THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016

FREQUENTLY ASKED QUESTIONS ON
THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016
(Coverage – Sections 1 to 8)

1. What are objects of Real Estate (Regulation and Development) Act, 2016?
 To establish Real Estate Regulatory Authority for regulation and promotion of real estate sector
 To ensure sale of plot, apartment or building, or sale of real estate project, in an efficient and transparent manner
 To protect interest of consumers in real estate sector
 To establish an adjudicating mechanism for speedy dispute redressal
 To establish Appellate Tribunal to hear appeals from decisions, directions or orders of Real Estate Regulatory Authority and adjudicating officer

2. When was the Act notified in e-Gazette?
The Act was notified in e-Gazette on 26th March 2016. The Act is applicable to whole of India except Jammu & Kashmir.

3. List some of the key terms that have been defined in the Act?
Advertisement, Agreement for Sale, Allottee, Apartment, Architect, Building, Carpet Area, Commencement Certificate, Common Areas, Completion Certificate, Development, Development Works, Engineer, Estimated Cost of Real Estate Project, External Development Works, Family, Garage, Immovable Property, Interest, Internal Development Works, Local Authority, Occupancy Certificate, Person, planning area, Project, Promoter, Prospectus, Real Estate Agent, Real Estate Project, Sanctioned Plan

4. Is prior registration of real estate project with Real Estate Regulatory Authority mandatory?
Yes, no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase any plot, apartment or building, in any real estate project or part of it, in any planning area, without registering Real Estate Project (REP) with Real Estate Regulatory Authority (RERA).

5. I am a promoter and I have an existing project on date of commencement of this Act but completion certificate has not been issued. Is registration still mandatory?
Yes, the promoter shall make an application to RERA within 3 months from date of commencement of Act.

6. List the situations in which registration of Real Estate Project is not required?
No registration of real estate project shall be required –
 Where area of land proposed to be developed does not exceed 500 sq m or number of apartments proposed to be developed does not exceed 8 inclusive of all phases
 Where promoter has received completion certificate for Real Estate Project prior to commencement of Act
 For purpose of renovation or repair or re-development which does not involve marketing, advertising, selling or new allotment of any apartment, plot or building, under real estate project

7. I am a promoter and I have a real estate project that will be developed in phases? Should I get a single registration or multiple registrations?
Where real estate project is to be developed in phases, every such phase shall be considered a standalone real estate project, and promoter shall obtain registration under this Act for each phase separately.

8. List some of the information to be enclosed by the promoter while making an application to RERA.
(a) Details of enterprise
(b) Detail of projects launched by him in the past five years whether already completed or being developed, including current status of said projects, any delay in its completion, details of cases pending, details of type of land and payments pending
(c) Authenticated copy of approvals and commencement certificate from competent authority for real estate project mentioned in application
(d) Sanctioned plan, layout plan and specifications of proposed project or phase, and whole project as sanctioned by competent authority
(e) Plan of development works to be executed in proposed project and proposed facilities to be provided including fire fighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy
(f) Location details of project, with clear demarcation of land dedicated for project along with its boundaries including latitude and longitude of end points of project
(g) Proforma of allotment letter, agreement for sale, and conveyance deed proposed to be signed with allottees
(h) Number, type and carpet area of apartments for sale in project along with area of exclusive balcony or verandah areas and exclusive open terrace areas apartment with apartment
(i) Number and areas of garage for sale in project
(j) Names and addresses of his real estate agents for proposed project
(k) Names and addresses of contractors, architect, structural engineer and other persons concerned with development of proposed project
(l) Declaration, supported by an affidavit, which shall be signed by promoter or any person authorised by promoter

9. List the contents of the declaration to be provided by the promoter in his affidavit.
(a) THAT he has a legal title to land on which development is proposed along with legally valid documents with authentication of such title, if such land is owned by another person
(b) THAT land is free from all encumbrances, or details of encumbrances on such land including any rights, title, interest or name of any party in or over such land along with details
(c) Time period within which he undertakes to complete project or phase
(d) THAT 70% of amounts realised for real estate project from allottees, shall be deposited in a separate account to be maintained in a scheduled bank to cover cost of construction and land cost and shall be used only for that purpose
(e) THAT he shall take all pending approvals on time from competent authorities
(f) THAT he has furnished such other documents as may be prescribed

10. What percentage of amounts for real estate project from allottees should be deposited in a separate account?
The promoter shall deposit 70% of amounts realised for real estate project from allottees, in a separate account to be maintained in a scheduled bank to cover cost of construction and land cost and shall be used only for that purpose.

