

REGISTRATION OF REAL ESTATE PROJECT:

Many developers across India follow a common practice of pre-lauching a project without
securing requisite approvals for the project from the local authorities, which is termed
as “soft launch”, “pre-launch” etc. Buyers also lap into this opportunity as they get
discounted prices during the pre-launches period. But if it is from a developer who is
unscrupulous or a fly by night operator, then it carries a great risk.
Hence, to plug thisgap, registration of every project with the regulatory authority has been
mandatory before it is launched for sale and for registration the basic pre-requisite is that the
developer must have all the requisite approvals. Thus the buyer is protected as the
project is ring-fenced from the vagaries of non-approvals or delays in approvals which
are one of the major causes of delay for the project.

Prior Registration of Real Estate project with Real Estate Regulatory

Authority:

 A promoter shall not advertise, market, book, sell or offer for sale, or invite persons to
purchase in any manner any plot, apartment or building, as the case may be, in any real
estate project or part of it, in any planning area, without registering the real estate project
with the Real Estate Regulatory Authority established .
 The projects that are ongoing on the date of commencement of this Act and for which the
completion certificate has not been issued, the promoter shall make an application to the
Authority for registration of the said project within a period of three months from the date
of commencement of this Act.
 Authority in the interest of allottees, for projects which are developed beyond the
planning area but with the requisite permission of the local authority, it may, by
order,direct the promoter of such project to register with the Authority, and the provisions
ofthis Act or the rules and regulations made there under, shall apply to such projects from
that stage of registration where the real estate project is to be developed in phases, every
such phase shall be considered a stand alone real estate project, and the promoter shall
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obtain registration under this Act for each phase separately.

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Projects exempt from the ambit of the Act

 Where the area of land proposed to be developed does not exceed five hundred
square meters or the number of apartments proposed to be developed does
not exceed eight, inclusive of all phases;
 Where the promoter has received completion certificate for a real estate project
prior to commencement of this Act;
 For the purpose of renovation or repair or re-development which does not involve
marketing, advertising selling or new allotment of any apartment, plot or building, as
the case may be, under the real estate project.

Application for Registration of real estate projects:

STEPS:

1. Applicant has to file an application for registration with RERA in prescribed

form along with prescribed fees and documents

2. Application for registration must be either approved or rejected within a period of 30 days
from the date of application by the RERA

3. On successful registration, the promoter of the project will be provided with a registration
number, a login idand password for the applicant

The promoter shall enclose the following documents along with the application, namely:

1) The sanctioned plan, layout plan and specifications of the proposed project or
the phase thereof, and the whole project as sanctioned by the competent
authority;

2) The plan of development a brief details of his enterprise including its name, registered
address, type of enterprise (proprietorship, societies, partnership, companies, competent
authority), and the particulars of registration, and the names and photographs of the promoter;

3) A brief detail of the projects launched by him, in the past five years, whether
already completed or being developed, as the case may be, including the
current status of the said projects, any delay in its completion, details of cases
pending, details of type of land and payments pending;
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4) The location details of the project, with clear demarcation of land dedicated for
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the project along with its boundaries including the latitude and longitude of
the end points of the project

5) An authenticated copy of the approvals and commencement certificate from

the competent authority obtained in accordance with the laws as may be
applicable for the real estate project mentioned in the application, and where
the project is proposed to be developed in phases, an authenticated copy of
the approvals and commencement certificate from the competent authority
for each of such phases;

 Works to be executed in the proposed project and

 The proposed facilities to be provided thereof including fire fighting facilities,drinking
water facilities, emergency evacuation services, use of renewable energy;

6) Proforma of the allotment letter, agreement for sale, and the conveyance deed proposed to be
signed with the allottees.

