How to Start a RERA REGISTRATION

service package

Overview of RERA Registration

The real estate sector in India plays a vital role in meeting the growing demand for affordable housing and infrastructure. As one of the key pillars of the Indian economy, it has seen significant growth in recent years. However, before the introduction of the Real Estate (Regulation and Development) Act, 2016 (RERA), the industry lacked regulation, transparency, and consumer protection, making it prone to fraud, delays, and a lack of professionalism. Unlike other sectors such as SEBI, TRAI, and IRDAI, there was no dedicated regulatory body overseeing the real estate market.

To address these concerns, the RERA Act was enacted on May 1, 2016, to bring accountability, transparency, and standardization to the real estate sector. Under this act, it became mandatory for both real estate developers and intermediaries (such as agents) to obtain RERA registration to ensure fair practices and safeguard consumer interests.

Indian Real Estate Industry Growth

As per a report by the Indian Brand Equity Foundation (IBEF), the Indian real estate industry is projected to grow from US$ 1.72 billion (Rs 12,000 crores) in 2019 to US$ 9.30 billion (Rs 65,000 crores) by 2040. The market size is expected to reach US$ 1 trillion by 2030, growing from US$ 120 billion in 2017. By 2025, the real estate sector is forecast to contribute about 13% to India's GDP, with key sub-sectors such as retail, commercial, and hospitality contributing significantly to this growth. The sector is also expected to witness a 19.5% CAGR (Compound Annual Growth Rate) from 2017 to 2028.

According to the Department for Promotion of Industry and Internal Trade (DPIIT), the construction sector ranks as the fourth largest industry in India in terms of Foreign Direct Investment (FDI), with an inflow of US$ 41.53 billion between April 2000 and December 2019.

Why RERA Was Necessary in India

Despite the importance of the real estate sector in driving the economy, there were several issues that highlighted the need for dedicated legislation:

  1. Delays in Project Completion: Real estate projects often faced significant delays, affecting buyers and investors.
  2. Lack of Regulation: Unlike other industries with regulatory bodies (e.g., SEBI for financial markets, TRAI for telecom), the real estate sector lacked a structured governance system.
  3. Consumer Grievances: Prior to RERA, consumers had to approach consumer courts under the Consumer Protection Act, 1986 for redressal. However, this system was not effective in resolving real estate-specific issues in a timely and structured manner.

To address these concerns and create a transparent, professional environment, the RERA Act, 2016 was introduced. It was designed to protect the interests of consumers, promote transparency, and ensure that real estate developers and agents adhere to ethical business practices.

Objectives of the RERA Act

The key objectives of the RERA Act, 2016, include:

  • Building Trust: To foster confidence among stakeholders such as developers, promoters, and buyers.
  • Transparency and Accountability: To ensure clarity in transactions, making real estate dealings more transparent and reliable.
  • Dispute Resolution: To set up a mechanism for addressing consumer grievances efficiently.
  • Preventing Fraud: To combat fraud and unethical practices by imposing stricter compliance and regulations.
  • Reducing Delays: To streamline the development process and reduce project delays, ensuring timely delivery of properties.
  • Professionalism and Standards: To promote professionalism, adherence to industry standards, and better governance in the real estate sector.
  • Regulation of Transactions: To define and impose responsibilities on both promoters and buyers for smoother, legally compliant transactions.
  • Promoting Good Governance: To raise awareness about the importance of good governance and ethical practices in the sector.

Through these measures, the RERA Act aims to create a more efficient, transparent, and consumer-friendly real estate market in India.

 
 
 

Benefits of RERA Registration

The RERA Registration provides several advantages to both buyers and developers in the real estate sector. Below are the key benefits:

1. Timely Project Completion

Developers and builders are often known for making false promises regarding the completion dates of projects. However, under the RERA 2016 regulations, developers are held accountable for timely delivery. If a project is delayed, the developer is required to refund the buyer, along with interest, ensuring greater commitment to deadlines.

2. Accurate Project Details

In the past, builders have misrepresented the features and amenities of their real estate projects. Under RERA, developers are not permitted to alter the plans or features that were originally advertised. Any unauthorized changes can result in a penalty of 10% of the total project cost, and the developer could face imprisonment for up to 3 years.

