Ready

Reference Guide
Real Estate (Regula,on & Development) Act 2016

For Private Circula/on to CREDAI Members

RERA Presentation Committee

Name Designa+on Email ID

Shri Shan,lal Kataria President info@adityabuilders.com
katariashan,lal@gmail.com
Shri Suhas Merchant Vice President srmerchant@vsnl.com

Adv I P Inamdar Chairman - Legal CommiNee ipi@ahurabuilders.com

CA Vinit Vyankatesh Deo CMD, Posiview Consul,ng vinit@posiview.in

(Knowledge Partner) (www.posiview.in)

2
Message to Readers
Dear CREDAI Members,

The Real Estate Regula,on Act, 2016 (RERA) is going to transform our community into a new
genera,on of Developers. Real Estate is a vast sector spread across length and breadth of India and
second largest contributor to employment as well as large chunk of GDP. Hence, we appeal to the
Central and State Governments to do a gradual ac,va,on of various provisions of RERA and Rules over
the next few years so that there will be an orderly and planned transforma,on of this cri,cal sector.

We have put together this summary of key provisions of RERA and their impact on business for quick
and easy reading by Developers. This will serve as a ready reference guide to you and your team for
reading and understanding the full Act, whose link for download is also given in the slides.

I take this opportunity to urge all of you to focus on 3Ps of your business to succeed in this new
ERA of RERA:
- Planning
- Presenta,on
- Performance

Wishing you all con4nued success and prosperity in business!

Yours in Service,
President CREDAI - Pune Metro &
Members, RERA Presenta+on Commi;ee
3
Understanding RERA: Quick View for Developers
Nature,
U,lisa,on of Funding & Success
Structure &
Funds Repayment Mantra
Status

Cost of the Cancella,on of Preparing for

Deni,ons
Project Apartment RERA

Construc,on &
Registra,on of Possession & RERA: Impact
Altera,on to
Project Maintenance on Costs
Plans

AlloNee:
Revoca,on of Forma,on of Real Estate
Rights &
Registra,on Society Agents
Du,es

Adver,sement
Booking &
& Model Penal,es Pending Cases
Sales
Apartment

4
What is the Nature of RERA?
RERA is a Central Act with some authority delegated to State Governments
Provision Impact
Basis of RERA Created under Entry 6 and 7 of the Concurrent List in 7th Schedule of
the Cons,tu,on of India
Entry 6 Transfer of property other than agricultural land; registra4on of
deeds and documents.
Entry 7 Contracts, including partnership, agency, contracts of carriage, and
other special forms of contracts, but not including contracts rela4ng
to agricultural land.
Nature of RERA RERA governs:
- rela,onship between Buyer (AlloNee) and Seller (Promoter/Agent)
RERA DOES NOT govern:
- development of land and
- construc,on of buildings
Objec,ve of RERA Preamble of RERA says its a Bill for regula,on and promo,on of
real estate sector and to ensure SALE of plot, apartment, buildingin
ecient and transparent manner and to protect interest of
consumers..
Rela,onship The Act will be a Central Act with delegated Authority to State
between Central & Governments for certain ac,vi,es like making Rules sui,ng local
State Government condi,ons, appoint Authority, Appellate Tribunal etc. 5
Status of RERA
Act can come into force sooner as Powers given to State Government
Step Timeline
Passed by Rajya Sabha 10th March 2016
Passed by Lok Sabha 15th March 2016
Assent of the President of India 25th March 2016
Publishing of Act in Ocial GazeNe 26th March 2016
Date of Act Coming in Force Central Government to publish a
No+ca+on in Ocial Gaze;e
State Government to frame Rules Within 6 months of Commencement
State Government MUST setup Real Estate Time of 1 year from act coming into
Regulatory Authority (Note 1) force given to State Governments
State Government MUST setup Real Estate Time of 1 year from act coming into
Appellate Tribunal (Note 2) force given to State Governments