7) The number, type and the carpet area of apartments for sale in the project
along with the area of the exclusive balcony or verandah areas and the exclusive
open terrace areas apartment with the apartment, if any;

 The number and areas of garage for sale in the project;

 The names and addresses of his real estate agents, if any, for the proposed project;

8) The names and addresses of the contractors, architect, structural engineer, if

any and other persons concerned with the development of the proposed project;

9) A declaration, supported by an affidavit, which shall be signed by the promoteror any person
authorised by the promoter, stating:—

 that he has a legal title to the land on which the development is proposed along with
legally valid documents with authentication of such title, if such land is owned by
another person;
 that the land is free from all encumbrances, or as the case may be details of the
encumbrances on such land including any rights, title, interest or name of any party in or
over such land along with details;
 the time period within which he undertakes to complete the project or phase thereof, as
the case may be;
 that seventy per cent. of the amounts realised for the real estate project from the allottees,
from time to time, shall be deposited in a separate account to be maintained in a
scheduled bank to cover the cost of construction and the land cost and shall be used only
for that purpose:

The promoter shall withdraw the amounts from the separate account, to cover the cost of the
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project, in proportion to the percentage of completion of the project. The amounts from the
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separate account shall be withdrawn by the promoter after it is certified by an engineer, an

architect and a chartered accountant in practice that the withdrawal is in proportion to the
percentage of completion of the project.

Granting of Registration by the Authority

On receipt of the application, the Authority shall within a period of thirty days-

(a) grant registration subject to the provisions of the Act and the rules and regulations
made there under. A registration number, including a Login Id and password to
the applicant for accessing the website of the Authority and to create his web
page and to fill therein the details of the proposed project;
or
(b) reject the application for reasons to be recorded in writing, if such application
does not conform to the provisions of this Act or the rules or regulations made
thereunder.Application shall not be rejected unless the applicant has been
given an opportunity of being heard in the matter.

Functions and duties of promoter:

The promoter shall, upon receiving his Login Id and password, as the case may be,
create his web page on the website of the Authority and enter all details of the proposed
project for public viewing, including—

(a) details of the registration granted by the Authority;

(b) quarterly up-to-date the list of number and types of apartments or plots, as the
case may be, booked;
(c) quarterly up-to-date the list of number of garages booked;
(d) quarterly up-to-date the list of approvals taken and the approvals which are
pending subsequent to commencement certificate;
(e) quarterly up-to-date status of the project; and
(f) such other information and documents as may be specified by the regulations
made by the Authority.

The advertisement or prospectus issued or published by the promoter shall mention

prominently the website address of the Authority, wherein all details of the registered
project have been entered and include the registration number obtained from the
Authority and such other matters incidental thereto.

The promoter at the time of the booking and issue of allotment letter shall be responsible to
make available to the allottee, the following information, namely:—

(a) sanctioned plans, layout plans, along with specifications, approved by the
competent authority, by display at the site or such other place as may be
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specified by the regulations made by the Authority;

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(b) the stage wise time schedule of completion of the project, including the
provisions for civic infrastructure like water, sanitation and electricity.

Adherence to sanctioned plans and project specifications by the promoter

The proposed project shall be developed and completed by the promoter in accordance
with the sanctioned plans, layout plans and specifications as approved by the competent
authorities.

Notwithstanding anything contained in any law, contract or agreement, after the

sanctioned plans, layout plans and specifications and the nature of the fixtures, fittings,
amenities and common areas, of the apartment, plot or building, as the case may be, as
approved by the competent authority, are disclosed or furnished to the person who
agree to take one or more of the said apartment, plot or building, as the case may be,
the promoter shall not make—

(i) any additions and alterations in the sanctioned plans, layout plans and specifications and the
nature of fixtures, fittings and amenities described therein in respect of the apartment, plot or
building, as the case may be, which are agreed to be taken, without the previous consent of that
person: The promoter may make such minor additions or alterations as may be required by the
allottee, or such minor changes or alterations as may be necessary due to architectural and
structural reasons duly recommended and verified by an authorised Architect or Engineer after
proper declaration and intimation to the allottee." minor additions or alterations" excludes
structural change including an addition to the area or change in height, or the removal of part of a
building, or any change to the structure, such as the construction or removal or cutting into of
any wall or a part of a wall, partition, column, beam, joist, floor including a mezzanine floor or
other support, or a change to or closing of any required means of access ingress or egress or a
change to the fixtures or equipment,etc.