3. Required Clearances

Developers must ensure they obtain all necessary clearances before beginning sales of the project. Any delay in acquiring clearances leads to corresponding delays in delivering the property to buyers. This rule ensures that all legal requirements are met before a property is marketed or sold.

4. Structural Quality Assurance

Developers are accountable for any structural defects that appear in the building within five years of possession. If any such issues arise, the builder is responsible for repairing them, providing greater assurance of quality construction to buyers.

5. Advertising Only After RERA Registration

Developers are prohibited from promoting or advertising their real estate projects before obtaining RERA Registration. The RERA registration number must be displayed in all marketing and promotional materials, ensuring transparency and accountability from the very start of the project.

6. Reduced Booking Amount

Previously, buyers were required to pay a booking amount of up to 20%. However, with the introduction of RERA, this has been reduced to 10%, which can only be collected after signing the "Agreement for Sale". Buyers are also given a 15-day notice to decide, offering more time to evaluate the agreement before committing financially.

7. Enhanced Professionalism and Standardization

RERA has played a crucial role in improving the professionalism and standardization of the real estate industry. By enforcing legal obligations and ensuring adherence to best practices, it has set a benchmark for the sector, benefiting all parties involved, from developers to buyers.

8. Complaint Mechanism

RERA allows not only buyers but also brokers, promoters, and developers to file complaints about any issues or grievances. This complaint redressal system ensures that all stakeholders have a formal platform to resolve disputes in a fair and timely manner.

In summary, RERA Registration brings greater transparency, accountability, and protection for consumers while enhancing the professionalism and credibility of the real estate industry. It ensures that developers adhere to legal obligations, delivers projects on time, and maintains high standards of construction and customer service.

 
 
 

Impacts of the RERA Act on the Real Estate Industry

The RERA Act has had a significant impact on the real estate sector in India. Here are the key effects:

1. Increased Project Costs

With the implementation of RERA, developers now have to comply with stricter regulations, which can lead to increased project costs. These include costs related to obtaining clearances, ensuring compliance, and adhering to timelines.

2. Improved Cost of Capital

The RERA Act has positively affected the cost of capital for developers. By promoting transparency and accountability, the act has instilled greater confidence among investors and financiers, leading to improved access to capital.

3. Enhanced Liquidity for Developers

The act has improved liquidity in the hands of developers and promoters, as it encourages more trust and reliability from financial institutions, leading to easier access to loans and funding for projects.

4. Establishment of Real Estate Regulatory Authorities

The creation of State Real Estate Regulatory Authorities and the Real Estate Appellate Tribunal has been pivotal in addressing consumer complaints quickly. This initiative not only accelerates the grievance redressal process but also provides a fair and legal framework for resolving disputes. These tribunals have the powers equivalent to that of civil courts, ensuring transparency and fairness.

5. Faster Resolution of Grievances

RERA Registration has established clear standards for handling complaints and disputes, leading to a faster resolution of issues faced by consumers, developers, and agents alike.

Applicability of RERA Registration

The RERA Act applies to a wide range of entities in the real estate sector:

1. Real Estate Projects and Promoters

The act mandates RERA Registration for all real estate projects, both residential and commercial, as well as for planned developments. The registration is compulsory if:

  • The project exceeds 500 sq. meters.
  • The project consists of more than eight apartments.

However, the scope has been extended, meaning even smaller projects now require registration, whether they are under 500 sq. meters or consist of up to eight apartments.

2. Real Estate Agents

Real estate agents involved in buying and selling properties must also obtain RERA Registration. Once registered, their certificate is valid across the entire state, making it easier for clients to verify the authenticity and legality of their dealings.

3. Post-Registration Process

Once a RERA Registration is successfully granted, the developer or promoter is provided with a Unique Identification Number (UIN), User ID, and Password. These credentials allow the developer to log into the system and update the details of their projects regularly.