Note 1: State Government has been given Power to appoint any Authority or Person by Order
(no need for no4ca4on?) preferably Secretary Department of Housing to act as Authority
4ll actual Authority is established
Note 2: : State Government has been given Power to appoint by Order (no need for
no4ca4on?) any Appellate Authority func/oning under any Law to act as Tribunal under
this Act 4ll actual Tribunal is established 6
Structure of RERA
RERA has 10 Chapters 5 are Crucial from Business angle
Procedural Business / Finance Administra+ve
I. Preliminary I. Deni/ons VI. Advisory Council

V. RER Authority II. Registra/on IX. Audit

VII. Tribunal III. Func/ons and Du/es of X. Miscellaneous
Promoter
IV. AlloMees

VIII. Penal/es

Note 1: Roman numbers in table are Chapter numbers in RERA. The full names of the Chapter
has been shortened for beNer understanding and presenta4on

Link to download RERA:

hNp://164.100.47.4/BillsTexts/RSBillTexts/PassedRajyaSabha/realest-238-RSP-E.pdf

Status of Maharashtra Ownership of Flat Act (MOFA) (and similar Acts in other States)
RERA has repealed only the Maharashtra Housing and Regula,on Act, 2012 and hence
MOFA is s,ll applicable. Once date of commencement of RERA is no,ed in Ocial GazeNe,
the provisions of MOFA (and similar Acts in their respec/ve states) will con/nue to apply
to the extent that they are not inconsistent with RERA. 7
Definitions
Summary of Key Definitions required for understanding the Act

Provision Impact Planning / Issue

Building Any structure used for residen,al, Every type of construc,on
commercial, business, profession covered
trade purpose
Carpet Area Refer Slide Deni,on: Carpet Area Carpet Area will have to be
clearly disclosed everywhere
Common Areas Refer Slide Deni,on: Common Altera,on would need consent
Areas of 2/3rd alloNees
Es,mated Cost of Total cost involved in developing the Includes Land and approval cost.
the Project real estate project and includes the While levying penalty, es,mated
land cost, taxes, cess development cost as decided by Authority is
and other charges taken as the basis
Promoter Wide deni,on to cover all people Seller, Contractor, POA Holder,
involved in developing and selling JV Partner
Real Estate Project Development of building or plots for Development of project for Sale
sale. is only covered
Sanc,oned Plan All Plans, approvals and Permissions Registra,on of Project only amer
prior to start of Project Plans Sanc,oned
8
Definition: Carpet Area
Carpet Area means Net Usable Area of the Apartment
Carpet Area : INCLUDES Carpet Area: EXCLUDES
Area covered by the internal par,,on Area covered by the external walls
walls of the apartment
Areas under services shams
Exclusive balcony or verandah area
(See Note 1 below)
Exclusive open terrace area
(See Note 2 below)

Note 1:Exclusive balcony or verandah area:

Means the area of the balcony or verandah, as the case may be, which is appurtenant to the
net usable oor area of an apartment, meant for the exclusive use of the alloNee

Note 2: Exclusive open terrace area:

Means the area of open terrace which is appurtenant to the net usable oor area of an
apartment, meant for the exclusive use of the alloNee

9
Definition: Common Areas
Every Square Foot of Developed Area and Land
Provision
(i) the en,re land for the real estate project or where the project is developed in phases and
registra,on under this Act is sought for a phase the en,re land for that phase
(ii) the stair cases, lims, staircase and lim lobbies, r escapes, and common entrances and
exits of buildings
(iii) the common basements, terraces, parks, play areas, open parking areas and common
storage spaces
(iv) the premises for the lodging of persons employed for the management of the property
including accommoda,on for watch and ward stas or for the lodging of community service
personnel
(v) installa,ons of central services such as electricity, gas, water and sanita,on, air-
condi,oning and incinera,ng, system for water conserva,on and renewable energy
vi) the water tanks, sumps, motors, fans, compressors, ducts and all apparatus connected
with installa,ons for common use
(vii) all community and commercial facili,es as provided in the real estate project

