What is RERA? Learn how the Real Estate Act protects homebuyers with project transparency, fraud protection, and timely delivery. Verify RERA registration for a safe investment.

Decoding RERA: What is RERA? Everything You Need to Know about it!

RERA (Real Estate (Regulation and Development) Act, 2016) has transformed the way real estate business is done in the country and has been a major leap towards making the sector organised and transparent. Whether you are buying an apartment for the first time, or are a rookie investor, you should gain a basic understanding of RERA if you are thinking of investing in real estate.


What Does RERA Mean?

RERA is the abbreviation for Real Estate Regulatory Authority, which was formed in accordance with the Real Estate (Regulation and Development) Act, 2016. It was a landmark Bill that took effect on May 1, 2016, aimed at safeguarding buyers of homes and encouraging investment in real estate. The legislation established real estate departments or commissions in individual states to regulate and police real estate transactions, and to encourage state adoption ball of standardized principles.

What Does RERA Approved Mean?

RERA Approved Property: Project which is RERA Approved is registered in the Real Estate Regulatory Authority and the project compliant with all rules and regulations of the Act. However, it is noteworthy to mention that "RERA Approved" is not a valid legal term of art; the correct term is "RERA Registered".

A RERA registered project ensures:
• Government Inspection making it safe for buyer
• Clear land titles and appropriate building permissions
• 70% of project resources are directed towards construction, financial transparency
• Compliance with safety requirements and legal regulations

How Long Does It Take for RERA Approval?
RERA registration generally takes 30 to 60 days from the date of application, that too if all papers are correct and in order. The time line is as follows

   Document Review: 2-4 weeks to verify authority
• Decision: 30 days as per RERA Act
• Certificate Issue: 1-2 weeks post approval

In case the documents submitted by the applicant are found to be not in order/not as per guidelines, the above timelines will apply afresh with the date of submission of such documented information.

Is RERA Good or Bad?
RERA is in fact, a big boon for this sector, though its implementation can come with both pros and cons for the industry.

Advantages:
• More transparency in the details of the projects and its timing
• Protecting homebuyers from fraud and delays
• Standardized practices across the industry
• Escrow restrictions precluding misuse of funds
• Streamlined dispute resolution mechanisms

Disadvantages:
• Increased compliance burden for developers
• More expensive to run, which costs can be passed on to customers
• Not much relief for older, pre-RERA projects

Are Builder Floors RERA Approved?
Regarding Builder floors, It’s kind of Gray are of RERA registration. Projects which fall under (a) of sub­section (2) of section 3, are exempt from registration with RERA which means if the projects are less than 500 square meters or less than 8 apartments, then such projects can be exempted from registration. Several builder floor projects in South Delhi and Gurgaon are managing to bypass registering under RERA using these threshold values to their advantage.

But builder floor projects above this limit have to be RERA registered. These days most buyers ensure that the project they are finalising on is RERA compliant, especially in case of builder floors, where registration with regulatory authority becomes the key to being accountable in delivering the project on time and within the confirmed quality standards.

Can The Builders Commence The Construction Without Approval From RERA?

No, if the project falls under RERA guidelines then builders can’t initiate construction or sales without RERA registration. Registration of Projects The Act required all projects that are larger than 500sqm or more than 8 flats to be registered before starting any activity which will promote or sell the same.

Developers who do not comply with the rule have been given strict punishment, while home buyers purchasing from unregistered projects would be liable to face legal hassles, trouble in availing home loan facilities and other issues at the time of disposing of the property.

Conclusion
RERA: How do you think RERA has changed the real estate scenario or the investment scenario? Although the Act creates a number of headaches for developers, the good that came with it has offset the bad. For buyers, investing in RERA approved projects is of utmost significance as it facilitates the much-needed legal protection, and guarantees quality and timely delivery. Ensure that you double check a project's RERA registration status on your respective state RERA's official website before making any purchase decisions.