RERA & Real Estate Laws in India
Real Estate (Regulation and Development) Act, 2016The Real Estate (Regulatory and Development) Act, 2016 also known as RERA Act, was enacted on March 26, 2016 and was enforced on May 1, 2016. It is known as one of the landmark legislation, as before this there was no dedicated regulation regulating the Indian Real Estate Sector.
Real Estate Laws cover the aspects of buying, selling and registration of land property. Investment by a foreign person in the real estate sector in India is permitted under the Automatic route under FDI policy which means that no approval is required for such investment whether from the Government of India or the Reserve Bank of India however, it is pertinent to note that such investment has to be in compliance with the FDI policy.
Land in India is classified into various categories like Residential lands, industrial lands, commercial lands etc. The person who owns a land in India is required to pay certain taxes in accordance with the State laws whether or not the land is located in a residential area. The land owners however try to shift the burden of their liability on to the person to whom the property is leased by means of contractual terms however, the primary responsibility still rests with the owner of the property.
The laws applicable to a real estate property differed based on the kind/ category of land as well as whether the property is under construction or finished in nature making it ready to move in.
Real Estate (Regulation and Development) Act, 2016
The Real Estate (Regulation and Development) Act, 2016 was enacted with one of its primary objectives to protect the interests of the homebuyers. One of the major benefits under this Act is that value of the property quoted by the builder of the property is based on carpet area not super built-up area and further, the Act also makes it mandatory for the builders to disclose the carpet area.
The Act can be accessed click here to learn more.
Salient Features of the RERA Act, 2016 Broadly speaking, the salient features of the RERA Act are:
- Establishment of Real Estate Regulatory Authority
- Important Definitions such as built up and super built up area. Built up area includes the actual usable area of the plot plus the inner and outer walls. Super Built up area includes the built up area and the additional common area around the plot like lobby, lift space etc.
- Registration of Real Estate Projects and Registration of Real Estate Agents
- Mandatory Public Disclosure of all project details.
- Functions and Duties of Promoter
- Compulsory deposit of 50 percent amount
- Adherence to declared plans
- Functions of Real Estate Agents
- Rights and Duties of Allottees – The allottee is liable to make necessary payments as stipulated under the agreement and shall also pay his share of municipal taxes, electricity charges, rent and other charges.
- Functions of Real Estate Regulatory Authority
- Establishment of Real Estate Appellate Tribunal
- Punitive Provisions
- Bar of Jurisdiction Courts
- Power to make Rules and Regulation
While the Real Estate laws in India can still be said to be in the early years of its implementation, it is expected that the new legal regime will make interaction between the homebuyers and home builders to a level playing field. The Indian Judiciary’s verdict and observations in cases involving real estate developers and homebuyers have also aided in streamlining the law pertaining to real estate law in India.
For more information on RERA Act, complaints under RERA Act and Real Estate Laws in India please write to us at info@ssrana.com or submit a query. Related Posts
What are the salient features of Real Estate (Regulation and Development) Act, 2016? Real Estate Regulation and Development Act: An Overview