RERA REGISTRATION FOR BUILDERS OR PROMOTERS

RERA REGISTRATION FOR BUILDERS OR PROMOTERS

One who develops or builds an apartment, buildings, complex, etc and sell these to the prospective buyers, are known as Promoters.


Overview

The one who develops or builds an apartment, buildings, complex, society etc., and sell these to the prospective buyers, are known as Promoters. It is the promoters who has the ultimate say in any real estate deal. The real estate industry has a significant contribution in the growth of the Country’s economy.

So, in order to have a standard rules and regulations in the real estate industry, Government of India has introduced Real Estate Regulatory Authority (RERA) or Real Estate (Regulation and Development) Act, in the year 2016.
 

This Act has been brought to bring transparency and accountability in the real estate industry. The RERA or Real Estate (Regulation and Development) Act has given the power to all the State Governments to issue rules and regulations related to RERA registration.
 

Every State Government has to set up a Real Estate Regulatory Authority (RERA) in order to govern the real estate sector and to solve any dispute of the same.
 


 

RERA helps to protect the parties involved in the real estate and also help to boost the investment in this sector by bringing more transparency and efficiency while buying and selling any property.

As per the Act, it is compulsory for the promoters to get themselves registered under RERA. The promoters who have the RERA registration enjoys certain privileges such as the trust of the buyers, proper documentation, etc. So, it is mandatory for each and every promoter to have a RERA registration.
 

What is the definition of Promoters?

As per RERA, a person who is responsible to construct a high-rise building or a building comprises of various apartments or to change any part of current building or a section thereof into condos, to offer the entire or a portion of the condos to different people and incorporates his trustees, is known as Promoters.

According to RERA, a promoter has to cover almost every aspect of construction. It also states the Promoters responsibility such as –

  1. new construction, 
  2. conversion of existing buildings, 
  3. commercial construction, 
  4. plotting of land, 
  5. contractor and estate development by any person working as the holder of the attorney from the owner of the land.
     

Functions and Responsibilities of Promoters

Promoters have certain functions and responsibilities to perform and they are as follows:

  • It is the duty of the promoters to get their projects register with RERA.
     
  • After the registration, the promoters are required to create a web page and have to display the real estate project on the website of RERA so that the details of the projects can be accessible for people. 
     
  • They cannot promote/advertise or make a deal to sell the property without registering the project. 
     
  • The promoters have to provide a certain documents at the time of booking and issue of letter of distribution. The documents that will be presented at the time of booking the project are Sanctioned plans, layout plans, alongside particulars, endorsed by the capable position.
     
  • It is duty of the promoters to also mention the stage-wise time plan for completion of the project which includes provision for community framework such as water, sanitation, power etc. 
     
  • They had to obtain the certificate of completion and certificate of occupancy from the respected authority as  per the local law or any other law for the time being in force. The promoters have to make both the certificates available for the individual allottee or for the group of allottees, as the case may be.
     
  • A lease certificate has to be obtained by the promoters, if the project has been developed on the leasehold land. The certificate must mention the lease period. The promoters also has to ensure that all the dues and charges related to leasehold land should be fully cleared. They are required to provide the lease certificate to the association of allottees.
     
  • If the promoters fail to give the possession of property on time, then they have to return the money as received to the buyers.

     

Documents Required

In case the Promoter is Company/LLP/Partnership, then the following documents are required for registration as Promoters with RERA.

  • Certificate of Registration.
  • Full name of all the partners or directors
  • Complete address details of all the partners or directors
  • Incorporation Date
  • Copy of Photograph of every partner or director
  • Registered address of the Company or LLP or Partnership firm
  • Copy of PAN Number of the Company or LLP or Partnership firm
  • Email id
  • Registration/Identification number of Company or LLP or Partnership firm
  • Complete detail of project experience, if any
  • Copy of the audited balance sheet/ Income-Expenditure Statement of the proceeding year
  • Website detail of promoter
  • Copy of Income tax return of the previous three years
  • Any previous project experience-if yes- then details of last 5years needed
  • Project Name
  • Status of the project whether Completed or under progress
  • Details of Pending case, if any, such name and case number
  • Clarification regarding the apartment such as carpet area, number of floors, parking space etc.
  • Full detail of the land for example rights, title, mortgage etc.
  • Detailed Information of everyone involved such as Architects, Engineers and others
  • In case of Promoter Registration as an Individual (Promoter/Builder)
  • Promoter or Builder’s Name
  • Name of the Father
  • Detail of occupation
  • Promoter or Builder’s Photograph
  • Address detail of Promoter or Builder’s
  • Aadhaar card details
  • Promoter or Builder’s website
  • Income tax return of previous three years
  • Promoter or Builder’s Pan number
  • Promoter or Builder’s Email id
  • Details of project experience, if any
  • Promoter or Builder need to clarify about the apartment such as carpet area, number of floors, parking space
  • Full detail of the land for example rights, title, mortgage etc.
  • Detailed Information of everyone involved such as Architects, Engineers and others
     

Note: The documents as required for registration with RERA differ from state to state. So, the above mentioned documents might be different as per the state requirement.
 

