On May 1, 2017 UPRERA was enforced as law to regulate unorganized real estate sector.
State chapter of RERA is known as UPRERA that caters all parties of real estate i.e; developers, agents and home buyers. The objective of UPRERA is to infuse safe guards for home buyers and bring transparency in the real estate sector.
Home buyers were suffering badly due to mis selling of developers and agents so huge lack of credibility was affecting real estate adversely. With rising complaints and frauds, RERA introduced to regulate the unorganized market.
Before enforcement, real estate experts were forecasting that it is going to be game changer for the sector. Key provisions of RERA pertaining to registration of projects:
- Any project larger than 500 sq mt or 5382 sq ft or eight apartments, has to be registered with their respective state body of RERA.
- The act will be applicable on all ongoing projects. Ongoing projects cater all those projects which are without Completion Certificate (CC) or applied or this.
- All developers have to register within 3 months with complete details of business, projects, bank accounts, local address, area of work, approvals, owners with images, architects, contractors etc. that is related to a project development.
- In case failed to register the project, 10% of total project cost could be penalty or imprisonment of 3 years. After uploading documents, state body, UPRERA verify all documents and they have right to reject the registration.
- Agents need to register for sale and purchase of projects. RERA has authority to direct local administration, authority and municipals in order to ensure registration of all projects within a deadline.
- Transparency– Developers are bound to provide project time line and completion date as well. Also they have to submit project development on regular interval on the website for state body and home buyers. All kinds of approvals, land dues, construction cost, bank details etc. is available on UPRERA website.
- Legal restrictions– Developers can’t advertise, sell or book units without approval from state body. In fact they are advised to mention registration no in booklets, ads and promotions.
- Escrow account– Siphoning of funds were major reason of project delay and stalled projects. Hence RERA mandated to secure 70% of fund in separate bank account. Developers have to open fresh account for all projects and need to deposit 70% of collected funds from home buyers for construction.
- Carpet area– developers have to mention carpet area in booklet or brochure rather than super area. As per RERA, a buyer must know actual area he or she is about to get in an apartment. Carpet area is the actual area what a home buyer gets inside of unit. Rest of the area is part of gallery, stairs, lift and other.
- Changes in layout plan– home buyers regularly accuse developers about change in layout plan in the existing project without any prior intimation. Addressing this issue, as one of the major reason of dispute, RERA has restricted developer to change in layout once uploaded on website. Possibility of changes are only when developer has consent of home buyers.
- Maintenance of project– Apart from delivering in a time bound manner, RERA has included clause of maintenance of project too. Developers will be responsible for any kind of fault and damage in society and will be liable to repair the same.
- Appellate tribunal– Before RERA, home buyers were clueless about their complaints and resolution. But now RERA will mediate between developer and home buyers within a limited time frame. Process of filing a formal complaint is as easy as sipping a cup of tea!
Also read > UPRERA to protect interest of home buyers.
Benefits– Fly by night developers are out of business! Home buyers can now invest in RERA approved project since only serious players are left and RERA has restricted entry of part time builders. Competition is tough enough now than rat race of earlier time.