What is RERA Full Form? Understanding RERA Act 2016

Table of Contents

1. Real Estate Regulation and Development Act, 2016 - An Overview 1.1 Need for Regulatory in the Real Estate Sector 1.2 What is the RERA Act? 1.3 RERA Full Form and its Analysis 1.4 What is RERA Approved? 1.5 Chronology of Events Leading to the RERA Act, 2016
2. Key Points Under the RERA Act, 2016 2.1 Crucial Key Points Under the RERA Act, 2016 2.2 How Do I Make Sure That a Property Is RERA Compliant?
3. How Does the RERA Act Benefit Real Estate Business? 3.1 Key Benefits of the RERA Act 3.2 Changes in the Real Estate Business After RERA Act, 2016
4. Looking for RERA Approved Projects: Check RERA Website!
5. How MoneyTree Realty is Channelising the Real Estate Sector?
6. FAQs

Real Estate Regulation and Development Act, 2016 - An Overview

The Indian Parliament passed the Real Estate (Regulation and Development) Act, 2016 (RERA) to streamline the booming real estate industry and make the property buying and selling process smooth, transparent, and integral. The purpose of the RERA Act is to uphold the rights and liabilities of buyers and builders across all states of the country. The RERA Act is effective from May 1, 2016, and comprises 10 chapters which are further classified into 92 provisions, of which 52 were notified initially, and the rest became effective from May 1, 2017.

Need for Regulatory in the Real Estate Sector

The Real Estate Sector in India is growing at a significant pace and emerging as a prominent source of wealth creation for people looking to invest their money with the goal of a high rate of return. Currently, the real estate industry in India contributes about 8.53% of the total GDP. With a growth rate of about 30%, India’s real estate market has witnessed emerging state-of-the-art commercial and residential properties from the most sought-after builders across the nation like Godrej Properties, L&T Realty, M3M Group, DLF Limited, ACE Group, etc.

RERA Act drafted a proper policy and regulation for this booming real estate sector and enhanced real estate investments, prompting a large group of people to buy property for sale under a regulation policy that protects their rights and interests.

What is the RERA Act?

The real estate sector in India has been a crucial pillar of the economy and a source of wealth creation and earnings for a large population. Although it was widely unregulated, the need for regulation was evident. To regulate the real estate sector and bring professionalism and standardization across the country, the Parliament enacted the RERA Act, effective from May 1, 2016.

The RERA Act is a real estate regulation policy containing 92 provisions aimed at upholding the consumer rights and interests of buyers and bringing uniformity and standardized business practices across every real estate project in the country. It set transparency, integrity, and accountability in the real estate business and enabled a fast-track mechanism for the resolution of disputes.

RERA Full Form and its Analysis

RERA stands for Real Estate Regulatory Authority, a regulatory body that came with the enactment of the RERA Act, 2016, and protects the rights and interests of buyers and builders by bringing uniform and standard practices in the real estate sector across the country. The Real Estate Regulatory Authority regulates both commercial and residential properties in accordance with the laws presented in the Real Estate (Regulation and Development) Act, 2016.

Objectives of the RERA Act, 2016:

• Bringing transparency
• Introducing uniform and standardized real estate practices
• Infusing professionalism in the real estate business across the country
• Ensuring accountability and integrity
• Allowing a symmetrical flow of information between buyers and builders
• Establishing a regulatory body to oversee a seamless mechanism
• Introducing a fast-track mechanism for dispute resolution
• Bringing confidence to the sector and prompting people to buy property for sale

What is RERA Approved?

"RERA approved" is a term used to describe a real estate project that has acquired the mandatory papers and approval from the state real estate regulatory authority to build a property for sale. The term ‘RERA Approved’ is often used by builders and channel partners in their sales and marketing strategies. Officially, the term used is ‘RERA registered’ or ‘RERA certified,’ denoting a property for sale that is registered under the state’s real estate regulatory authority.

After the enactment of the RERA Act, 2016, each builder with a property area of more than 500 sq m needs to register that property under the state's RERA before starting to market the real estate project. ‘RERA approved’ and ‘RERA registered’ are often used interchangeably in day-to-day usage, but they are different terms. Buyers are advised to do due diligence and analyze the project details on the official RERA website before making a real estate investment.