11. What are the rules for withdrawal by promoter from such account?
The promoter shall withdraw amounts from separate account, to cover cost of project, in proportion to percentage of completion of project

12. I am a promoter and I wish to withdraw some amounts from separate account but who decides percentage of completion of project?
The amounts from separate account shall be withdrawn by promoter after it is certified by an engineer, an architect and a chartered accountant in practice that withdrawal is in proportion to percentage of completion of project.

13. Is there a time limit imposed under the Act for getting the accounts of promoter audited?
Yes, the promoter shall get his accounts audited within 6 months after end of every financial year by a chartered accountant in practice, and shall produce a statement of accounts duly certified and signed by such chartered accountant and it shall be verified during audit that amounts collected for a particular project have been utilised for project and withdrawal has been in compliance with proportion to percentage of completion of project.

14. How does a promoter make an application – manual or electronic form?
It is stated that RERA shall operationalize a web based online system for submitting applications for registration of projects within a period of 1 year from date of its establishment. RERA is yet to be established. Until a web based online system is established, all applications shall be made in paper format.

15. What is the time limit for grant of registration by RERA?
Registration by RERA shall be granted within 30 days from date of application. RERA shall also provide registration number, Login ID and password to applicant for accessing website of Authority and to create his web page and to fill details of proposed project.

16. What is the time limit for rejection of application by RERA?
RERA shall communicate in writing the reasons for rejection of application within 30 days from date of application.

17. What if RERA fails to grant registration or reject application?
If RERA fails to grant registration or reject application, project shall be deemed to have been registered. RERA shall also within 7 days (from expiry of 30 days) provide registration number, Login ID and password to applicant for accessing website of Authority and to create his web page and to fill details of proposed project.

18. What is the validity of the registration granted by RERA?
Registration shall be valid for a period declared by promoter for completion of project or phase.

19. What if the promoter is unable to complete the project as stipulated in the affidavit. Does the promoter have to file a fresh application for registration?
Registration granted may be extended by RERA on an application made by promoter due to force majeure. Also, RERA may in reasonable circumstances, without default on part of promoter, based on facts of each case, extend registration granted to a project for such time as it considers necessary, which shall, in aggregate, not exceed a period of 1 year.

20. What is force majeure?
Force majeure means a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project.

21. Does the Act impose restriction on period of extension to be granted by RERA?
Yes, RERA may in reasonable circumstances, without default on part of promoter, based on facts of each case, extend registration granted to a project for such time as it considers necessary, which shall, in aggregate, not exceed a period of 1 year.

22. Can the registration once granted by RERA be revoked?
Yes, RERA can revoke registration on receipt of a complaint or suo motu or on recommendation of competent authority.

23. What acts lead to revocation of registration by RERA?
(a) Promoter makes default in doing anything under Act / Rules / Regulations
(b) Promoter violates any terms or conditions of approval given by competent authority
(c) Promoter is involved in any kind of unfair practice or irregularities
(d) Promoter indulges in any fraudulent practices

24. What do you mean by unfair practice?
“Unfair Practice” means a practice which, for purpose of promoting sale or development of any real estate project adopts any unfair method or unfair or deceptive practice including any of following practices, namely:
(A) practice of making any statement, whether in writing or by visible representation which,
(i) falsely represents that services are of a particular standard or grade;
(ii) represents that promoter has approval or affiliation which such promoter does not have
(iii) makes a false or misleading representation concerning the services
(B) promoter permits publication of any advertisement or prospectus whether in any newspaper or otherwise of services that are not intended to be offered

25. If the registration is revoked, it is the allottees who will suffer? How does RERA tackle such a situation?
RERA may, instead of revoking registration, permit registration to remain in force subject to such further terms and conditions as it thinks fit to impose in interest of allottees and any such terms and conditions so imposed shall be binding upon promoter.

26. What is the role of RERA after revocation of registration?
(a) RERA shall debar promoter from accessing its website in relation to that project and specify his name in list of defaulters and display his photograph on its website and also inform other Real Estate Regulatory Authority in other States and Union territories about such revocation or registration
(b) RERA shall facilitate remaining development works to be carried out in accordance with provisions of section 8
(c) RERA shall direct the bank holding the project back account, to freeze account, and take necessary actions, including consequent de-freezing of said account, towards facilitating remaining development works in accordance with provisions of section 8
(d) RERA may, to protect interest of allottees or in public interest, issue such directions as it may deem necessary

27. What is the obligation of RERA consequent upon lapse of or on revocation of registration?
Upon lapse of or on revocation of registration, RERA may consult Appropriate Government to carry out remaining development works by competent authority or by association of allottees or in any other manner, as may be determined by RERA

28. In case of revocation of registration of a project, who shall have the first right of refusal for carrying out of remaining development works?
In case of revocation of registration of a project, association of allottees shall have first right of refusal for carrying out of remaining development works

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