Real Estate Regulatory and Development Act (RERA)

Under the Real Estate Regulatory and Development Act (RERA) which came into effect on May 1, 2017, real estate agents will be required to register to facilitate a transaction. All real estate agents are required to do RERA Registration. They should do so with the appropriate state regulatory authorities. This article focuses on the mandatory renewal of RERA Agent Registration within the Time Limit.  

Short Glimpse

On May 1, 2017, the Real Estate Regulatory and Development Act (RERA) went into effect to govern India’s real estate market. RERA, 2017, has altered the whole control of builders’ operations and has also empowered purchasers about real estate legislation.

Under the Real Estate Regulatory Act, 2016, every builder and promoter is required to register their real estate projects with RERA in order to acquire, sell, advertise, market, or book them.

RERA registration guarantees that the contract between the purchaser and seller of the land, apartment, or building is regulated in an effective and transparent manner. Furthermore, it strives to provide greater accountability to clients while reducing delays, fraudulent activities, and excessive transaction costs.

Salient features of RERA

The following are the key elements of RERA:

• More assurance for first-time house purchasers about their investment

• Improved certainty of possession in a timely manner

• More stringent penalties for any fraud or false promise

• Digitization of all records to reduce data loss

• Any problem may be resolved quickly.

Who is required to register for RERA Registration in India?

RERA registration is required for all Real Estate Agents, Promoters, and Projects who meet the following criteria:

• All commercial and residential properties, including the projected development.

• Every commercial and residential project that exceeds the 500-square-meter limit or has more than 8 units or apartments

• Every local promoter has a tiny project.

• All ongoing initiatives that do not have a Certificate of Completion (must apply within 3 months).

RERA Registration for Real Estate Agent

All RERA agents should be compulsorily registered with the relevant state regulatory authorities. Once registered, agents will be provided with a registration number that is valid for 5 years. The RERA Act has empowered state governments to issue rules and regulations regarding RERA registration for the registration of real estate agents. In any project where the development area is more than 500 square meters or if the number of flats constructed is more than eight, RERA registration will be required for the project, and only RERA registered agents can sell the project. So, only RERA-registered agents are authorized to deal in RERA-registered properties.

Benefits of RERA Registration for Agents

According to the RERA Act, a real estate project that has to be registered under the RERA Act can only be handled by a RERA registered real estate agent. RERA registration is required to advertise, market, reserve, sell, offer for sale or invite people to buy any plot, flat, or building. Only the following types of land and flats are exempted from RERA registration requirements:

• The area of land proposed for development does not exceed 500 square meters. 

• The number of apartments proposed for construction does not exceed eight apartments, including all stages. 

• Renovation, repair, or remodeling that does not involve marketing, advertising, sales, or reassignment of any apartment, lot, or building. 

So, RERA registration is a must for all real estate agencies. RERA registration would further help create credibility among potential buyers and sellers and show professionalism.

Documents needed for RERA Registration of Real Estate Agents

Following are the documents needed for RERA Registration of Real Estate Agents:

• Application form and prescribed fees. 

• Name, address, and type of business are examples of personal information. 

• Income Tax Returns for the last three years preceding the date of filing the application for registration. 

• Details of projects, promoters, and their advertisers with whom the broker has done business in the last five years. 

• Any details of civil and criminal cases pending against the broker or his firm

• Copies of letterhead, stamps, and receipts that the broker intends to use

The procedure of renewal of RERA Agent Registration 

The registration for RERA is valid for 5 years. After the registration number expires, the applicant must apply for renewal of RERA registration on Form ‘J’ at least 3 months before the expiry date of the registration granted. The real estate agent shall pay the registration fee at the time of application for extension of RERA registration through a draught or banker’s check drawn on any scheduled bank or through online payment, as the case may be, amounting to: 

• In the case of individuals, Rs. 5,000 

• In the case of an applicant other than an individual, Rs. 25,000 

• In the case of renewal of the registration number, the officer informs the real estate broker about it on form “K,” and in the case of rejection of the application for renewal of the registration number, the officer informs the real estate broker on form “J.” 

• The renewal granted for the registration of a real estate broker is also valid for a period of 5 years from the date of its renewal. 

• If an estate agent commits any fraud or violates any regulations, the authority may cancel the registration and inform the concerned estate agent on Form ‘I’. 

• A real estate broker shall maintain and preserve accounting books, records, and documents in accordance with the provisions of the law.

Penalties Associated for Agents under the RERA Act

Penalties associated with agents under the RERA Act are as below:

• In case of delay, the agent will be liable for a penalty of Rs 10,000 per day which may extend to 5% of the cost of the land or building.

• In case the agent engages in any unfair business practices, he will be punished with imprisonment for one year.

• Up to 5% of the property price for failure to comply with REM orders.

• Up to 10% costs Imprisonment up to 1 year or both for failure to comply with Appellate Tribunal orders.

Conclusion

The RERA Act, 2016 imposes severe penalties on any real estate brokers who breach the established restrictions. The severity of the penalty is determined by the type of offense committed; we shall learn about them. If an individual or agency is found guilty of ignoring the orders proclaimed by the appellate tribunal, Section 66 of the RERA Act provides for imprisonment for up to a year and a 10% project cot fine.

Section 65 penalizes an entity for failing to follow RERA requirements; the penalty is typically 5% of the project cost price. The same penalty is overturned if an agent fails to take corrective efforts in accordance with the RERA council’s decision. Section 59 specifies the most severe punishment: a 10% penalty of the projected cost of the real estate project. This penalty is imposed on people who fail to legally register a certain project. All of these rules are intended to protect the interests of prospective property purchasers in the nation.