(viii) all other por,on of the project necessary or convenient for its maintenance, safety, etc.
and in common use

10
Definition: Advertisement
Wide definition to cover all communications
Provision
Adver,sement means any document described or issued as adver,sement through any
medium
INCLUDES:
No,ce, circular or other documents

Publicity in any form, informing persons about a real estate project, or oering for sale of a
plot, building or apartment
Invi,ng persons to purchase in any manner such plot, building or apartment or to make
advances or deposits for such purposes

Definition: Sanctioned Plan

All Plans and permissions sanctioned by Competent Authority till start of Project
Provision
Site plan, building plan, service plan, parking and circula,on plan, landscape plan, layout plan,
zoning plan and such other plan and includes structural designs, if applicable
Permissions such as environment permission and such other permissions, which are approved by
the competent authority

11
Definition: Interest
Interest payable by Promoter form date of receiving amount
Payable by Promoter to Payable by Allo;ee to Promoter
Allo;ee
Deni,on rate of interest chargeable from the alloNee by the promoter,
in case of default, shall be equal to the rate of interest which
the promoter shall be liable to pay the alloNee, in case of
default;
Payable by Promoter to Calculated from date of receipt of amount or part thereof
AlloNee from alloNee ,ll refund of amount along with interest

Payable by AlloNee to Calculated from date of default ,ll date of payment
Promoter
Type of interest a) Interest men4oned in Agreement for Sale for defaults of
the terms of the Agreement

b) Interest prescribed by Rules for defaults and
contraven4ons under the Act

12
Definition: Promoter
Developer and Seller both become Promoters
Provision
a person who constructs or causes to be constructed an independent building or a building
consis,ng of apartments, or converts an exis,ng building or a part thereof into apartments, for the
purpose of selling all or some of the apartments to other persons and includes his assignees;
a person who develops land into a project, whether or not the person also constructs structures on
any of the plots, for the purose of selling to other persons all or some of the plots in the said
project, whether with or without structures thereon
any development authority or any other public body in respect of alloNees

an apex State level co-opera,ve housing nance society and a primary co-opera,ve housing
society which constructs apartments or buildings for its 5 Members or in respect of the alloNees of
such apartments or buildings; or
any other person who acts himself as a builder, coloniser, contractor, developer, estate developer
or by any other name or claims to be ac,ng as the holder of a power of aNorney from the owner of
the land on which the building or apartment is constructed or plot is developed for sale
such other person who constructs any building or apartment for sale to the general public.

Explana/on:
where the person who constructs or converts a building into apartments or develops a plot for sale
and the persons who sells apartments or plots are dierent persons, both of them shall be deemed
to be the promoters and shall be jointly liable as such for the func,ons and responsibili,es
specied, under this Act or the rules and regula,ons 13

Registration of the Real Estate Project
Ensure that every Project is registered before launch in any manner
Provision Impact
Registra,on of Project Promoter cannot adver,se, book, sell, oer for sale, invite
persons to purchase before registra,on
(Penalty of 10% of Cost of the Project for contraven4on)
Projects that need not be registered - Plot Area upto 500 sq mtrs
- No. of Apartments upto 8 including all Phases
- Comple,on Cer,cate received
- Project of redevelopment with no new allotment
Deemed Registra,on If Authority does not grant registra,on within 30 Days
Note: It seems Promoter can start ac4vi4es of sales etc. even
a]er deemed registra4on even if Login ID and Password not
received.
Rejec,on of Registra,on Can be done only if such applica+on does not conform to the
provisions of such Act, rules or regula,ons.
Note: Authority does not seem to have powers to go into
qualita4ve aspects of the Project, Background of Promoter,
defaults etc. Their role is ensure correct disclosure.
Period of Registra,on As per declara,on by the Promoter. Authority does not seem to
have any say to amend the period
Extension of Registra,on Can be done upto 1 year by the Authority in case of reasonable
circumstances and no default of the promoter

