RERA stands for Real Estate (Regulation and Development) Act, 2016. It is a comprehensive legislation enacted by the Government of India to regulate the real estate sector and protect the interests of homebuyers. RERA Act aims to bring transparency, accountability, and professionalism in the real estate industry, which was previously unregulated and plagued by various issues such as delay in project delivery, unfair practices, and fraudulent activities.
The main features of RERA are:
Establishment of Real Estate Regulatory Authority (RERA)
RERA has mandated the creation of a regulatory authority in every state and union territory of India to oversee the real estate sector’s functioning. The authority is responsible for ensuring that developers comply with the rules and regulations set by the act.
Mandatory registration of projects:
All real estate projects with a minimum of eight apartments or more than 500 square meters of land area need to be registered with the RERA. The developers must provide all necessary details about the project, such as the timeline for completion, layout plan, land title, and financial statements.
Protection of homebuyers:
RERA provides various protections to homebuyers, such as timely delivery of the project, adherence to the specifications mentioned in the agreement, and the establishment of a grievance redressal mechanism to address disputes between developers and homebuyers.
Escrow account:
RERA mandates that developers must maintain a separate bank account for every project they undertake. This account is known as the “escrow account” and is meant to ensure that the funds collected from homebuyers are only used for that specific project.
Standardized agreements:
RERA has standardized the agreements between developers and homebuyers to prevent unfair practices and ensure transparency in transactions.
Transparency and accountability:
RERA has introduced several provisions to promote transparency and accountability in the real estate sector. Developers must provide regular updates on the progress of the project, and they must also disclose any changes made to the original plan.
Overall, RERA has had a significant impact on the Indian real estate sector, bringing much-needed transparency and accountability. It has also boosted the confidence of homebuyers, who can now invest in the sector with greater confidence.
Here are some of the key rights of homebuyers under RERA:
Right to timely possession:
Homebuyers have the right to timely possession of their property. Developers are required to complete the project within the timeframe mentioned in the agreement, failing which they may have to pay compensation to the homebuyers.
Right to information:
Homebuyers have the right to access all information related to the project, including project details, land status, layout plan, approvals, and completion timelines.
Right to refund:
If a developer fails to deliver the project on time or if the project does not meet the specifications mentioned in the agreement, homebuyers have the right to claim a refund of the amount paid by them along with interest and compensation.
Right to participate in the decision-making process:
Homebuyers have the right to participate in the decision-making process related to the project. They can form an association of homebuyers to represent their collective interests and participate in meetings with the developer.
Right to transparent dealings:
Homebuyers have the right to transparent dealings. Developers are required to disclose all details related to the project, including the price, construction progress, and other charges, in a clear and transparent manner.
Right to file complaints:
Homebuyers have the right to file complaints with the RERA authority if they face any issues related to the project. The RERA authority is required to resolve the complaints within a stipulated time frame.
Right to seek compensation: If a developer fails to comply with any of the provisions of RERA, homebuyers have the right to seek compensation from the developer.
Here are some important RERA case laws:
M/s Imperia Structures Ltd. v. Anil Patni (2019):
In this case, the Uttar Pradesh RERA directed the developer to refund the amount paid by the complainant with interest and compensation for delay in possession of the flat.
Pioneer Urban Land and Infrastructure Ltd. v. Govindan Raghavan (2019):
In this case, the National Consumer Disputes Redressal Commission (NCDRC) held that the RERA authority has exclusive jurisdiction to hear complaints related to real estate projects registered under RERA.
Kunal Kohli v. Creative Infrastructures Pvt. Ltd. (2020):
In this case, the Maharashtra RERA directed the developer to refund the entire amount paid by the complainant with interest and compensation for delay in possession of the flat.
Anil Kumar Misra v. M/s Unnati Fortune Holdings Ltd. (2018):
In this case, the Delhi RERA directed the developer to refund the amount paid by the complainant with interest and compensation for delay in possession of the flat.
Jaypee Infratech Ltd. v. Samir Kumar & Ors. (2019):
In this case, the Supreme Court of India upheld the insolvency proceedings against the developer and directed the appointment of an independent resolution professional to manage the affairs of the company.
K. Surendran vs M/s. Adithya Anandh Foundation:
In this case, the RERA authority ordered the developer to refund the entire amount paid by the homebuyer along with interest and compensation for the delay in project completion. The developer had failed to complete the project within the timeline mentioned in the agreement.
Nikhil Mehta vs Umang Realtech Pvt Ltd:
In this case, the RERA authority directed the developer to pay compensation to the homebuyer for the delay in the possession of the flat. The compensation was calculated at the rate of 10.75% per annum on the amount paid by the homebuyer.
Emaar MGF vs Nikhil Jain:
In this case, the RERA authority directed the developer to pay compensation to the homebuyer for the delay in possession and for not providing the amenities as promised. The compensation was calculated at the rate of 8% per annum on the amount paid by the homebuyer.
Avighna India Ltd vs Maharashtra Real Estate Regulatory Authority:
In this case, the developer challenged the RERA authority’s decision to impose a penalty for the delay in the project completion. However, the Bombay High Court upheld the RERA authority’s decision and stated that the penalty was imposed to ensure that the developer complies with the rules and regulations.
NCDRC vs Pioneer Urban Land and Infrastructure Ltd:
In this case, the National Consumer Disputes Redressal Commission (NCDRC) directed the developer to refund the entire amount paid by the homebuyer along with compensation and interest for the delay in project completion. The NCDRC stated that the developer had indulged in unfair practices by not completing the project within the stipulated time.
These are just a few examples of important RERA case laws. It is important for both developers and home buyers to be aware of the provisions of RERA and their rights and responsibilities under the Act.