Real Estate (Regulation and Development) Act, 2016
Parliament of India
  • An Act to establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure sale of plot, apartment of building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating officer and for matters connected therewith or incidental thereto.
CitationNo. 16 of 2016
Passed byLok Sabha
Passed15 March 2016
Enacted25 March 2016
Passed byRajya Sabha
Passed10 March 2016
Assented to25 March 2016
Commenced1 May 2016 - 61 of 92 sections notified
1 May 2017 - Remaining 31 Sections notified
Legislative history
First chamber: Lok Sabha
Bill titleReal Estate (Regulation and Development) Bill, 2016
Bill citationXLVI-C of 2013
Introduced byDr. Girija Vyas, Minister of Housing and Urban Poverty Alleviation
Introduced14 August 2013
Committee reportStanding Committee Report
Select Committee Report
Status: In force

The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The Act establishes a Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute resolution. The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016. The Act came into force on 1 May 2016 with 61 of 92 sections notified.[1] The remaining provisions came into force on 1 May 2017.[2] The Central and state governments are liable to notify the Rules under the Act within a statutory period of six months.[3]

History

The Real Estate Regulatory Authority (RERA) Bill was introduced in 2013.[4] In December 2015, the Union Cabinet of India had approved 20 major amendments to the bill based on the recommendations of a Rajya Sabha committee that examined the bill.[5] The Bill had been referred to a selection committee, which had given its report in July 2015.[6] However, Congress, Left and AIADMK had expressed their reservations on the report through dissent notes.[6] The Rajya Sabha approved the bill on 10th March 2016 and the Lok Sabha approved it on 15th March 2016.[7][8]

Subsequently, by the powers vested by Section 1 of the Rera Act, the Ministry of Housing and Urban Poverty Alleviation vide Notification S.O. 1544(E)[1] dated 26.04.2016 notified 61 Sections out of 92 Sections on 1st May of 2016 and vide Notification S.O. 1216(E)[2] dated 19.04.2017 notified the remaining 31 Sections.

Structure

The Rera Act 2016 has been divided into 10 Chapters, which is further categorised into 92 Sections.[9]

The Act starts with the Preamble, provides title, extent and commencement, registration of real estate projects and real estate agents, functions and duties of promoter, rights and duties of allottees, about Real Estate Regulatory Authority, Central Advisory Council, Real Estate Appellate Tribunal, various offences, penalties, and adjudication, about finances, accounts, audits, and reports and other miscellaneous provisions.[9]

Below is the outline of the Rera Act 2016 in tabular form-

The Real Estate (Regulation and Development) Act, 2016
Chapter No. Title of the Chapter Sections Covered
I Preliminary 1 and 2
II Registration of Real Estate Project and Real Estate Agents 3 to 10
III Function and Duties of Promoter 11 to 18
IV Rights and Duties of Allottees 19
V The Real Estate Regulatory Authority 20 to 40
VI Central Advisory Council 41 and 42
VII The Real Estate Appellate Tribunal 43 to 58
VIII Offences, Penalties and Adjudication 59 to 72
IX Finance, Accounts, Audit and Reports 73 to 78
X Miscellaneous 79 to 92

Principal Provisions

Definition Clause

The definition clause under Section 2 of the Act enlists the meaning of multiple terms used throughout the Act.[10] Below is a table enlisting crucial definitions-

Important Terms under Section 2
Sub-Section Title
(b) Advertisement
(d) Allottee
(e) Apartment
(k) Carpet Area
(n) Common Areas
(za) Interest
(zh) Planning Area
(zk) Promoter
(zl) Prospectus
(zn) Real Estate Project
(zq) Sanctioned Plan
(zr) Saving Clause

Registration of Real Estate Project and Real Estate Agents

The Act enlists the registration policy of a real estate project and real estate agent and related provision under Section 3.[11]

Sub-section (1) of Section 3 of the Act makes it mandatory for all real estate projects to register with RERA[12] for launching a project to provide greater transparency in project marketing and execution.[11] For ongoing projects which have not received a completion certificate on the date of commencement of the Act, will have to seek registrations within 3 months.[11]