14
Registration & Impact of Ongoing Projects
Register projects not having Completion Certificate when Act comes into force

Provision Impact
Projects not require to be If Comple,on Cer,cate obtained before
registered commencement of the Act
Single Building with part Should be registered since en,re Building is one Real
comple,on for few apartments / Estate Project
oors
Project with several buildings Whether the Buildings with full comple,on cer,cate
and part comple,on for 1 or can be excluded from Registra,on as a completed
more buildings Phase of the Project depend on the facts each case
Sales Collec,ons from Customers Amer ongoing Project is registered, the sales collec,on
in sold units for ongoing projects amer registra,on should also be deposited in Separate
Account in which 70% collec,ons are deposited
Changes in Plans of Ongoing If ongoing Project is registered, then consent of all the
Project people whom apartments alloNed will also be required
Applica,ons of provisions of No exemp/ons have been given to ongoing projects
RERA and all provisions of RERA apply to them

15
Application for Registration
Promoter to also keep updated details on his Page on Website of Authority
Company Details Project Details Details in Adavit
Name, Registered Address, Copy of Approvals Legal Title in Land

En,ty Type (proprietorship, Sanc,oned Plans, Layout and Land is free from encumbrances or
partnership rm, LLP, Company Specica,on of the Project. details of encumbrances
etc) & registra,on Number Loca,on details and clear
Demarca,on.
Name & Photos of Promoters Details of Development Plan Time period for comple,on of
and facili,es project/phase
Details of Past projects in last 5 Proforma of Allotment LeNer, 70% of amount realised from
years (completed and under Agreement for Sale and alloNees to be deposited in
development) and their Current Conveyance Deed Separate Bank Account to be used
Status for construc,on and land
Details of delays in projects Number, Type and Carpet area Accounts of Project to be audited
completed and being developed of Apartments, exclusive within 6 months of Year End
Balcony and open terraces
Details of Land and Payments Number and areas of garages Promoter will take pending
pending in projects completed approvals in ,me
and being developed
Details of cases pending in Details of Real Estate Agents, Promoter has furnished all
projects completed and being Architect, Contractor documents
developed

16
Revocation of Registration
Authority has wide powers including Suo-Moto revocation
Provision Impact
Start of Revoca,on process Authority can start the process of revoca,on on:
- Receipt of Complaint or,
- Suo-Moto (on it own) or,
- Recommenda,on of Competent Authority (Local Authority /
Any other authority which has powers to sanc,on plans)
Condi,ons for Revoca,on - Promoter makes a default under this Act or Rules
- Violates any terms or condi,ons of the Approval given by
Competent Authority
- Promoter involved in any kind of unfair prac,ce or
irregulari/es
- Promoter indulges in fraudulent prac,ce
Opportunity to Promoter Given 30 Days show cause no,ce to promoter and considered
cause shown by him. Authority also has power to not revoke the
Registra4on and let the Promoter con4nue in interest of AlloNees
with certain condi4ons laid down by Authority
Consequences of Revoca,on - Debar Promoter from accessing Website for the Project
- Display his name & photo in list of defaulters
- Facilitate remaining work to be done by AlloNees or Associa,on
of AlloNees or Local Authority or any other Manner
- Freeze Bank Account of the Project
Appeal Promoter can le an Appeal with Appellate Tribunal
Appellate Authority Has wide powers to pass orders it deems t and this will include
revoca,on of Registra,on 17
Advertisements & Model Apartment
Has a wide scope and includes all communication related to Project
Provision Impact
Deni,on Any document described or issued as adver,sement
Publicity in any form is Care has to be taken in press releases, customer
adver,sement conferences, exhibi,ons etc.
Incorrect and false statement a. If Allotee retains the apartment - any person who
in adver,sement or Model gives advance can claim compensa,on from the
Apartment, Plot or Building Promoter if he has suered loss or damage

b. If AlloNee cancels refund en,re investment plus
interest plus compensa,on (Note: It seems for
cancella4on, showing he suered loss is not required)

Model Apartment Care to be taken will construc,ng Model / Show Flats and
even 3D Walkthroughs.

