The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The Act establishes a Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute resolution. The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016. The Act came into force on 1 May 2016 with 61 of 92 sections notified. The remaining provisions came into force on 1 May 2017. The Central and state governments are liable to notify the Rules under the Act within a statutory period of six months.
History
The Real Estate Regulatory Authority (RERA) Bill was introduced in 2013. In December 2015, the Union Cabinet of India had approved 20 major amendments to the bill based on the recommendations of a Rajya Sabha committee that examined the bill. The Bill had been referred to a selection committee, which had given its report in July 2015. However, Congress, Left and AIADMK had expressed their reservations on the report through dissent notes. The Rajya Sabha approved the bill on 10th March 2016 and the Lok Sabha approved it on 15th March 2016.
Subsequently, by the powers vested by Section 1 of the Rera Act, the Ministry of Housing and Urban Poverty Alleviation vide Notification S.O. 1544(E) dated 26.04.2016 notified 61 Sections out of 92 Sections on 1st May of 2016 and vide Notification S.O. 1216(E) dated 19.04.2017 notified the remaining 31 Sections.
Structure
The Rera Act 2016 has been divided into 10 Chapters, which is further categorised into 92 Sections.
The Act starts with the Preamble, provides title, extent and commencement, registration of real estate projects and real estate agents, functions and duties of promoter, rights and duties of allottees, about Real Estate Regulatory Authority, Central Advisory Council, Real Estate Appellate Tribunal, various offences, penalties, and adjudication, about finances, accounts, audits, and reports and other miscellaneous provisions.
Below is the outline of the Rera Act 2016 in tabular form-
Principal Provisions
Definition Clause
The definition clause under Section 2 of the Act enlists the meaning of multiple terms used throughout the Act. Below is a table enlisting crucial definitions-
Registration of Real Estate Project and Real Estate Agents
The Act enlists the registration policy of a real estate project and real estate agent and related provision under Section 3.
Sub-section (1) of Section 3 of the Act makes it mandatory for all real estate projects to register with RERA for launching a project to provide greater transparency in project marketing and execution. For ongoing projects which have not received a completion certificate on the date of commencement of the Act, will have to seek registrations within 3 months.
Each State RERA must either approve or reject the application for registration within 30 days from the date of application submitted by the promoter. Upon successful registration, the promoter of the real estate project will be provided with a registration number, a login ID, and a password to fill up the essential details on the website of the State RERA.
If the promoter fails to register, he shall be liable to a penalty that may extend up to a penalty of 10% of the estimated project cost. Furthermore, if he does not comply with the orders, directions or decisions issued by the State Rera, he shall be punishable with imprisonment which may extend up to three years or with a fine which may extend up to a further 10% of the estimated cost of the project.
Real estate agents who facilitate the selling or purchase of properties must take prior registration. Such agents will be issued a single registration number for each State or Union Territory, which must be quoted by the agent in every sale facilitated by him. If a real estate agent fails to register or contravenes section 9 (registration of real estate agent) and section 10 (Functions and duties of a real estate agent), he shall be liable to a penalty of ₹10,000 payable every day during which such default continues. This penalty may cumulatively extend up to 5% of the cost of the plot, apartment or building, as the case may be, of the real estate project.