Registration Process

Registration under RERA is an online process which can be done by visiting the official website of RERA. Registration varies from state to state.

To get the RERA registration, one has to go through the following steps-

  • Visit the website of RERA as per your state, where you want the registration and where your project will develop.
     
  • The applicant has to fill an application form and has to submit the same with RERA.
     
  • Apart from the application form, the promoters are also required to submit his personal details and the details of the project. He will also have to submit the details of his other projects of last 5 years.  This is because the authority wants to make the profile of the promoter visible to the general public. Later these details will be transferred to the RERA India site along with the Promoter’s photo.
     
  • If the authority finds the application and the requisite documents true and fair, then the RERA registration will be provided to promoters within a month.
     
  • After the registration, the promoter’s details will be made available on the RERA site. Login Id and Password will also provided to the promoters so that they can update their details or their project details on the RERA site as and when needed.
     
  • Registration with RERA will make the promoters more genuine as the proper verification of their documents and identity has been done by the authorities itself. The Buyers can easily distinguish between the Registered Promoters and the unregistered promoters.
     

Benefits of Registration

  • It increases the trust in the eye of prospective buyers.
  • Difference between genuine and non-genuine promoters can be easily identified.
  • No other promoter can copy the design or layout of the real estate project of the registered promoters.
  • If any dispute arises, the promoters can approach the concerned authority and can have the solution for the same.
  • They can advertise and promote their brands in each and every part of the state where the project has been developed.
     

Time Involved

If all the documentation is proper and as per the requirement of State RERA, then the registration will be granted within 30 days.
 

Validity of Registration

The validity of registration will be for a period as declared by the Promoter for completing the project or for any phase as mentioned in the affidavit following the application form.

The Authority can extend the registration after receiving the extension application from the Promoter in the following situations:

a.  In case of occurrence of war, flood, drought, fire, cyclone, earthquake or any such other calamity as caused by nature that has affected the time period of developing the real estate project.

b.  The authority can extend the registration by one year if the find the reason for extension as mentioned by the promoters reasonable.
 Penalty

In case the promoters fail to register with RERA, then they will have to pay a heavy penalty. The amount of penalty is as follows:

a.  In case not registered - 10% of the project’s estimated cost

b.  In case of giving any false information - 5% of the project’s estimated cost

c.  In case of violation of RERA Law - Up to 3 years’ imprisonment or a fine of 10% of the estimated cost of the property, or both
 

Takeaway

It is advisable for the promoters to get themselves registered with RERA, in order to avoid any dispute that can occur in the near future.
 

FREQUENTLY ASKED QUESTIONS (FAQ’s)
 

When is RERA Act introduced?

Government of India has introduced Real Estate Regulatory Authority (RERA) or Real Estate (Regulation and Development) Act, in the year 2016
 

What is the definition of Promoters as per RERA?

As per RERA, a person who is responsible to construct a high-rise building or a building comprises of various apartments or to change any part of current building or a section thereof into condos, to offer the entire or a portion of the condos to different people and incorporates his trustees, is known as Promoters.
 

Is a RERA registration of one state is applicable in another state?

No, a RERA registration of one state is not applicable in another state.
 

Are promoters required to take a separate RERA registration if they want to build a project in another state?

Yes, Promoters have to take a separate RERA registration if they want to build a real estate project in another state.
 

What is the benefit of Registration with RERA?

The benefit of Registration with RERA is as follows:

a.    It increases the trust in the eye of prospective buyers.
b.    Difference between genuine and non-genuine promoters can be easily identified.
c.    No other promoter can copy the design or layout of the real estate project of the registered promoters.
d.    If any dispute arises, the promoters can approach the concerned authority and can have the solution for the same.
e.    They can advertise and promote their brands in each and every part of the state where the project has been developed.
 

Within how many days registration will be obtained?

RERA registration will be obtained within 30 days if all the documents are correct and fair as per the authority.
 

What is the validity period of registration?

The validity of registration will be for a period as declared by the Promoter for completing the project or for any phase as mentioned in the affidavit following the application form.

The Authority can extend the registration after receiving the extension application from the Promoter in the following situations:

a.  In case of occurrence of war, flood, drought, fire, cyclone, earthquake or any such other calamity as caused by nature that has affected the time period of developing the real estate project.

b.  The authority can extend the registration by one year if the find the reason for extension as mentioned by the promoters reasonable.
 

What is the penalty involved?

In case the promoters fail to register with RERA, then they will have to pay a heavy penalty. The amount of penalty is as follows:

a.  In case not registered - 10% of the project’s estimated cost

b.  In case of giving any false information - 5% of the project’s estimated cost

c.  In case of violation of RERA Law - Up to 3 years’ imprisonment or a fine of 10% of the estimated cost of the property, or both
 

What is the total cost involved in RERA registration?

The total RERA registration cost varies from state to state.
 

Is RERA Act applicable on both residential and commercial projects?

Yes, RERA Act is applicable on both residential (fully) and commercial projects (such as shops, offices, and buildings)
 

Edited by Minu Mishra