18
Booking & Sales
Booking is a critical stage: Allottees get all rights under the Act

Provision Impact
Cannot book, sell adver,se, oer for sale Investor Sale / Pre Launch not possible in Project
without registra,on
Taking Applica,on Fee instead of Not Possible as expressly prohibited
Booking Amount
Exis,ng projects need to register within 3 RERA will also apply to Apartments already sold
months of commencement of the Act if the Project has not received Comple,on
Cer,cate
All bookings to be reported on Website Repor,ng is to be done to Authority at Booking
of Authority stage itself and not registra,on of document
stage
Registra,on of Agreement Compulsory before taking more than 10%
booking advance or Applica,on Fee

Cancella,on of Booking Allotment has to be cancelled by Agreement of
Sale
(Note: It seems Agreement for Sale will have to
be entered into at the 4me of booking itself and
terms of cancella4on men4oned)
19
Allottee : Rights
All provision of RERA are applicable when a person becomes an Allottee
Rights
To obtain the informa,on rela,ng to sanc/oned plans layout plans along with the specica/ons,
approved by the competent authority
Such other informa/on as provided in this Act or the rules and regula,ons made thereunder or
the agreement for sale signed with the promoter
Stage-wise /me schedule of comple/on of the project, including the provisions for water,
sanita,on, electricity and other ameni,es and services
Claim the possession of apartment, plot or building, as the case may be, and the associa,on of
alloNees shall be en,tled to claim the possession of the common areas, as per the declara/on
given by the promoter during Registra/on of Project
Claim the refund of amount paid along with interest at such rate as may be prescribed and
compensa/on in the manner as provided under this Act, from the promoter, if the promoter fails
to comply or is unable to give possession of the apartment, plot or building in terms of the
agreement or due to discon/nuance of his business by suspension/revoca,on of his registra,on
or otherwise
To have the necessary documents and plans, including that of common areas, amer handing over
the physical possession of the apartment or plot or building as the case may be, by the promoter

Deni/on of AlloMee:
Person to whom an apartment, plot or building has been alloNed, sold (whether as freehold or
leasehold) or otherwise transferred by the promoter AND INCLUDES person who subsequently
acquires the said allotment BUT DOES NOT INCLUDE a person to whom such plot, apartment or
buildings, as the case may be, is given on rent 20
Allottee : Duties
Allottee can also get penalised or imprisonment for not following Orders
Du+es
Responsible to make necessary payments in the manner and within the /me as specied in the
said agreement for sale
Pay at the proper /me and place, the share of the registra/on charges, municipal taxes, water
and electricity charges, maintenance charges, ground rent, and other charges, if any.
Liable to pay interest, at such rate as may be prescribed, for any delay in payment towards any
amount or charges to be paid
Obliga,ons of the alloNee for and the liability towards sale considera,on, other charges and
interest may be reduced when mutually agreed to between the promoter and such alloNee
Shall par,cipate towards the forma,on of an associa,on or society or coopera,ve society of the
alloNees, or a federa,on of the same.
Shall take physical possession within a period of two months of the occupancy cer/cate issued
for the said apartment, plot or buildings the case may be.
Shall par,cipate towards registra,on of the conveyance deed of the apartment, plot or building, as
the case may

AlloNee, who fails to comply / contravenes any of the orders of Authority / Appellate
Tribunal he shall be liable to a penalty for the period during which such default con,nues:
Contravening Orders of Authority: Upto 5% of the cost of property
Contravening Orders of Appellate Tribunal: Upto 10% of the cost property OR
imprisonment upto 1 year OR BOTH
21
Construction of Project & Alteration of Plans
Understand nature of consent for addition/alteration
Provision Impact
Altera,on to Apartment/s, Plot/s Possible with Consent of person/s who has agreed to
be take the apartment.
(Minor addi4ons /altera4ons Notes:
necessary for structural and 2/3rd consent not required.
architectural reasons if cer4ed as
necessary by Architect or Engineer
allowed without consent of
alloNees)
Altera,on to Building Possible with Consent of every person who has agreed
to be take the apartment.

