Answer By law4u team
The Real Estate (Regulation and Development) Act, 2016 (RERA) regulates the sale and marketing of real estate projects in India with the aim of increasing transparency, accountability, and consumer protection in the real estate sector. Here’s how RERA addresses these aspects: 1. Registration of Real Estate Projects Mandatory Registration: Developers must register their real estate projects with the Real Estate Regulatory Authority (RERA) before marketing or selling. This applies to projects where the land area exceeds 500 square meters or includes more than eight apartments. Information Disclosure: During registration, developers must provide detailed information about the project, including: Project plans and approvals. Timeline for completion and possession. Title of land and encumbrances. Details of the financial status and funding of the project. 2. Project Advertisement and Promotion Truthful Representation: RERA mandates that any advertisement or promotional material related to a real estate project must accurately represent the project details. Misleading or false information about the project’s features, amenities, or timelines is prohibited. Approval of Marketing Material: All advertisements and promotional materials must be approved by the RERA authority to ensure they are accurate and comply with the Act’s provisions. 3. Sale of Plots and Apartments Standardized Agreements: Developers must use standardized agreements for sale, which should be transparent and fair. These agreements must include: Detailed specifications of the project. Payment schedules. Penalties for delays or deviations. Terms related to possession and handover. Advance Payments: Developers cannot demand more than 10% of the total project cost as an advance before signing a sale agreement. 4. Escrow Account Separate Escrow Account: Developers are required to deposit 70% of the project funds received from buyers into a separate escrow account. This account can only be used for construction and land-related expenses. Certification for Withdrawals: Funds can be withdrawn from the escrow account only based on certification by an architect, engineer, and chartered accountant that the work has been completed as per the project progress. 5. Completion and Possession Timeline for Completion: Developers must adhere to the timeline for completion and possession as specified during registration. Any delay in completion or possession is subject to penalties, including interest payments to buyers. Completion Certificates: Developers must obtain Completion Certificates (CC) and Occupancy Certificates (OC) before handing over possession to buyers. The possession cannot be legally handed over without these certificates. 6. Transparency and Accountability Project Updates: Developers are required to provide regular updates about the project’s status on the RERA website. This includes information about the progress of construction and any changes in the project. Maintenance of Records: Developers must maintain records of all project-related documents, including agreements, payments, and approvals, and provide them to buyers upon request. 7. Consumer Grievances and Disputes Redressal Mechanism: RERA provides a grievance redressal mechanism through the Real Estate Regulatory Authority and Appellate Tribunal. Buyers can file complaints against developers for non-compliance, delays, or disputes. Resolution of Complaints: The authority is empowered to adjudicate complaints and disputes, including ordering compensation or directing the developer to rectify any deficiencies. 8. Regulation of Agents and Brokers Registration of Agents: Real estate agents and brokers must also be registered with RERA. They are required to follow ethical practices and adhere to RERA’s regulations while marketing and selling properties. Code of Conduct: Registered agents must follow a code of conduct laid down by RERA, ensuring fair practices and transparency in their dealings with buyers and developers. 9. Penalties and Enforcement Penalties for Non-Compliance: Developers who fail to comply with RERA’s provisions, including those related to registration, project completion, or truthful advertising, may face penalties. This can include fines, suspension of registration, or even imprisonment in severe cases. Enforcement of Orders: The RERA authority has the power to enforce its orders and ensure compliance with the Act’s provisions. Conclusion RERA regulates the sale and marketing of real estate projects by enforcing standards for transparency, accountability, and consumer protection. It mandates the registration of projects and agents, requires truthful advertising, ensures proper handling of funds through escrow accounts, and provides mechanisms for addressing grievances and disputes. By implementing these regulations, RERA aims to enhance trust and reliability in the real estate sector.