(ii) any other alterations or additions in the sanctioned plans, layout plans and
specifications of the buildings or the common areas within the project without
the previous written consent of at least two-thirds of the allottees, other than the promoter, who
have agreed to take apartments in such building. It may be noted that the allottees, as the case
may be, booked by him or booked in the name of his family, or in the case ofother persons such
as companies or firms or any association of individuals, etc., by whatever name called, booked in
its name or booked in the name of its associatedentities or related enterprises, shall be considered
as one allottee only.

Structural Defect

In case any structural defect or any other defect in workmanship, quality or provision of
services or any other obligations of the promoter as per the agreement for sale relating
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to such development is brought to the notice of the promoter within a period of five
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years by the allottee from the date of handing over possession, it shall be the duty of
the promoter to rectify such defects without further charge, within thirty days, and in
the event of promoter's failure to rectify such defects within such time, the aggrieved
allottees shall be entitled to receive appropriate compensation in the manner as provided under
the Act.

RIGHTS AND DUTIES OF ALLOTTEES

Though the Act is pro-consumer, yet it has striked a balance by specifying the duties of
the Allottees. Allottes who do not pay their installments, maintenance dues in time will
also be subjected to the rigours of this act.

(1) The allottee shall be entitled to obtain the information relating to sanctioned
plans, layout plans along with the specifications, approved by the competent
authority and such other information as provided in the Act or the rules and
regulations made thereunder or the agreement for sale signed with the promoter.

(2) The allottee shall be entitled to know stage-wise time schedule of completion
of the project, including the provisions for water, sanitation, electricity and
other amenities and services as agreed to between the promoter and the allottee
in accordance with the terms and conditions of the agreement for sale.

(3) The allottee shall be entitled to have the necessary documents and plans,
including that of common areas, after handing over the physical possession of
the apartment or plot or building as the case may be, by the promoter.

(4) The allottee shall be entitled to claim the refund of amount paid along with
interest at such rate as may be prescribed and compensation in the manner as
provided under the Act, from the promoter, if the promoter fails to comply or
is unable to give possession of the apartment, plot or building, as the case may
be, in accordance with the terms of agreement for sale or due to discontinuance
of his business as a developer on account of suspension or revocation of his
registration under the provisions of the Act or the rules or regulations made
there under.

(5) The allottee shall be entitled to have the necessary documents and plans,
including that of common areas, after handing over the physical possession of
the apartment or plot or building as the case may be, by the promoter.

(6) Every allottee, who has entered into an agreement for sale to take an apartment,
plot or building as the case may be, shall be responsible to make necessary
payments in the manner and within the time as specified in the said agreement
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for sale and shall pay at the proper time and place, the share of the registration
charges, municipal taxes, water and electricity charges, maintenance charges,
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ground rent, and other charges, if any.

REFERRENCE:
1. Analysis of Dilutions of the Real Estate (Regulations and Development) Act 2016 by
State Governments: A Case study.
2. Dr. Reena Vasishta- additional secretary. To The Govt. Of India (26th March 2016)- The
Gazette Of India Extraordinary PART-II.
3. Detailed Study and Analysis of RERA Act
Aditya V Kadam1, Rushikesh R Jangam2, Rushikesh R Pawar3, Ashwini A Sagavekar4,
Prof. G. D. Parulekar5, Prof. S. S. Patil6.
4. 'REAL ESTATE (Regulation & Development) ACT, 2016 & RULES, 2017 ' is authored
by Adv. Vinod Sampat
5. Seminar on BASICS OF REAL ESTATE & Various Allied Laws.
WIRC OF ICAI.
6. MINISTRY OF HOUSING AND URBAN POVERTY ALLEVIATION
THE REAL ESTATE (REGULATION AND DEVELOPMENT) BILL, 2013.
Presented to Lok Sabha on 17.02.2014, Laid in Rajya Sabha on 13.02.2014

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