THE REAL ESTATE (REGULATION AND DEVELOPMENT ACT) 2016

OBJECTIVES
• For regulation and promotion of real estate sector

• Transparency

• Adjudicating Mechanism for speedy redressal

• Protect interest of Consumers

• Financial Discipline
 CERTAIN FUNDAMENTALS
• Anyone sells land without development or does
development without sale, Act is not applicable !

• Apartment: any dwelling unit, flat, office, showroom, shop,

go-down or any unit for any residential or commercial use
or for carrying on any business AND development and sale
of land in to plots

• Allottee: A ‘person’ whom an ‘apartment’ has been allotted,

sold (freehold/leasehold), or otherwise transferred by the
Promoter and includes subsequent buyers but does not
include tenants.
 CERTAIN FUNDAMENTALS
• Garage: is a place within a project having a roof and walls
on three sides for parking of vehicles but does not include
unenclosed or uncovered parking space such as open
parking area.

• Interest: Chargeable from the Allottee shall be equal to

what Promoter is liable to pay, in case of default.

• Real Estate Agent: includes online platforms also.

• Carpet Area: means net usable floor area excluding area

covered by external walls, service shafts, exclusive
balcony or verandah or open terrace area
 CERTAIN FUNDAMENTALS
Promoter means
• a person who constructs a building of apartments or
converts an existing building to apartments for the
purpose of selling all or some

• a person who develops land into a project whether or not

construction is done in the plots for the purpose of selling
to other persons all or some of the plots

• any Government development authority

• State level co-operative housing finance society or a

primary co-operative housing society which constructs
apartments for its members
 CERTAIN FUNDAMENTALS
Promoter means….

• Any other person who acts as a builder, developer,

contractor or known by any name or POA holder from the
land owner

• Any other person who constructs an apartment for sale to

general public.

If the person who constructs is different from the person

who sells then both of them shall be deemed to be
Promoters and shall be jointly liable for functions and
responsibilities.
 FUNCTIONS AND POWERS OF RERA
• To have registered ‘Real Estate Projects’ and ‘Agents’
and to regulate them.

• Website of records for public viewing

• Power to call upon the stakeholders

• Power to issue prohibitive/restrictive orders and directions

• Power to impose penalty and imprisonment

 REGISTRATION
NO PROMOTER shall advertise, market, book, sell, offer or
invite persons to purchase any plot or apartment in a real
estate project, in any planning area, with out registering the
project with RERA.

Ongoing projects (completion certificate not issued) shall be

submitted for registration within 3 months

Each phase of same project needs registration.

 REGISTRATION
Exceptions:

• Area of land proposed to be developed does not exceed

500 sq.m [12.35 cent] OR the no of apartments does not
exceed 8 inclusive of all phases

• Promoter has already received completion certificate prior

to commencement of Act

• Renovation or repair or re development not involving

advertisement, marketing, sale.
 REGISTRATION
Every Promoter shall make an application to RERA
enclosing:
• Company/enterprise details including photographs of
Promoter
• Details of Projects launched in the past five years with
status
• Copy of all approvals
• Sanctioned plan, layout plan and specifications
• Details of facilities such as fire, drinking water etc
• Location details of the project
• Draft allotment letters, agreement for sale etc
• Details of Carpet area and other details such as exclusive
balcony, verandah etc.
 REGISTRATION
Every Promoter shall make an application to RERA enclosing

• Garage area details

• Details of contractors, architect, structural engineer, real

estate agents.

• A declaration supported by an affidavit (a) that he has

legal title over to the land along with “legally valid
documents” with authentication of such title if it is owned
by someone else (b) EC (c) Project completion time line
(d) 70% of amounts received from Allottees shall be
deposited in a separate account with a scheduled bank
which shall be used only to cover cost of construction and
land {method of withdrawal follows}
 REGISTRATION
• Web based system to manage applications

• RERA has 30 days to either grant or reject the application.

Rejection only after being heard. On grant Promoter will
receive registration number and login password.

• Registration is valid only for the completion period

declared by Promoter and can be extended only on
reasonable circumstances, not more than one year.

• Registration can be revoked by the authority on receipt of

a complaint or suo-moto for reasons (1) Breach of Act (2)
Violation of terms and conditions of the competent
authority (3) Unfair practices (False and misleading
representation, fraud etc).
 REGISTRATION

• On revocation RERA shall

(a) debar Promoter from accessing its website and add

his name and photograph as a defaulter and inform
RERA of other states.

