In 2016, the Real Estate Regulation and Development Act was introduced in order to regulate the nitty-gritty of the sector of real estate and also to vehemently protect the interests of homebuyers. The Real Estate Regulatory Authority (RERA) of India is considered to be the regulatory body at the state level, where they are responsible for effectively implementing the RERA provisions, which is in the state of Tamil Nadu. Hence, in this blog, we will go into detail about the important fundamentals of the Real Estate Regulatory Authority, which the homebuyers should essentially know, so that they can make smart decisions and invest strategically.

How is RERA Beneficial for Homebuyers

When you are buying a home, it is considered to be one of the most important investments in an individual’s life. But, over the years, the real estate industry has observed a lot of fraud cases, various issues and delays, which have made the property buyers desolate and distressed. Hence, to fix these problems and also to protect the interests of the purchasers, the Indian government, in 2016, has effectively introduced the Real Estate Regulation and Development Act.

What Role Does RERA Play in Protecting Property Buyers?

There is the introduction of compulsory registration, where, through RERA mandates, all of the current and new real estate projects that have more than a particular number of units should be registered through the corresponding state’s Real Estate Regulatory Authority. Through this registration, all of the developers will be able to adhere to the crucial guidelines and also maintain clarity with respect to their dealings. In addition to this, one of the major concerns for property buyers is the delay in projects. Therefore, the Real Estate Regulatory Authority addresses this situation by making it compulsory for the developers to mention a particular timeline for the completion of the project, and this should be done during registration. Therefore, if the deadline of the project is not met, the developers will be responsible for paying any type of penalties to the property buyers, where this makes sure that the real estate projects are delivered on time.

Apart from the above, RERA also lays emphasis on the transparency towards the carpet area, where this is a usable area, and it is within the real estate. The developers should give precise details of the carpet area, thus authorising the buyers to arrive at a decision which is in their best interest. This also further prevents any inconsistencies, which are between the actual area and the promised area. Also, in order to stop the developers from redirecting funds which are for a particular venture or project, the RERA makes it compulsory that the developers should open an independent escrow account, which is for every project. The property buyer’s funds are said to be deposited in this account, where any kind of withdrawals can only be made on the grounds of the project. This secures the buyer’s financial security. RERA further establishes an authority that is adjudicating and also an appellate tribunal, which is to settle any disputes that arise between developers and home buyers. This process offers an efficient and quick process of solution, thereby helping buyers from any kind of long court proceedings that are time-consuming and tiresome.

Documents Required for Submission to the RERA Authority

In order to gain a RERA registration number, the promoter should apply by submitting the documents and details to the RERA authority. This includes addresses, photographs and names of the promoter, the registration certificate of the company or firm, photographs, addresses and names of the landowners if it is a joint venture, patta, sale deed, and encumberance certificate of the land, a copy of the planning permit, a copy of the building plans which has been certified by the local authority/body, copy of the No Objection Certificate (NOC) which is from the defense and civic establishments, certificate of structrual stability, geo-technical certificate and report, details of the flats, plots or villas that has been signed by the project engineer or architect, details of the various projects launched which is in the last five years, date of the project completion, details of the dedicated bank account which is for the project, copies of the sale deed, allotment letter, and construction agreement, longitude and latitude of the project location, details of the structural engineer, architect, and contractors, details of the facilities, amenities and infrastructure, and the audited balance sheet, which is of the promoter for the previous financial year.

Important Things to Note by the Property Buyers

The homebuyers should ensure that, before they invest in real estate, they should verify if the project has been registered with the Real Estate Regulatory Authority. They should check the website or contact the regulator for the details of the project registration. In addition to this, the project documents should be reviewed, and it is also inclusive of the approved plans, RERA registration certificate, and builder-buyer agreement. The homebuyers should also look for legal advice in order to comprehend the various terms and conditions of the agreement, and also its indication of the non-compliance, which is by the developer.

One can also gain knowledge of the construction milestones, project developments, and also the ownership of timelines. A consistent check should be done at the RERA website of Tamil Nadu for any updates on the compliance and project status.

At What Stage is RERA Applicable for a Project?

If there is an area of land which is aimed to be developed and if it exceeds 500 square meters or if the various number of apartments, which are in all of their phases, are more than 8 units, then a registration of the project should be done by the promoter and it is with the respective state authority, which is for RERA. The Real Estate Regulatory Authority can be applicable for commercial and residential property developments, and also for the layout developments. In addition to this, the developer should also have legal rights to the property or land where the project is said to be built. There should also be submission of important building plans, project approvals, and project details to the RERA of Tamil Nadu. When it comes to the real estate agents, they should have valid proof of address, identity, work experience in various real estate transactions and also professional qualifications.

Detailed Analysis of Why RERA Was Promoted

For a lot of Indians, owning a home is an absolute dream where it involves putting down savings of a lifetime. There are a lot of people who are still in rented homes, and they take up home loans, which is 90% of the property value, in order to purchase a property. Therefore, the property purchasers collect the monthly rent and also the pre-EMI, and this is done until they gain ownership of the property, which has always been their dream. But if the ownership is delayed, this will result in a difficult and increasing financial burden.

In the real estate market, there are a lot of promoters who launch new projects and then they take up money from the property buyers, and then they invest in various other projects. But when these promoters face the issue of cash shortage, they delay the progress of construction, hence, which results in a delay in ownership. There are also some promoters who make changes in the material specifications and the architectural design without taking permission from the property buyers, and they also do not make any changes in the construction agreement. During this fiasco, the property buyers will not have many choices left, where they will either have to pay an additional amount by accepting the alterations, or they will have to forfeit the allotment by paying an additional cancellation fee.