Documents Required for RERA Registration

For a Promoter Company:

  1. Certificate of Registration
  2. Names and Addresses of the chairman, partners, or directors of the company
  3. Date of Company Incorporation
  4. Passport-sized Photograph
  5. Registered Office Address
  6. PAN Card of the builder
  7. Registered Email ID
  8. Company Identification Number (CIN)
  9. Tax Deduction Account Number (TAN)
  10. Details of Previous Real Estate Project Experience
  11. Audited Balance Sheet from the last financial year
  12. Income Tax Return (ITR) for the past three years
  13. Website of the promoter or builder
  14. Details of Previous Projects (Completed or Ongoing)
  15. Case Details (if any pending legal matters, including case names and numbers)

For an Individual Promoter or Builder:

  1. Applicant’s Name
  2. Father’s Name
  3. Occupation
  4. Passport-sized Photograph
  5. Permanent Address
  6. Aadhar Card Copy
  7. Audited Balance Sheet from the last financial year
  8. ITR (Income Tax Return) for the past three years
  9. PAN Card Copy
  10. Builder’s Email ID
  11. Details of Previous Project Experience

For a Real Estate Agent:

  1. Applicant’s Name
  2. Father’s Name
  3. State, District, and Tehsil of operation
  4. Permanent Address
  5. Passport-sized Photograph
  6. PAN Card Copy
  7. Email ID
  8. Registration Fee details
  9. Bank Account Details
  10. Director Signature Certificate (DSC) for directors

The RERA Registration process requires various documents to ensure transparency and accountability in the real estate sector. By providing detailed information about the promoters, their financial standing, and their project history, the process ensures that only legitimate builders and agents are allowed to operate, fostering a safer environment for property buyers.

Procedure for Obtaining RERA Registration

The process of obtaining RERA Registration is primarily online and can be done through the official RERA portal of each respective state. The steps involved may vary slightly depending on the state in which the registration is sought. For example, the process may differ for the Uttar Pradesh RERA portal compared to other states.

Generally, the process involves the following steps:

  1. Visit the Official RERA Portal:
    The first step is to visit the official RERA portal of the state where you are registering. Each state has its own portal for RERA registration.

  2. Create an Account:
    You need to create an account on the portal by providing basic details about your company or personal information if you are applying as an individual.

  3. Fill Out the Application Form:
    After logging in, you will be required to fill out the registration form. You will need to provide detailed information about the real estate project or your business, including project size, location, details of land ownership, and any previous real estate experience.

  4. Upload Required Documents:
    Along with the application, you will need to upload several documents, including identity proofs, financial statements, project details, and approvals. Each state might have different specific document requirements.

  5. Payment of Fees:
    You will be asked to pay a registration fee, which can vary by state and the type of real estate project. Many states have integrated online payment gateways for this step.

  6. Verification:
    After submission, the application and documents are reviewed by the RERA authority. In some cases, the authority may require additional information or clarifications. If needed, there might be an inspection of the site or additional document submissions.

  7. Issuance of RERA Registration Certificate:
    Once the application is verified and all criteria are met, the RERA registration is granted. The authority will issue a registration number that must be prominently displayed in all project advertisements and related materials.

  8. Updating Project Details:
    After registration, the promoter or developer can log into their account to update project details as the work progresses.

This streamlined online process ensures that developers and real estate agents can easily obtain RERA registration while maintaining transparency and compliance with regulations.

 

Penalties Under the RERA Act

The RERA Act outlines penalties for non-compliance with its provisions, which apply to promoters, buyers, and real estate agents. Below is a detailed overview of the penalties based on the type of offense:

Offense Prescribed Penalty
Promoters  
Non-registration of the project 10% of the total estimated cost of the project
Providing false or misleading information 5% of the total estimated cost of the project
Infringement of prescribed laws Imprisonment up to 3 years, or a fine of 10% of the project’s total estimated cost, or both
Buyers  
Non-compliance with RERA guidelines Daily penalty up to 5% of the total estimated cost of the project
Non-compliance with orders or directions from the Real Estate Appellate Tribunal Imprisonment up to 1 year, or 10% of the estimated cost of the project, or both
Real Estate Agents  
Non-registration of the projects Rs. 10,000 per day up to 5% of the total estimated cost of the project
Non-compliance with RERA guidelines Daily penalty up to 5% of the total estimated cost of the project
Non-compliance with orders or directions of the Real Estate Appellate Tribunal Imprisonment up to 1 year, or 10% of the total estimated cost of the project, or both

These penalties are enforced to ensure that all parties involved in real estate transactions adhere to the standards of transparency, accountability, and professionalism as set forth by the RERA Act.