(b) Freeze accounts and defreeze for carrying out

remaining work

(c)carry out remaining work by association of

Allottees or through competent authority
 REAL ESTATE AGENT

• No Real Estate Agent shall facilitate any sale or purchase

of any plot or Apartment without obtaining personal
registration before RERA.

• No Real Estate Agent shall facilitate sale or purchase any

plot or Apartments which are not registered with RERA.
 DUTIES OF PROMOTER
• Create a web page for his approved Project in the RERA
website with all details and provide quarterly updates
about the status of the Project including the number
apartments/plots booked, approvals pending etc.

• All advertisements/prospectus shall mention the website

address of RERA and registration number of the project
from RERA.

• At the time of booking inform Allottee reg sanctioned

plans, layout plans, specifications, stage wise time
schedule of completion of the project (including provision
of utilities like water, electricity, sanitation etc.)
 DUTIES OF PROMOTER
• Amounts from the separate bank account can be
withdrawn only in proportion to the percentage of the
completion of project:

• Only after it is certified by an engineer, architect and

CA in practice that the withdrawal is in proportion to
the completion of the Project

• Have the accounts audited within 6 months of end of

Fiscal Year by a CA in practice with statement of accounts
that amounts collected for a Project is utilized for that
Project and the withdrawal is in proportion to the
percentage of completion of the Project.
 DUTIES OF PROMOTER
• 5 year warranty with respect to structural defect or any
other defect in apartment/building. Promoter to rectify
such defects within 30 days.

• Enable formation of association of Alloteess within a

period of three months of the majority of Allottees having
booked their apartment.

• If a person suffers any loss or damage by reason of any

incorrect, false statements in the advertisement or
prospectus or on the basis of any model apartment/plot
he shall be compensated:
• if such Allotee intends to withdraw from the project he
can be returned his entire investment along with
interest and compensation.
 DUTIES OF PROMOTER
• Promoter shall not accept more that 10 % as advance
without registering the agreement for sale. Draft of
agreement for sale will be prescribed.

• Promoter shall not make any alterations to the sanctioned

plan (i) w/o the prior approval of Allottee if the changes
are wrt an apartment/plot (ii) w/o prior written approval of
at least 2/3 of the Allottees (other than the Promoter) wrt
the project as a whole. However minor additional or alterations
are possible which are not structural changes including altering the
area, height, removal of part of building, change in means of ingress
or egress etc.
 DUTIES OF PROMOTER
• Promoter shall not transfer or assign the project to a third
party w/o obtaining prior written consent of 2/3 Allottees
(other than the Promoter) and with the approval of the
Authority.

• Promoter shall obtain all insurances as may be notified

by Govt and such insurances shall be transferred to the
association on its formation.

• Sale deed to Allottees as well as association (for common

area) shall be registered and hand over possession
within 3 months of occupancy certificate.
 DUTIES OF PROMOTER
• If Promoter fails to complete the project or is unable to
give possession then (i) return the money received with
interest to the Allottees if they wish so (ii) if the Allottee
prefers not to withdraw then pay interest for every day of
delay at prescribed rate.

• No limitation in case of a claim of defective title and

Promoter shall compensate Allottees for all losses
caused due to defective title.
 OFFENCES - PROMOTER
• Directors, Partners and Officers are deemed guilty of the
offences of the Promoter.

• Promoter selling w/o due registration (Sec 3) – 10% of

estimated cost of the Project and any continued violation
shall call for imprisonment upto 3 years and/or fine.

• Promoter providing false information while registering

(Sec 4) - 5% of estimated cost of the Project.

• Any other violation of Act or Rules - 5% of estimated cost

of the Project.

• Promoter failing to comply with orders of Appellate

Tribunal – Imprisonment upto 3 years and/or fine capped
at 10% of project cost.
 OFFENCES – REAL ESTATE AGENT

• Real Estate Agent failing to comply with provisions of Act

– INR 10,000/- per day fine capped at 5% of project cost.

• Real Estate Agent failing to comply with orders of

Appellate Tribunal – Imprisonment upto 1 year and/or
fine capped at 10% of project cost.
 OFFENCES – ALLOTTEE

• Allottee failing to comply with orders of Authority –

Penalty capped at 5% of project cost.

• Allottee failing to comply with orders of Appellate

Tribunal – Imprisonment upto 1 year and/or fine capped
at 10% of project cost.

• All offences are compoundable

 STATUTORY BODIES

• Real Estate Regulatory Authority for each State

• Real Estate Appellate Authority for each State

• Central Advisory Council at centre