Note: This is 100% consent not 2/3rd Conent
Altera,on to Sanc,oned Plans, Needs consent of 2/3rd of AlloNees
Layout Plans, Building
specica,ons and Common Areas

22
Cost of the Real Estate Project
What will be included in the Cost for purpose of withdrawal from Separate Account?

Provision Impact Planning / Issues

Land Cost Included Can be withdrawn
Direct Costs of Construc,on & Included Can be withdrawn
Site overheads
Corporate Overheads, Adver,sing Can be included Should be debited to Project
& Marke,ng Costs so that withdrawal possible
from 70%
Joint Venture:
Refundable Deposit Excluded Deposit not a Cost

Revenue Share of Landlords Depends on Agreement Needs to be planned

Area Share of Landlord Cost of Construc,on of Needs to be planned
Landlord Area included

Why is understanding Cost of the Real Estate Project cri4cal?

Promoter can withdraw amounts from the Separate Account in which 70% from collec4on
from alloNees is deposited only to cover the Cost of Project

23
Utilisation of 70% deposited in Separate Account
Planning for withdrawal

Provision Impact Planning / Issues

Purpose of deposi,ng To cover Cost of Construc,on Payment of land cost and
70% and Land withdrawal of land cost from
(Word Land added in bill 70% amount deposited
introduced and passed in Rajya Separate Account possible
Sabha)
Amount to be withdrawn Withdrawal based on Percentage of Comple,on to
based on Percentage of Percentage of Comple,on of be cer,ed by prac,cing CA,
comple,on of Project Project and not Comple,on of Architect and Engineer
Construc,on
(Issue: In case their
Cer4cates dier which one
to consider?)
Each phase is a dierent Funds of one phase cant be Dening and planning each
project used for another phase correctly

24
Funding & Repayment for Real Estate Project

Utilisation of 70% for Interest and Repayment

Provision Impact Planning / Issues
70% amount received from Bank Funding for It seems this need not be
alloNees to be kept in Construc,on deposited in the Separate
separate account Account in which 70%
amount is deposited
70% amount received from Funds from Sale of It seems this need not be
alloNees to be kept in partnership / equity stake of deposited in the Separate
separate account the rm / company to Account in which 70%
Partner / Investors amount is deposited
Payment of Interest Cost of Project should Interest can be withdrawn
include all costs including from 70% por,on
Interest Cost

25
Cancellation of Agreement
Cancellation Clauses of Booking & Agreement need to drafted carefully

Provision Impact
Condi,ons of Cancella,on Promoter can cancel only in terms of agreement
for sale
Condi,ons for alloNee for approaching 1. If Cancella,on is not as per terms of
authority for relief agreement
2. Is unilateral
3. Without sucient cause
Note: All the condi4ons have to be sa4sed
Delay in payment by alloNee of cost of Promoter can charge interest at prescribed rate
at and all related charges
Compensa,on to Promoter No provision of compensa,on to Promoter even
in case of repeated defaults by alloNee