Each State RERA must either approve or reject the application for registration within 30 days from the date of application submitted by the promoter. Upon successful registration, the promoter of the real estate project will be provided with a registration number, a login ID, and a password to fill up the essential details on the website of the State RERA.[13]

If the promoter fails to register, he shall be liable to a penalty that may extend up to a penalty of 10% of the estimated project cost. Furthermore, if he does not comply with the orders, directions or decisions issued by the State Rera, he shall be punishable with imprisonment which may extend up to three years or with a fine which may extend up to a further 10% of the estimated cost of the project.[14][15]

Real estate agents who facilitate the selling or purchase of properties must take prior registration. Such agents will be issued a single registration number for each State or Union Territory, which must be quoted by the agent in every sale facilitated by him.[16] If a real estate agent fails to register or contravenes section 9 (registration of real estate agent) and section 10 (Functions and duties of a real estate agent), he shall be liable to a penalty of ₹10,000 payable every day during which such default continues. This penalty may cumulatively extend up to 5% of the cost of the plot, apartment or building, as the case may be, of the real estate project.

Establishment of Real Estate Regulatory Authority and Appellate Tribunal

The establishment under Section 20 and 43 of the Act will help to establish state-level Real Estate Regulatory Authorities to regulate transactions related to both residential and commercial projects and ensure their timely completion and handover.[17] Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities to dispose of complaints in 60 days while no time-frame was indicated in the earlier Bill.[17]

Offences, Penalties and Adjudication

Sections 59 to 72 of Chapter VIII of the Act provides the provisions regarding Offences, Penalties, and Adjudication.

Punishment for Non-Registration

Section 59, 60 and 62 of the Act provides the punishment to the promoters and the real estate agents for non-registration under Rera.

Below is a table describing the penalty and imprisonment-

Section Sub-Section Punishment receiver Conditions for Punishment Penalty Imprisonment Punishment Clubbing
59 (1) Promoter If promoter contravenes Section 3[18] The amount may extend up to 10% of the estimated cost of the real estate project. NIL Only fine
(2) If promoter not follows the order, decisions or directions issued under sub-section (1)[18] Amount as stated under sub-section (1) + amount which may further extend up to 10% of the estimated cost of the real estate project. The term of imprisonment may extend up to 3 years. Either fine or imprisonment or both.
60 NA Promoter If Promoter provides false information under section 4.[19] The amount may extend up to 10% of the estimated cost of the real estate project. NA Only fine
62 NA Real Estate Agent If any real estate agent fails to comply with Section 9 and 10 of the Act. Amount of ₹ 10000 every day during which such default continues. It may extend up to 5% of the estimated cost of the real estate project. NA Only fine

Punishment for non-compliance of orders, decisions or directions

Section Punishment Receiver Non-Compliance of Order given by Penalty Imprisonment Punishment Clubbing
63 Promoter Real Estate Regulatory Authority Penalty for every day during which such default continues and may extend up to 5% of the estimated cost of the real estate project.[20] NA Only fine
64 Promoter Real Estate Appellate Tribunal Penalty for every day during which such default continues and may extend up to 10% of the estimated cost of the real estate project.[20] Term of imprisonment may extend up to 3 years Either fine or imprisonment or both
65 Real Estate Agent Real Estate Regulatory Authority Penalty for every day during which such default continues and may extend up to 5% of the estimated cost of the real estate project. NA Only fine
66 Real Estate Agent Real Estate Appellate Tribunal Penalty for every day during which such default continues and may extend up to 10% of the estimated cost of the real estate project. Term of imprisonment may extend up to 1 year Either fine or imprisonment or both
67 Allottee Real Estate Regulatory Authority Penalty for every day during which such default continues and may extend up to 5% of the estimated cost of the real estate project. NA Only fine
68 Allottee Real Estate Appellate Tribunal Penalty for every day during which such default continues and may extend up to 10% of the estimated cost of the real estate project. Term of imprisonment may extend up to 1 year Either fine or imprisonment or both

Protection of Homebuyers

The Act prohibits unaccounted money from being pumped into the sector, and as of now 70% of the money has to be deposited in bank accounts through cheques compulsorily.[17] A major benefit for consumers included in the Act is that builders will have to quote prices based on carpet area and not on super built-up area. The Act states that the carpet area include usable spaces like kitchen and toilets.[7] Under Rera, its mandatory for the builders to disclose the carpet area.

