The RERA (Real Estate Regulatory Authority) Act, 2016, was introduced by the Parliament of India and has revamped the way we look at real estate from a compliance point of view. The focus of the act is to establish accountability and bring about transparency to reduce nefarious activities by developers from taking a toll on the real estate landscape. It applies to all apartments in a development with over 8 units and taking up over a 500 square meter area.
Before RERA’s introduction, there was no stringent law to care for developers’ and brokers’ behaviour. Its inculcation has not only helped homebuyers find the right places to buy easily but has also improved the home loan process.
Offence-wise penalties for promoters
Section 59 for non-registration of a project
Section 59 makes it mandatory for a promoter to register any project they plan to initiate with the RERA authority in that state. If they miss out on it, they will be liable to a penalty to the tune of 10% of the estimated project cost. It can also lead to imprisonment of up to 3 years.
Section 61 for default of other provisions of the act
Section 61 of RERA mandates the developer to the liability of up to 5% of the estimated project cost if they default to any other provision of the Act.
Non-compliance of orders of the authority
The developer is liable to pay for every day of default up to 5% of the project’s estimated cost under RERA if they fail to comply with the orders of the Authority.
Section 64 for non-compliance of the orders of the Appellate Tribunal
As per RERA, if the promoter fails to comply with the orders of the Appellate Tribunal, they are liable to pay the penalty for every day such default continues. The maximum limit of such a penalty is 10% of the project’s estimated cost or imprisonment of up to 3 years or both.
If the developer fails to register a project with the requisite authority in Telangana, they are liable to pay up to 10% of the estimated project cost as per RERA.
If any promoter fails to register or contravenes the provisions of the RERA Act, they are liable to pay fines up to INR 10,000 per day of the period of default to a maximum of 5% of the anticipated project cost.
The MahaRERA can slap a penalty of up to 10% of the estimated cost of the real estate project if they find developers advertising a non-registered project within their domestic boundaries.
If a promoter is found to be marketing a non-registered project in Karnataka, the state RERA is liable to levy a penalty of up to 10% of the project’s estimated cost. In addition, if the promoter fails to comply with its orders, they will be charged with up to 3 years of imprisonment. Or they can levy a fine of up to 10% project’s estimated cost, or in some cases, both.
If such inconsistencies are found, the developer will be liable to pay its buyers at the rate of SBI (State Bank of India) plus 2%, or such rates as SBI may fix from time to time for lending to the general public.
While RERA has brought about stability in the real estate space, the space remains as tricky as ever. So, the buyers must stay vigilant and read the contract and other documentation carefully before making a move.