RERA for Promoters
- Real Estate Projects Registration:All commercial, residential, and plotting real estate projects will have to register except where:
□ Area of land proposed to be developed does not exceed five hundred square meters.
□ Number of apartments proposed to be developed does not exceed eight, inclusive of all phases.
□ Promoter has received completion certificate for a real estate project prior to commencement of this Act.
□ Renovation or repair or re-development of projects which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project
Promoter of ongoing real estate projects, in which all buildings as per sanctioned plan have not received Completion Certificate, shall also be required to be registered for such phase of the project which consists of buildings not having occupation or completion certificate.
If any promoter fails to register as per Act, he shall be liable to a penalty which may extend up to 10% of the estimated cost of the real estate project. On continued violation, he shall be punished with imprisonment for a term which may extend up to three years or with fine which may extend up to a further ten per cent of the estimated cost of the real estate project, or with both.
No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area of the state, without registering the real estate project with the Real Estate Regulatory Authority (RERA).
A promoter shall not accept more than 10% of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale.
It is mandatory for the promoter to open a separate account in a bank recognized by the government and must deposit 70% of the total payment received from the consumer. He/she can withdraw the money and should solely use it for the development of the said project after getting it approved from an engineer, architect or chartered accountant.
Seventy percent of the amounts realized for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose.
Withdrawal from such accounts shall be in proportion to the percentage of completion of the project, which shall be certified by an engineer, an architect and a chartered accountant in practice.
Project Accounts to be Audited and copy to be submitted within 6 months of FY.
Apart from Registration, the promoters shall be required to provide quarterly updates on the status of the project to the authority.
Promoter to compensate buyer for any false or incorrect statement with full refund of property cost with interest.
Checklist for Promoters:
✓ Before buying the plot, promoter/developer/builder must do the background check of the seller and the land. Verify all the legalities pertaining to the land.
✓ Develop proper floor plans from Registered Architects and Engineers. Share all the required details with buyers.
Note: The building layouts/plans cannot be changed once passed on to the buyers.
✓ Obtain all the necessary approvals, sanctions, NOCs etc. as the project progresses.
✓ Do the market study, cost & profit analysis, risk analysis and engage trustworthy investor or investing company.
✓ Avoid diverting funds received for the said project. It will delay the project and will hamper your reputation.
✓ Appoint good Sales Executives and train them not to make false promises to buyers even in the case of slow sales.
NOTE: Do not postpone/delay/avoid RERA registration. It is Absolutely Mandatory to get registered with RERA and promoters who avoid registration will ultimately stop receiving loans from Banks and will be made outcasts by Customers.