State Regulations under Rera

Section 84 of the Act[21] provides that within six months of the Act being enforced, each State Government shall make rules for carrying out the provisions of the Act. The said Rules are to be notified by the State Government. As late as 31 October 2016, Central Government, released the Real Estate (Regulation and Development) (General) Rules,[22] 2016, vide Notification by the Ministry of Housing & Urban Poverty Alleviation (HUPA).[23] The Rules so issued by the Central Government are applicable to the five Union Territories without Legislature viz., Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep, and Chandigarh. The Rules have been issued after the prior release of Draft for comments.[24]

As of 13 July 2019, Arunachal Pradesh, Meghalaya, Sikkim and Nagaland have not notified the Rules. In the case of five north-eastern states, the RERA Act is facing certain constitutional challenges as the land in those states are community owned. West Bengal notified a similar law called the West Bengal Housing Industry Regulatory Act, 2017, which came into effect from 1 June 2018.[25] However, as of July 2019, many states have not implemented the law and failed to notify a Permanent Regulator, Appellate Authority or a website. A chart showing the implementation status by different states as of July 2019 can be seen here.

Rera Act 2016 - Implementation Report (As of 13.07.2019)
S.No. State/UT General RulesDate of notificationRulesRera Website Link
1 Andaman and Nicobar Islands Notified31 October 2016http://www.tnrera.in/
2 Andhra Pradesh Notified28 March 2017 Archived 8 October 2018 at the Wayback Machinehttps://www.rera.ap.gov.in
3 Arunachal Pradesh Not Notified NA NA NA
4 Assam Notified6 May 2017
5 Bihar Notified1 May 2017 Archived 15 December 2017 at the Wayback Machinehttps://rera.bihar.gov.in/
6 Chandigarh Notified31 October 2016 http://rera.chbonline.in Archived 15 January 2019 at the Wayback Machine
7 Chhattisgarh Notified26 April 2017 https://rera.cgstate.gov.in/%5B%5D
8 Dadra and Nagar Haveli Notified31 October 2016http://maharera.mahaonline.gov.in/
9 Daman and Diu Notified31 October 2016http://maharera.mahaonline.gov.in/
10 Delhi Notified24 November 2016http://dda.org.in/rera/index.aspx
11 Goa Notified 24 November 2017 https://rera.goa.gov.in/
12 Gujarat Notified29 October 2016 http://gujrera.gujarat.gov.in/
13 Haryana Notified27 July 2017 http://www.haryanarera.gov.in/
14 Himachal Pradesh Notified28 September 2017 Archived 9 October 2017 at the Wayback Machinehttp://www.hprera.in/
15 Jammu and Kashmir Not Applicable NA NA NA
16 Jharkhand Notified18 May 2017 http://rera.jharkhand.gov.in/ Archived 23 April 2019 at the Wayback Machine
17 Karnataka Notified 10 July 2017 https://rera.karnataka.gov.in/
18 Kerala Notified 18 June 2018 https://rera.kerala.gov.in/
19 Lakshadweep Notified31 October 2016
20 Madhya Pradesh Notified22 October 2016Ruleshttp://rera.mp.gov.in/
21 Maharashtra Notified19 April 2017https://maharera.mahaonline.gov.in/
22 Manipur Notified NA NA NA
23 Meghalaya Not Notified NA NA NA
24 Mizoram Notified 15 March 2019 http://udpamizoram.nic.in/RERA.HTML
25 Nagaland Not Notified NA NA NA
26 Odisha Notified25 February 2017https://rera.odisha.gov.in/
27 Puducherry Notified 18 July 2017 Archived 7 November 2017 at the Wayback Machine
28 Punjab Notified8 June 2017 Archived 3 April 2018 at the Wayback Machine https://www.rera.punjab.gov.in/
29 Rajasthan Notified1 May 2017 http://rera.rajasthan.gov.in/
30 Sikkim Not Notified NA NA NA
31 Tamil Nadu Notified22 June 2017 http://www.tnrera.in/index.php
32 Telangana Notified4 August 2017 http://rera.telangana.gov.in/
33 Tripura Notified 27 October 2017 https://udd.tripura.gov.in/acsnrules
34 Uttar Pradesh Notified11 October 2016www.up-rera.in
35 Uttarakhand Notified28 April 2017 http://uhuda.org.in/?page_id=1354
36 West Bengal Not Notified NA NA NA