Then there are also some promoters who do not gain NOCs, approvals, and clearances, which are needed for the project. During this, the property buyers will only get to know about it when there is an issue of the show cause notice by the concerned authority, and it is for the deviation or probable violation. During all this, both money and time are lost by the investors. In a hurry to buy real estate, there are a lot of home buyers who do not pay attention to detail or the clauses on late payment penalty expenses, delayed possession, and the cancellation fees that were made in favour of the promoters.

Earlier, there was no particular standard format in the real estate sector for the clauses on cancellations, allotment conditions, execution of the sale deed, penalty charges, and execution of the construction agreement. Therefore, the homebuyers had to involve skilled legal professionals so that there would be proper due diligence. Also, when there is an issue between the property buyers and promoters, the property buyers will be left with long financial and emotional draining and also many legal battles. They will also have no power over whom they can contact regarding redressal for their grievances or concerns. There, because of all of these disturbances, the Government of India created the Real Estate (Regulation and Development) Act in 2016, and this act was passed in the Parliament house in March 10th but was made into affect on May 1st.

There is also the defect liability period, which keeps the home buyers safe from poor construction quality. RERA has made it compulsory for a defect liability period of five years, which is from the date of possession. If there is any quality-related or structural issue, the builder should make the changes accordingly, and it should be free of charge. The rework should be done within 30 days, and if the promoter fails to do so, then there will be penalties, or a legal action will be taken through RERA in Tamil Nadu. Also, they have a grievance redressal system which is efficient for property buyers where of the purchaser has an issue with the builder about the defects, delays or refund or if any kind of violation has been made with the RERA Act, then a complaint can be filed with the RERA of Tamil Nadu which is the regulatory authority and also with the RERA Appellate Tribunal which is for appeals against the decision of the authority. The authority is mandated to solve the complaint within 2 months, which is much more efficient and swift than the traditional legal systems.

For the real estate agents, there are various accountability measures done for middlemen and brokers, where they should also register with RERA. If an agent is unregistered, they will not be allowed to participate in the purchase or sale of projects that are RERA registered. This makes sure that agents who are genuine perform their operations in the market, purchasers can hold the agents responsible for any kind of misrepresentation, and there will be immense transparency in the commission and brokerage charges.

The Real Estate Regulatory Authority has also provided penal provisions in case there is non-compliance, where there is accountability enforced through jail time and fines. If there is a builder in Tamil Nadu that have breached the provisions of RERA, then the authority can put forth stringent penalties like payment of 10% of the project expenses if there is no registration done, a day-to-day penalty if there is a delay in the update of the project status, and also jail time for up to 3 years if there is repitition of various major offenses. These measures have acted as a big deterrent and have also upped the behaviour of the developers immensely.

Areas of Improvement and Limitations

There are a lot of challenges which are still encountered by the purchasers, even though RERA has tried its best to transform the market immensely. Some of the issues include an exemption of smaller projects, i.e., those which have 8 units or are under 500 square meters. Because there are many caseloads, there are delays in the RERA hearings. The rural home purchasers have limited awareness, and there are still some developers who find various loopholes so that they can escape their liability. But, still, there are efforts being laid out to remove the loopholes and also extend the scope of the RERA Act for robust protection and also so that the real estate transactions are done seamlessly without any hassle.

How Can One File a Complaint with RERA?

For buyers, they can file a complaint by visiting the official website and then going to the complaints section. And then, registration should be done, and after that, you can log in with your details. Then, fill out the complaint forms and upload all of the relevant and necessary documents. The next step is to pay the fees, and then you can submit your complaint and further track the case status online efficiently. After this, you will be called up for a hearing where you can diligently present your case. If the judge has ruled the case in your favour, then the developer will be ordered to undertake corrective action, or they should pay appropriate compensation.

Ban on Misleading Promotions and False Advertising

If there are any promotional materials like hoardings, brochures, social media posts and also the WhatsApp messages, they should be in tune with the real layout and features of the project, which is registered with RERA. But if the homebuyer finds out that the promoter has misrepresented various amenities, views or layouts, then it is equitable on their part to gain a full fledged refund including the interest, under Section 12 of the Act, they will be able to file a complaint with the RERA and last but not the least, they will be able to demand compensation or rectification. Because of this provision, it is highly advantageous in different metropolitan areas like Chennai, where it is common to witness a high form of aggressive marketing.

Extensive Support for NRI Property Buyers

RERA has given special relief to the non-resident Indians because they are one of the major investors in the real estate of Tamil Nadu, specifically from Singapore, the Middle East and Malaysia. RERA has been a benefit for a lot of NRIs who are dealing with a communication gap with the various developers, issues in personally inspecting the properties and a delay in updates. Therefore, RERA makes sure that their rights are parallel with the residential buyers and also so that they can seamlessly file complaints through online means from abroad and also so that there is no requirement to come to India and take care of operations physically.

RERA Upscaling Confidence Towards Affordable Ownership of Homes

For middle-income families, the Real Estate Regulatory Authority has made home ownership safe and secure. This has been done through removing developers who are unreliable, making sure that the execution of the projects is done through ethical means and imparting a fair pricing while promoting.

Therefore, RERA is not just considered as a regulatory body in Tamil Nadu, but it is a legal shield which is consumer-centric so that the dream of owning a home is not crushed by negligence or fraud.