26
Possession & Maintenance
Understand nature of consent for addition/alteration
Provision Impact
Promoter fails or is unable to give If Allo;ee wishes to withdraw:
possession: Interest at rate as may be prescribed AND
- In accordance with terms of compensa,on
the Agreement
- By date as per Agreement or If Allo;ee wishes to con+nue:
- Due to Discon,nuance of Interest at rate as may be prescribed for every month
business as developer of delay ,ll date of possession
- Due to Suspension or
Revoca,on of Registra,on
- Any other reason
Loss due to defec,ve Title of Land Promoter shall compensate alloNee for loss caused to
him (i.e. Promoter) due to defec,ve Title in Land
Rec,ca,on of Defects amer Defects brought to no+ce within 5 years to be
possession rec,ed without cost within 30 days
Defects covered:
- Structural
- Workmanship
- Quality or Provision of services
- Any other obliga/on of promoter as per Agreement
27
Formation of Society & Conveyance
Both Promoter and Allottees to ensure formation of Society and Conveyance
Provision Impact
Registra,on of Project Proforma of Conveyance Deed has to be submiNed at
the ,me of Registra,on of Project
Forma,on of Society Promoter to enable forma,on of Associa,on/Society/
Federa,on as per Local Laws.
In absence of Local Laws, the Associa4on of AlloNees
can can form a Society within 3 months of majority of
alloNees booking property in the project.
Time for Conveyance Deed In case no ,meline specied in Local Laws: Within 3
months of date of issue of Occupancy Cer,cate
Responsibility of Promoter The responsibili,es of Promoter are ,ll conveyance of
(Also Refer slide Possession & Apartment to alloNees or the Common Areas to the
Maintenance) Associa,on of AlloNees. Responsibility for structural or
other defects con,nues even amer Conveyance.
Responsibility of AlloNee Every alloNee must par,cipate in the registra,on of
(Also Refer slide : Filing of conveyance deed. Promoter or Associa,on of AlloNees
Complaints) can le a complaint to Authority for failure of AlloNee.

28
Filing of Complaints
Any Aggrieved Person can file complaint to Authority
REGULATORY AUTHORITY Penalty
Who can le Any Aggrieved Person
Note: Following can also le a complaint:
- Associa,on of AlloNees
- Registered Voluntary Consumer Associa,on
Basis for ling complaint Viola,on or Contraven,on of provisions of the Act, Rules
of Regula,ons
Against Whom can Complaint - Promoter
be led - AlloNee
- Real Estate Agent
Interim Orders during enquiry Authority can pass Restraining Orders without giving
no+ce if it deems t where it is of the opinion that an act
has been commiNed or con,nuing to commiNed or about
to be commiMed in contraven,on of the Act, Rules,
Regula,ons.
Power to issue direc,ons Authority may issues such direc,ons to Promoter,
AlloNee, Real Estate Agent as considers necessary to
discharge its func,ons under the Act
Compe,,on Commission Authority has powers to suo-moto make a reference to
the Compe,,on Commission of India
29
Penalties on Promoter by Authority & Tribunal
Penalty for contravention can also include imprisonment
REGULATORY AUTHORITY Penalty
Not taking Prior registra,on u/s 3 Upto 10% of Es,mated Cost of the Project as decided
by the Authority (See Note 1)
Not paying Penalty imposed as - Imprisonment upto 3 years
above - Further penalty of 10% of project cost
Or - Or both
Con,nues to violate Sec 3
Giving false informa,on or Upto 5% of Es,mated Cost of the Project as decided
contravening provisions of Sec 4 by the Authority
Contravening any other provision Upto 5% of Es,mated Cost of the Project as decided
other than Sec 3 and 4 by the Authority

APPELLATE TRIBUNAL Penalty

Promoter fails to comply with, or - Imprisonment upto 3 years
contravenes any of the orders, - Penalty of 10% of project cost
decisions or direc,ons of the - Or both
Appellate Tribunal (See Note 2)
Note: 1) The es4mated cost of the Project will be not as declared by the promoter but as decided by
the Authority for purpose of penalty provisions
2) Appeal will be heard only a]er deposit of 30% of penalty or such higher percent as decided by
the Tribunal or amount to be paid to alloNee including interest & compensa4on or both 30

Cases pending in Consumer Court can be transferred
In addition to Penalty to Authority, Compensation is to be paid to the allottee

