The Five Pivotal Pillars of RERA

The Real Estate (Regulation & Development) Act, 2016 is considered as one of the landmark legislations passed by the Government of India. Its objective is to reform the real estate sector in India, encouraging greater transparency, citizen centricity, accountability, and financial discipline. This is in line with the vast and growing economy of India as in the future many people will be investing in the real estate sector. The five pivotal pillars of RERA are as follows:-

Transparency

1. A separate account for project transaction
2. No advertisement before registration with RERA
3. Consent of 2/3 allottees about any other addition or alteration and for transferring majority rights to 3rd party promoter
4. No false statements or commitment
5. No arbitrary cancellation of units by the promoter
6. Quarterly updating of RERA website with details such as unsold inventory and pending approvals

Accountability

1.  Every director/partner of a company, who was in charge or responsible will be liable for the conduct of the company and deemed to be guilty
2.  Offense by an officer committed with the consent or connivance of any director, manager, secretary or other officer of the company, will also be guilty
3.   Quarterly update of project progress along with pending approvals on RERA website

Financial Discipline

1. 70% of the funds collected from allottees needs to be deposited in the project account
2. Withdrawals to cover construction and land cost
3. Withdrawals, to be in proportion to the % of completion of the project
4. Withdrawals to be certified by Engineer, Architect and CA(third party)
5. Provision for RERA to freeze project bank account upon noncompliance/revocation
6. Project Accounts to be audited annually.
7. Provision for stronger financial penalties for RERA non-compliances
8. Interest on delay will be the same for customer and promoter
9. Promoter to compensate buyer for any false or incorrect statement with a full refund of property cost with interest

Customer-centric

1. An increase in the quality of construction due to a defect liability period of five years.
2. Increased assertion on the timely completion of projects and delivery to the consumer.
3. Sharing information project plan, layout, government approvals, land title status, sub-contractors
4. Formation of allottee association within the specified time or 3 months after the majority of units have been sold.
5. Consent of 2/3rd allottees for any other addition or alteration
6. Unbiased interest on delays
7. Right to approach Authority in case of any grievances
8. No false statements or commitments

Compliances

1. Registration of agents/brokers with RERA
2. Project registration with RERA
3. Maximum 1-year extension in case of delay due to no fault of the developer
4. Dispute resolution within 6 months at RERA and RERA appellate tribunals
5. Developers to share details of projects launched in the last 5 years with status and reason for the delay with RERA
6. Annual audit of project accounts by a CA
7. Conveyance deed for common area in favor of Association of allottees
8. Separate registration of different phases of a single projects
9. Mandatory registration of new and existing projects with RERA before launch
10. Authenticated copy of all approvals, commencement certificate, sanctioned plan, layout plan, specification, plan of development work, proposed facilities, Proforma allotment letter, agreement for sale and conveyance deed to be given when applying for project registration with RERA

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