Know Your RERA - L&T Realty

Real Estate (Regulations and Development) Act, 2016

Prologue

The need for regulations and uniform guidelines was being felt by the industry which perceived negatively by consumers because of unscrupulous activities of few. A long standing demand by the industry and consumers was largely unmet e.g. delays in grant of project approvals and dispute resolution. There was no better time to introduce Real Estate (Regulations and Development) Act as the Indian Government is focusing on – housing for all, smart cities and infrastructure development, fulfilment of these goals will require enablers such as the Act.

The Act paves way for empowering all stakeholders engaged in the business and consumption of real estate, be it – consumers, real estate developers , brokers/ intermediaries amongst others. However all commercial and residential real estate including plots, apartments, shops, offices and other such properties are all covered under the Act.

A few of the overarching themes in the Act are following –

1. Consumer rights and protection
2. Regulatory oversight on real estate developers and brokers/ intermediaries
3. Defining the duties of real estate developers and default scenarios
4. Setting up timelines for registration of projects and dispute resolution
5. Clearly defining penalties and liabilities of real estate developer and brokers/ intermediaries
6. Roles and duties of investors

Definitions of often used terms in this document –

Consumer: A person who has bought/ booked / intends to buy a plot, apartment or building from a real estate developer.

Real estate developer: A person who develops a building or a township of apartments and commercial complexes on an independently or a jointly owned land, which are later partially or completely sold to the consumers. It also includes a person who converts an existing building or apartments thereof and who acts as a builder, contractor or coloniser.

Project: Is a real estate project that is undertaken by real estate developer and a project can be an offering of Units (defined below) of one kind of mixed (i.e. apartments, plots, offices, shop, building)

Intermediary: An intermediary is a person who negotiates the transactions of buying and selling a property between two parties and receives remuneration for the same (It typically includes brokers and property dealers).

Unit: A single apartment, plot, shop or an office which is a part of a building or township being developed

Person: includes i) an individual; ii) a Hindu undivided family; iii) a company; iv) a firm under Indian Partnership Act; 1932 or Limited Liability Partnership Act, 2008, as the case may be; v) the Maharashtra Real State Regulatory Authority; vi) an association of persons or a body of individuals whether incorporated or not; vii) a co-operative society registered under any law relating to co-operative societies; viii) any such other entity as the appropriate Government, may specify in this behalf.

Carpet Area: means the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment.

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