Question 1

What is the Real Estate (Regulation and Development) Act, 2016 (RERA)?

Accepted Answer

The Real Estate (Regulation and Development) Act, 2016 is a central legislation enacted by the Parliament of India to regulate the real estate sector, protect home-buyers and enhance transparency. It came into force on 1 May 2017 and mandates the establishment of a Real Estate Regulatory Authority in every State and Union Territory to register and regulate real estate projects and agents. (Source: Ministry of Housing and Urban Affairs, Government of India — mohua.gov.in)

Question 2

Which projects are required to be registered under RERA?

Accepted Answer

As per Section 3 of the RERA Act, every commercial or residential real estate project where the land area exceeds 500 square metres or the number of apartments proposed to be developed exceeds eight (inclusive of all phases) must be registered with the Real Estate Regulatory Authority of the State before any advertisement, marketing, booking, sale or invitation to purchase. Renovation, repair or re-development that does not involve marketing or new allotment is exempt. (Source: The Real Estate (Regulation and Development) Act, 2016 — India Code, Ministry of Law and Justice)

Question 3

What is the role of the Gujarat Real Estate Regulatory Authority (GUJRERA)?

Accepted Answer

GUJRERA, constituted under Section 20 of the RERA Act by the Government of Gujarat, regulates and promotes the real estate sector in Gujarat. It registers real estate projects and agents, maintains a public web-based register, adjudicates complaints, ensures quarterly disclosures by promoters and enforces compliance with the 70% designated account requirement and project alteration provisions. (Source: Gujarat Real Estate Regulatory Authority — gujrera.gujarat.gov.in)

Question 4

What documents are required for RERA project registration in Gujarat?

Accepted Answer

Promoters are required to submit the application in Form A along with the prescribed fee, authenticated copies of the PAN card, audited balance sheet of the last financial year, income tax returns of the last three years, sanctioned plans and layout approval, proforma of allotment letter, agreement for sale, conveyance deed, encumbrance certificate, title report from an advocate, project specifications and the declaration in Form B affirming legal title and absence of encumbrances. (Source: Gujarat Real Estate (Regulation and Development) Rules, 2017 — GUJRERA Promoter Registration Help)

Question 5

What is the 70% designated bank account rule under RERA?

Accepted Answer

Section 4(2)(l)(D) of the RERA Act mandates that seventy percent (70%) of the amounts realised from allottees for a real estate project shall be deposited in a separate account in a scheduled bank to cover the cost of construction and the land cost. Withdrawals from this designated account must be in proportion to the percentage of completion of the project and must be certified jointly by an Engineer (Form 1), an Architect (Form 2) and a practising Chartered Accountant (Form 3). The project accounts shall be audited within six months after the end of every financial year by a practising CA. (Source: RERA Act, 2016 — Section 4)

Question 6

What is Form 3 under RERA and who can issue it?

Accepted Answer

Form 3 is the Chartered Accountant's Certificate prescribed under the State RERA Rules, certifying that the amount withdrawn from the designated 70% project account is in proportion to the percentage of completion of the project and that the project cost has been incurred as represented. Form 3 can be issued only by a Chartered Accountant in practice holding a valid Certificate of Practice issued by the Institute of Chartered Accountants of India (ICAI). (Source: ICAI — Guidance Note on Accounting for Real Estate Transactions; State RERA Rules)

Question 7

What are the quarterly compliance obligations of a promoter under RERA?

Accepted Answer

Under Section 11 of the RERA Act, every registered promoter must upload quarterly updates on the Authority's website within fifteen days from the end of every quarter, including the list of approvals received, list of approvals pending, status of the project, status of physical construction, status of bookings, and status of the designated bank account. Failure to update attracts a daily penalty and may lead to suspension of the project registration. (Source: RERA Act, 2016 — Section 11)

Question 8

What are the penalties for non-registration of a real estate project under RERA?

