Every business needs some discipline and transparency. Real estate being a vast sector also needed some discipline and transparency. RERA brought these two factors in Real Estate.
TABLE OF CONTENT
- What does RERA Mean
- Why was RERA Established
- Purpose of RERA
- Objectives of TSRERA
- Rules of TSRERA
- Services Offered by TSRERA
- OUTCOME OF TSRERA
1. What does RERA Mean
RERA is Real Estate Regulation Act (RERA) which was enacted by the Government of India in 2016. A few sections were enforced from 1st May 2016 and all the sections came into force from 1st May 2017. As per the act, all states must appoint a Real Estate Regulatory Authority to ensure that the purposes of the act are carried out properly.
RERA gives broad guidelines under which Regulatory Authority of each State and Union Territory can frame their own rules and regulations. These rules are published in the respective State Gazettes.
2. Why was RERA Established
Before the formation of RERA the Real Estate Sector was not regulated. The grievances of this sector were addressed in the consumer court. Due to lack of regulation, investments in this sector were reducing in number. Investors were losing interests as there were no hard and fast rules in this sector. This industry needed a regulator who can frame rules and regulations and maintain transparency in the sector. Hence came into existence RERA- an answer to all the needs and regulations.
3. Purpose of RERA
- To maintain regulation and promotion of REAL ESTATE
- To make sure that transparency and efficiency are maintained in selling real estate
- To take care of the interest of consumers
- To form an adjudicating mechanism for quick settlement of disputes in real estate sector
- To create and maintain a website which will have the records of registered real estate projects and these should be available for public viewing.
- To appoint Appellate Tribunal who could hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority.
- To promote hassle free transactions between buyers and sellers.
The government of Telangana notified the Telangana State Real Estate Rules 2017 vide G.O.Ms.No.202, on 31st July 2017for regulation and promotion of real estate sector in the State of Telangana. These rules came into force on 4th August 2017, i.e. from the date of publication in the Telangana Gazette. These rules are called Telangana State Real Estate Regulatory Act.(TSRERA)
5. Objectives of TSRERA
TSRERA is responsible for managing various aspects of the real estate sector. It maintains the sector, standardizes real estate construction, advocates transparency between builders and home buyers and also takes care of speedy settlement of disputes. It protects and functions in the interest of both – buyers and builders.
TSRERA has made it mandatory to register the project and obtain a valid registration number prior to development of the project. As per this act, marketing, advertising or selling of units is not permitted before registration of the project. This will enhance the responsibility and accountability towards consumers.
If a project is not registered, then there could be a penalty of 10% of the project cost and if the mistake is repeated, then the penalty could go up to 3 years of imprisonment. Repair work, renovation – which does not require marketing or promotion need not register. Registration is not mandatory if the construction area is less than 500 sq m or the units to be constructed are less than 8.
7. Rules of TSRERA
- All those projects which have more than 8 units or are constructed on more than 500 sq m have to get registered with TSRERA.
- Advertisement or promotion should not be done before registration.
- Each phase of the project has to be registered separately if the construction is taken up in phases.
- Builders have to sell the property as per the carpet area and not as per the super built up area. Carpet area doesn’t include the lobby and the thickness of the walls.
- The builder is not permitted to change the plans of the project without the consent of the buyer. This will prevent the builder from increasing the price of the house later. If there are many buyers then the builder should be successful in getting the consent of two-thirds of the buyers before bringing any change in the initial plan.
- Builder is also responsible for the quality of the work done. He has to repair any structural damage done within the first 5 years of construction and it has to be completed within 30 days from the date of complaint.
- Deadline for the handover has to be stuck to. In case of delay in the handover, the builder has to pay interest to the buyer till the completion of the project.
- 70 % of the construction amount should be deposited in a neutral account and it has to be used exclusively for construction. This prevents siphoning of funds.
- The buyer should take the possession of the house within 2 months from the date of completion.
- Builders should upload all the details of the project on the website of TSRERA and must update them quarterly.
8. Services Offered by TSRERA
For a Homebuyer
Homebuyers can file a complaint, have access to the records of all RERA registered real estate projects and can also view the details submitted by agents or promoters on the website.
For a Promoter
Promoters or developers will have to register all commercial and residential projects with TSRERA .They will get a registration number from RERA for the same. They have to update all the details of their projects on the RERA website and update them quarterly. They can file a request for the extension of their handover date if required. They can also file a complaint if necessary.
For a Real Estate Agent
They have to register with TSRERA before facilitating any sale of property. The registration which is valid for 5 years can be renewed thereafter. Promoters have to mention the name of their registered real estate agents who will facilitate them in the sale of their apartments. This has to be done at the time of registration of the project. Real Estate Agents can file a complaint if required.
9. OUTCOME OF TSRERA
The State Regulatory Authority helps to maintain transparency and hassle free transactions between the builder and buyer in terms of buying and selling of property. Both parties are answerable to a government authority. Project disputes do not take long to get addressed and solved. Project money gets accountable and traceable. TSRERA is considered to be one of the landmark legislation passed by the Government, the main objective being transparency, accountability and financial discipline in the real estate sector. TSRERA has developed confidence in buyers and boosted the real estate sector. Builders register their projects and get a valid registration number. They are liable to advertise or market their projects only after getting their project registered with TSRERA. They also declare the names of the registered real estate agents who will facilitate them in the sale of their units. The developers share all the details of their project on the official website of TSRERA and update quarterly. Real estate agents also register themselves on TSRERA. Home buyers get the right to information about the property. Carpet area is standardised. Builders are held responsible for any structural damage within 5 years of hand over. In this way TSRERA is regulating and promoting transparency in the real estate sector.
A successful accomplishment requires transparency and accountability and RERA has roped both these in the real estate sector.
– Written By Pallavi Krishna