REAL ESTATE REGULATION ACT, 2016

{Summary Compilation of Important Areas}

Parties Involved
1. Promoters
2. Allottees {Buyer of Projects}
3. Real Estate Agents { Negotiators}
Important Features of the Act
i. The Act applies to both residential and commercial properties.
ii. Builders would be liable for any structural defects brought to his notice within 5
years from the date of possession.
iii. 70% of the amount must be kept in a designated account in a scheduled bank
exclusive for the current project.
iv. Exemption from registration:
a. Projects being developed on land less than 500 square metres.
b. Number of units does not exceed 8 (All phases). Phases will be checked in
total, not individually, if the project is being done in multiple phases.
c. Obtained completion certificate for the project before commencement of
the Act.
d. Renovation/ Repair of the project which does not involve marketing,
advertisement and selling or new allotment.
v. Application or booking fee cannot be more than 10% of the cost of the apartment,
plot or building, as the case may be.
vi. Every allottee shall take physical possession within two months of the occupancy
certificate issued for the said apartment.
vii. If there is Alteration in sanctioned plan by promoters, written consent by 2/3rd of
allottees.
viii. In case, a buyer has been deceived into purchase through false representation or
advertisement, he has an option to exit the project. The developer, in such case, will
have to return the money along with interest.
ix. If there is delay in giving possession, allottee shall be entitled to claim refund of
amount paid along with interest and compensation as prescribed.
x. Carpet area has now been defined in the Act. Now the promoter cannot charge the
buyers on the basis of super built up area.

Note : Completion certificate vs Occupancy certificate

 Occupancy certificate relates to permitting the occupation of the

apartment/building , which has provision for civic infrastructure such as water,
sanitation and electricity and is habitable.

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  Completion certificate relates to the completion of the entire project certifying that
the project has been developed according to the sanctioned plan, layout plan and
specifications, as approved by the competent authority.

Registration of a Real Estate Project under RERA

Section 3-Prior Registration of Property under RERA
1. RERA came into force on 1/5/2016. All undergoing projects which have not
obtained completion certificate would have to obtain registration within 3 months.
2. All Real Estate Agents are also required to get registered with authority to
facilitate purchase/sell of project under RERA.
3. If the project is developed in multiple phases , every phase is to be considered as a
separate project and separate registration is to be obtained for every phase.
4. The registration obtained is valid for a period specified by builder in the
application form.
5. Exemption from Registration
 Proposed Area of land does not exceed 500 sq m or
 Proposed no. of apartments/unit does not exceed 8
 Renovation/Repair/Redevelopment of project where no
marketing/advertising/selling/new allotment is involved.
Section 4-Promoter to apply to the Authority for Registration
The Promoter should accompany the following details with the application process
submitted to the Authority for Registration
(a) Details of enterprise
(b) Sanctioned Plan/Layout Plan and specification of proposed project
(c) Details of projects launched in the last 5 years
(d) Names and address of Promoters
(e) Names and address of Real estate agents
(f) Number, type and Carpet Area of Apartments
(g) Declaration verified by affidavit that
➢ he has legal title to the land on which development is proposed
➢ land is free from all incumbrance
➢ time period within which he undertakes to complete the project
➢ 70 % of amount realised would be kept in scheduled bank to cover cost of
construction and land cost & withdrawal of money shall be on completion
basis after certifying it by Engineer, Architect and Chartered Accountant.
The promoter shall withdraw the amounts from the separate account, to
cover the cost of the project, in proportion to the percentage of completion
of the project.
➢ He shall get his accounts audited by a CA in Practice within 6 months after
end of every Financial Year.
Section 5-Authority to Grant Registration
➢ The authority shall grant or reject registration within 30 days.

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 ➢ If no communication is made by the authority within 30 days, it shall be deemed
that Authority has given the registration.
➢ Within 7 days after the expiry of 30 days-Registration No, Login ID and password
shall be given to the promoter.
➢ No Registration shall be cancelled by the Authority before giving opportunity of
being heard to the promoter.
Section 6-Extension of Registration
➢ The Registration granted under Section 5 can be extended by the Authority on an
application made by the promoter due to force majeure{unforeseen circumstances
like fire, flood, earthquake etc} and on payment of prescribed fees.
➢ The registration granted shall be extended for a period not exceeding 1 year.
➢ No application for extension of registration shall be cancelled by the Authority
before giving opportunity of being heard to the promoter.
Section 7-Revocation of Registration
Registration granted shall be revoked on the following 3 grounds after giving opportunity
of being heard
➢ Promoter makes a default in complying with requirement of Act, Rules or
Regulations.
➢ Promoter violates any of the terms of conditions of the approval given by the
competent authority.
➢ Promoter is involved in any kind of unfair practice or irregularities.
Section 19 Rights and Duties of Allottees
1. To make timely payments. He is liable to pay interest to the promoter for delay in
payment. However, the rate of interest cannot be more than what the allottee is
entitled from the promoter for delay in possession.
2. Every allottee shall take physical possession of the apartment, plot or building etc
within a period of 2 months of the occupancy certificate issued for the said
apartment, plot or building.