Accepted Answer

As per Section 59 of the RERA Act, if a promoter fails to register a project, the Authority may impose a penalty extending up to ten percent (10%) of the estimated cost of the real estate project. On continued contravention, the promoter shall be punishable with imprisonment for a term which may extend up to three years, or with a further penalty extending up to ten percent of the estimated cost of the project, or with both. (Source: RERA Act, 2016 — Section 59)

Question 9

How can an allottee file a complaint under RERA in Gujarat?

Accepted Answer

An allottee may file a complaint under Section 31 of the RERA Act in Form 'N' before the Gujarat RERA Authority or before the Adjudicating Officer (for compensation claims under Sections 12, 14, 18 and 19) through the online complaints module on the GUJRERA portal upon payment of the prescribed fee of ₹1,000. The Authority endeavours to dispose of complaints within sixty (60) days. (Source: Gujarat RERA Rules, 2017 — gujrera.gujarat.gov.in)

Question 10

What is the Real Estate Appellate Tribunal and what is the limitation period for filing an appeal?

Accepted Answer

The Real Estate Appellate Tribunal is constituted under Section 43 of the RERA Act to hear appeals against the orders or decisions of the Authority or the Adjudicating Officer. Any person aggrieved by such an order may prefer an appeal before the Appellate Tribunal within a period of sixty (60) days from the date on which a copy of the order is received. The Tribunal endeavours to dispose of appeals within sixty (60) days of filing. (Source: RERA Act, 2016 — Sections 43 & 44)

Question 11

What is the procedure for an extension of project registration under RERA?

Accepted Answer

Under Section 6 of the RERA Act, the registration granted to a project may be extended by the Authority on an application made by the promoter due to force majeure or for reasonable cause beyond the promoter's control. The application for extension must be made before the expiry of the existing registration in Form 'E' along with the prescribed fee, supporting documents and an explanation of the reasons. The extension is generally granted for a period not exceeding one year. (Source: RERA Act, 2016 — Section 6; Gujarat RERA Rules, 2017)

Question 12

Can the sanctioned plan, layout or specifications of a registered project be altered under RERA?

Accepted Answer

As per Section 14 of the RERA Act, the promoter shall not make any additions or alterations in the sanctioned plans, layout plans and specifications of the buildings or the common areas without the previous written consent of at least two-thirds of the allottees, other than the promoter, who have agreed to take apartments in such building. Minor additions or alterations necessitated due to architectural and structural reasons, duly certified by the architect, may be permitted with prior intimation. (Source: RERA Act, 2016 — Section 14)

Question 13

Who qualifies as a 'Real Estate Agent' under RERA and what are the registration requirements?

Accepted Answer

Under Section 2(zm) of the RERA Act, a 'Real Estate Agent' is any person, including a property dealer or broker, who negotiates or acts on behalf of one person in a transaction of transfer of his plot, apartment or building in a real estate project and receives remuneration, fees or any other charges for his services. Real estate agents must register with the Authority under Section 9 of the Act and obtain a registration number, which must be quoted in every sale facilitated by them. (Source: RERA Act, 2016 — Sections 2(zm) & 9)

Question 14

What is the validity period of a real estate agent's RERA registration in Gujarat?

Accepted Answer

As per the Gujarat Real Estate (Regulation and Development) Rules, 2017, the registration granted to a real estate agent is valid for a period of five years from the date of registration, unless revoked earlier under Section 10 of the RERA Act. The registration may be renewed on an application made not less than three months prior to the expiry of the registration. (Source: gujrera.gujarat.gov.in)

Question 15

What is the liability of a promoter for structural defects under RERA?

Accepted Answer

Section 14(3) of the RERA Act provides that in case any structural defect or any other defect in workmanship, quality, provision of services or any other obligation of the promoter as per the agreement for sale is brought to the notice of the promoter within a period of five years by the allottee from the date of handing over possession, the promoter shall rectify such defects without further charge within thirty days. Failing this, the allottee is entitled to receive appropriate compensation in the manner as provided under the Act. (Source: RERA Act, 2016)

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