Provision
Cases pending on the date of commencement of the Act with following can be transferred to
Authority with their permission:
Consumer Disputes Redressal Forum
Consumer Disputes Redressal Commission
Na,onal Consumer Redressal Commission
The cases related to maNers under only 4 sec,ons can be transferred to Authority:
Sec 12: Adver,sement / Prospectus
Sec 14: Sanc,on Plan
Sec 18: Return of Amount and Compensa,on
Sec 19: Rights & Du,es of AlloNees
Authority to appoint Adjudica,ng Ocer to hold inquiry for gran,ng compensa,on and
dispose o the case in 60 Days

31
Real Estate Agents
Agents have to register and can be fined/imprisoned for contraventions

Provision Impact
Registra,on Every person who wants to be an Agent has to register with
the Authority before facilita,ng any sale of property
Registra,on Number Every agent to quote his Registra,on number in every sale
facilitated by him.
Du,es of Agent - Not facilitate sale or purchase of any property which is not
registered with Authority
- Maintain prescribed Books and Records
- Not involve himself in unfair trade prac,ce
- Facilitate possession of any documents or informa,on that
the alloNee is en,tled to at the ,me of booking
Penal,es for contravening Penalty of Rs 10,000 per day for which default con,nues upto
provisions of the Act 5% of cost of the property facilitated by him
Penal,es for contravening Penalty as prescribed by Authority per day for which default
orders of Authority con,nues upto 5% of cost of the property facilitated by him
Penal,es for contravening Penalty as prescribed by Authority per day for which default
provisions Appellate con,nues upto 10% of cost of the property facilitated by him
Tribunal or with imprisonment upto 1 year or Both
32
RERA : Impact on Cost
Key Provisions which will impact Cost of Project
Provision Impact
Plan submission for Project Cost of all consultants will have to be incurred upfront as
Registra,on Registra,on with Authority will require detailed Plans
Sale of Project amer Registra,on Capital of Promoter is likely to get locked for the 1-2 years from
Land Acquisi,on to Launch of Project amer sanc,on and
registra,on with RER Authority
En,re Project to be sanc,oned Change in Layout will require permission of 2/3rd alloNees ; hence
at start Promoters may have to pay all premiums and charges upfront
and get full layout sanc,oned
Deposit of 70% collec,on from Capital can be withdrawn in propor,on to comple,on of the
alloNees into Separate Account Project and hence will get locked up even amer launch
Insurance Title Insurance, Project Insurance and any other Insurance as may
be prescribed by the Authority will add to the cost of the Project
Comple,on within ,me Since there may be penal,es for delayed possession, Developer
will have to invest in new technology, beNer contractors etc.
5 Year Warranty Promoter will have to rec,fy all defects upto 5 years from
possession free of cost
Compliance with the Act Promoter will have to employ qualied internal team to monitor
compliance under the Act as well as appoint experienced
Consultants for review as the penalty for defaults is huge
33
Preparing for RERA
Key Activities for Developers before commencement of RERA

Provision Prepara+on
Changes to exis,ng Plans Developers need to do necessary amendments to their
Sanc,oned Plans if required (including NA Orders, EC etc.)
Registra,on Plan to take Comple,on Cer,cate for maximum projects

Agreement for Sale & all legal Review and redraming of Agreement for Sale to customers in
documenta,on view of provision of RERA
Training to Sta Sensi,zing sta as well as consultants to provisions of RERA,
geung their feedback on poten,al weak areas in compliance
and making suitable correc,ons in processes
Marke,ng Material Detailed review of all adver,ng, marke,ng and promo,onal
material including emails, real estate portals etc. to ensure
accuracy of informa,on
New Lands / Projects Factoring in the addi,onal costs, deferred cash ows etc.
while acquiring new land parcels / projects
Real Estate Agents Awareness and Training of Agents

34
Conclusion: Success Mantra in Era of RERA

Planning

Presenta/on

Performance

35
Thank You

CREDAI Pune - Metro

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