References

  1. 1 2 "Notification No. S.O.1544(E)" (PDF). Ministry of Housing and Urban Affairs - Govt. of India. Retrieved 3 May 2021.
  2. 1 2 "Notification No. S.O.1216(E)" (PDF). Ministry of Housing and Urban Affairs - Govt. of India. Retrieved 3 May 2021.
  3. ↑ "Real Estate Bill is an act now, may protect home buyers". Economic Times. Retrieved 2 May 2016.
  4. ↑ "Rahul Gandhi assures home buyers of a strong Real Estate bill", The Economic Times, 3 March 2016
  5. ↑ "Will press for Real Estate Bill in Rajya Sabha, says Rahul Gandhi", The Economic Times, 5 March 2016
  6. 1 2 "Modi government puts real estate bill on priority list to pass it in Budget session", The Economic Times, 27 February 2016
  7. 1 2 "Lok Sabha takes up real estate bill, Congress assures support", The Economic Times, 15 March 2016
  8. ↑ Sharma, Ravi Teja (15 March 2016). "Cheer for home buyers! After Rajya Sabha, real estate regulatory bill cleared by Lok Sabha as well". Economic Tilmes. Retrieved 20 March 2016.
  9. 1 2 "Outline of Rera Act 2016". India Code - Digital Repository of Govt. of India. Retrieved 3 May 2021.
  10. ↑ "Section 2 of Rera Act 2016". India Code - Digital Repository of India. Retrieved 4 May 2021.
  11. 1 2 3 "Section 3 - Prior Registration of Real Estate Project with Rera". India Code - Digital Repository of Govt. of India. Retrieved 3 May 2021.
  12. ↑ Real Estate Regulatory Authority - An Authority established under Section 20 of the Rera Act 2016.
  13. ↑ "Section 5 - Grant of Registration". India Code - Digital Repository of Govt. of India. Retrieved 3 May 2021.
  14. ↑ "Section 59 - Punishment for Non-registration under Section 3". India Code - Digital Repository of Govt. of India. Retrieved 3 May 2021.
  15. ↑ "Punishment for not registering with Rera". Rera Questions and Answers. Retrieved 3 May 2021.
  16. ↑ "Section 9 - Registration of Real Estate Agents". India Code - Digital Repository of Govt. of India. Retrieved 3 May 2021.
  17. 1 2 3 "Big cheer for homebuyers! Rajya Sabha passes Real Estate Bill", The Economic Times, 10 March 2016
  18. 1 2 "Section 59 Explanation". Rera Questions and Answers. Retrieved 5 May 2020.
  19. ↑ "Section 60 Explanation". Rera Questions and Answers. Retrieved 5 May 2020.
  20. 1 2 "Section 63 and 64 Explanation". Rera Questions and Answers. Retrieved 5 May 2021.
  21. ↑ "Section 84". India Code - Digital Repository of Govt. of India. Retrieved 4 May 2021.
  22. ↑ "Rera General Rules". Bare Acts Live. Retrieved 5 May 2021.
  23. ↑ "Real Estate Rules notified today". pib.nic.in.
  24. ↑
  25. ↑ "Housing Industry Regulatory Authority". Housing Industry Regulatory Authority. Retrieved 27 September 2018.
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