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The Real Estate (Regulation and Development) Act, 2016 (“RERA“) which was made effective on May 1, 2016. This Act was introduced in the year 2016 to deal with the problems existing in the real estate sector. RERA registration ensures that these contracts be transparent, which benefits all parties involved. The primary goal of the registration is to safeguard real estate buyers while also increasing investment in the sector.
REGISTRATION-According to SECTION 3, The necessity that the ‘Promoter’ register the real estate project with the Real Estate Regulatory Authority (“Authority”), which falls within the planning areas, is one of the key components of RERA. The Promoter of a real estate project is not entitled to advertise, market, book, sell or offer for sale, or invite anyone to purchase in any way in any real estate project or part of it without first obtaining such registration.
EXEMPTIONS-
Section 3(2) contains certain exemption from registration. It states that notwithstanding anything contained, no registration of the real estate project shall be required-
- Where the area of the land is supposed to be developed does not exceed 500 square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases,
- For the purpose of renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project,
- Where the promoter has received completion certificate for a real estate prior to commencement of this act.
PENALTIES FOR NON REGISTRATION-In case of non-registration of the real estate project, under Section 59 imposes a penalty of up to 10% of the estimated project cost and in case of continued default, an additional fine up to 10% of the estimated project cost or imprisonment up to three years or both.