Chronology of Events Leading to the RERA Act, 2016

• May 2008: First Concept Paper on real estate regulations by the Ministry of HUPA
• 2011: A central law suggested by the Ministry of Housing for the real estate sector
• June 2013: Approval of Real Estate Bill, 2013 by the Union Cabinet
• August 2013: Real Estate Bill introduced in the Rajya Sabha
• February 2014: Standing Committee laid for amendments
• April 2015: Approval of amendments by the Union Cabinet
• December 2015: Real Estate Bill, 2015 approved by the Union Cabinet after incorporating amendments and making modifications
• March 10, 2016: Real Estate (Regulation and Development) Act, 2016 passed by Rajya Sabha
• March 15, 2016: RERA Act, 2016 passed by Lok Sabha
• March 25, 2016: President assents to the RERA Act, 2016

Key Points Under the RERA Act 2016

The Real Estate (Regulation and Development) Act, 2016 brings uniformity in real estate practices across the country and assures a transparent and seamless experience for buyers and builders in the process of buying and selling real estate projects.

Crucial Key Points Under the RERA Act, 2016

Enhanced Security: The provisions under the RERA Act instruct keeping 70% of the investors’ and buyers’ money in a separate account, which would then be allotted to the builder for construction and land-related costs. It restricts builders from asking for more than 10% of the property’s cost as an advance payment before signing the sale agreement.

Clear Transparency: While applying for RERA registration, builders are required to submit original documents for their real estate projects and undertakings. The RERA Act restricts builders from making changes to the property plans without the prior consent of the buyers.

Unbiased Fairness: The RERA Act laid out definitions of important terms like ‘Carpet Area’, 'Common Areas’, ‘Apartment’, ‘Building’, etc., and brought in uniformity and fairness in real estate business practices. It instructed builders to sell and promote properties based on the ‘carpet area’ and not the ‘super built-up area’. It entitled investors to get the entire money invested in case a project has been delayed.

Superior Quality: The provisions in the RERA Act mandated builders to rectify and make amends to the issues and challenges faced by the buyer in the first five years of purchase. It instructed builders to rectify the issues raised within 30 days of the complaint.

Reliable Authorization: The provisions in the RERA Act restrict regulators from marketing, selling, building, investing, or booking a plot without registering it with the state’s RERA. It mandates builders and promoters/channel partners to bear the unique project-wise RERA registration number while marketing and selling real estate projects.

How Do I Make Sure That a Property Is RERA Compliant?

To ensure a property is RERA compliant:

• If the area of the property is more than 500 sq meters, the builder must register it under the state real estate regulatory.
• The builder must provide the original documents to get approval from the RERA, containing information regarding the property sanctioned plan and its brief details, enterprises’ brief details, and authenticated certificates.
• The RERA Act instructs builders to provide proof that 70% of investors’ and buyers’ money is deposited in a discreet bank account and could only be used for construction and land-related purposes.
• Builders are mandated to obtain a unique project-wise RERA registration number before marketing and selling their real estate projects.

How Does the RERA Act Benefit Real Estate Business?

According to the IBEF Report, the real estate industry in India, which was around Rs. 12,000 Cr (US$ 1.72 billion) in the financial year 2019, is estimated to grow to Rs. 65,000 Cr. (US$ 9.30 billion). The report further estimated that the real estate market size in India will reach $1 trillion by 2030.

The RERA Act, 2016 brought about revolutionary changes in the real estate industry in India by channelizing it and streamlining the responsibilities and liabilities of buyers and builders, consequently leading to a seamless buying and selling experience in the real estate business.

How MoneyTree Realty is Channelising the Real Estate Sector?

MoneyTree Realty is the Top Channel Partner in Real Estate and features a diverse portfolio of commercial and residential properties across the country from leading real estate developers like DLF Limited, M3M Group, Elan Group, Godrej Properties, Paras Buildtech, etc.

Under the leadership of Mr. Sachin Arora, real estate consultants at MoneyTree Realty continuously strive to provide top-notch consultations and valuable insights into market trends and help you make a strategic and promising real estate investment.

Services Offered by MoneyTree Realty include:

Follows a Client-Centric ApproachBest-in-class Property ConsultationsMaintain Transparency while you buy a Property for SaleProvides Data-backed Analytics on Property/Market TrendsUpholds Integrity and AccountabilityMaintain Ethical Standards and Professionalism

Are you tired of looking at properties for sale?

Real estate consultants at MoneyTree Realty provide a diverse portfolio of commercial and residential properties from leading real estate developers in India.

We provide best-in-class property consultations while maintaining a client-centric approach and helping you buy property for sale at best market prices along with other exciting deals and offers.

To buy the property of your dream and make a strategic investment, reach out to us on +91 973200007 .

Key Benefits of the RERA Act

Consistent Carpet Area: The provisions in the RERA Act set the standard definition of ‘Carpet Area’ across every real estate project. It restricted promoters from asking for increased prices based on inflated carpet areas.

Builder’s Security Against Insolvency: RERA Act