Provisions relating to Real Estate Agents{Section 9 and 10}

Section 9 -Registration of Real Estate Agents
1. No real estate agent shall facilitate the sale or purchase of any real estate project
registered under RERA without obtaining registration under this Section.
2. The Real Estate Agent shall make an application in writing for registration to the
Authority.
3. The Authority shall be within the prescribed time period accept or reject the
application.
4. No application shall be rejected by the Authority without giving opportunity of
being heard.

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Section 10 -Functions of Real Estate Agents
1. No real estate agent registered under section 9, shall facilitate the sale or purchase
of any real estate project which is not registered under RERA.
2. Every real estate agent shall maintain and preserve such books of accounts,
records and documents as may be prescribed.
3. No real estate agent shall engage himself in any kind of unfair trade practices
{Example, giving false and misleading information}.

Disputes and Appeals under RERA

1. Any dispute between the allottee and promoter shall be referred to the Real Estate
Regulatory Authority.
2. Authority also has the power to levy penalties on promoters, real estate agents
and allottees for contravention of the Act.
3. If any person is aggrieved by the order of Authority, appeal may be made to
Appellate Tribunal within 60 days { 60 days extension is possible on genuine
grounds}.
4. AT shall make endeavour to dispose off the matter in 60 days.
5. If any person is aggrieved by the order of Appellate Tribunal , appeal may be
made to High Court within 60 days { 60 days extension is possible on genuine
grounds}.

Important Penalties under RERA

1. On Promoters
 Section 59 - If promoter fails to obtain registration under section 3 , penalty
up to 10 % of project cost shall be levied.

If any promoter does not comply with the orders, decisions or directions issued
under sub- section (1) or continues to violate the provisions of section 3, he shall be
punishable with imprisonment for a term which may extend up to three years
or with fine which may extend up to a further ten per cent. of the estimated
cost of the real estate project, or with both.

 Section 60 - If promoter contravenes Section 4 or provides false information

made thereunder, he shall be liable to a penalty which may extend up to 5
% of project cost.

 Section 61 -If promoter contravenes any other provisions of this Act or rules
or regulations made thereunder other than Section 3 and 4 , he shall be
liable to a penalty which may extend up to 5 % of project cost
 Section 63-If promoter fails to comply with, or contravenes any of the orders
or directions of the Authority, he shall be liable to a penalty for every day
during which such default continues , which may cumulatively extend up to
5 % of cost of the project.
 Section 64-If promoter fails to comply with, or contravenes any of the orders
or directions of the Appellate Tribunal, he shall be punishable with

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 imprisonment which may extend up to 3 years or with fine for every day
during which such default continues, which may cumulatively extend up to
10 % of estimated cost of the project, or both.

2. On Real Estate Agents

 Section 62- If any real estate agents fails to comply with provisions of Section
9 and 10, he shall be liable to pay a penalty of Rs. 10,000 for every day during
which such default continues , which may cumulatively extend up to 5 % of
cost of the project.

 Section 65 -If any real estate agent fails to comply with, or contravenes any
of the orders or directions of the Authority, he shall be liable to a penalty
for every day during which such default continues , which may
cumulatively extend up to 5 % of cost of the project.

 Section 66- If any real estate agent fails to comply with, or contravenes any
of the orders or directions of the Appellate Tribunal, he shall be punishable
with imprisonment which may extend up to 1 year or with fine for every
day during which such default continues, which may cumulatively extend
up to 10 % of estimated cost of the project, or both.

3. On Allottees
 Section 67- If any allottee fails to comply with, or contravenes any of the orders
or directions of the Authority, he shall be liable to a penalty for every day
during which such default continues , which may cumulatively extend up to 5
% of cost of the project.
 Section 68-If any allottee fails to comply with, or contravenes any of the orders
or directions of the Appellate Tribunal, he shall be punishable with
imprisonment which may extend up to 1 year or with fine for every day during
which such default continues, which may cumulatively extend up to 10 % of
estimated cost of the project, or both.

Note : For easy learning of penalties

If Promoters, Real estate agents and Allottees-If anyone fails to comply with decision
of RERA (Authority) -Penalty for every day subject to maximum of 5 % of the cost of
the project. (NO IMPRISIONMENT)

If Promoters, Real estate agents and Allottees-If anyone fails to comply with decision
of Appellate Tribunal -Penalty for every day subject to maximum of 10 % of the cost
of the project. IMPRISIONMENT can be extended up to 3 years for Promoters and
up to 1 year for Real estate agents and allottees respectively or with both penalty and
imprisonment.

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