Introduction to RERA
Government of India has enacted the Real Estate (Regulation and Development) Act 2016 and all the sections of the Act shall come into force with effect from May 1, 2017. Under this Act, Government of Maharashtra established Maharashtra Real Estate Regulatory Authority (MahaRERA), vide Notification No. 23 dated 8 March 2017, for regulation and promotion of real estate sector in the State of Maharashtra.
The key components of Real Estate (Regulation and Development) Act, 2016 are as follows:
1. Real Estate Regulatory Authority and Appellate Tribunal
Under this Act, appropriate government shall establish Real Estate Regulatory Authority for regulation and promotion of the real estate sector in the State / UTs. The Authority shall strive to facilitate the growth and promotion of a healthy, transparent, efficient and competitive real estate sector while protecting the interest of allottees, promoters and real estate agents. The authority shall also establish an adjudicating mechanism for speedy dispute redressal regarding registered real estate projects. The key responsibilities of the Authority shall be as follows:
- Ensuring Disclosures of Real Estate Projects by Promoters
- Real Estate Projects Registration
- Real Estate Agents Registration
- Complaints Redressal
- Provide recommendations to appropriate Government on in matters relating to the development & promotion of real estate sector;
The appropriate Government shall also establish Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority. Any person aggrieved by any direction or decision or order made by the Authority or by an adjudicating officer may file an appeal before the Appellate Tribunal and the appeal shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal within a period of sixty days.
2. Real Estate Projects Registration
All commercial and residential real estate projects will have to register except in projects where
- area of land proposed to be developed does not exceed five hundred square meters
- number of apartments proposed to be developed does not exceed eight inclusive of all phases
- promoter has received completion certificate for a real estate project prior to commencement of this Act
- 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
No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area within Maharashtra, without registering the real estate project with the Maharashtra Real Estate Regulatory Authority(MahaRERA). Promoter of ongoing real estate projects, in which all buildings as per sanctioned plan have not received Completion Certificate, shall also be required to be registered for such phase of the project which consists of buildings not having occupation or completion certificate.
If any promoter fails to register as per Act, he shall be liable to a penalty which may extend up to ten per cent of the estimated cost of the real estate project. On continued violation, he shall be punishable with imprisonment for a term which may extend up to three years or with fine which may extend up to a further ten per cent of the estimated cost of the real estate project, or with both.
Apart from Registration, the promoters shall be required to provide quarterly updates on the status of the project to the authority.
3. Real Estate Agents Registration
All Real Estate Agents should register under this Act. No real estate agent shall facilitate the sale or purchase of or act on behalf of any person to facilitate the sale or purchase of any plot, apartment or building, as the case may be, in a real estate project or part of it, without obtaining registration under this section.
If any real estate agent fails to register, he shall be liable to a penalty of ten thousand rupees for every day during which such default continues, which may cumulatively extend up to five per cent of the cost of plot, apartment or buildings, as the case may be, of the real estate project, for which the sale or purchase has been facilitated
4. Filing of complaints
Any aggrieved person may file a complaint with MahaRERA or the adjudicating officer, as the case may be, with respect to any registered real estate project, for any violation or contravention of the provisions of this Act or the rules and regulations made there under. The Authority shall establish an adjudicating mechanism for speedy redressal of such complaints.
Any person aggrieved by any direction or decision or order made by MahaRERA or by an adjudicating officer may file an appeal before the Appellate Tribunal
Any person aggrieved by any decision or order of the Appellate Tribunal, may file an appeal to the High Court
5. Financial Discipline
The Act strives to ensure greater financial discipline in the real estate sector. Some of its provisions are as follows:
- A promoter shall not accept more than ten per cent of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale
- Seventy per cent of the amounts realized for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose
- Withdrawal from such accounts shall be in proportion to the percentage of completion of the project, which shall be certified by an engineer, an architect and a chartered accountant in practice.
- Promoter to compensate buyer for any false or incorrect statement with full refund of property cost with interest
- Project Accounts to be Audited / FY. Copy to be submitted to MahaRERA
- Provision for MahaRERA to freeze project bank account upon non-compliance
- Provision for stronger financial penalties for MahaRERA non-compliances
The Act shall drive great transparency in the real estate sector as follows:
- Details of all the Registered Projects shall be available online for citizens including:
- sanctioned plans, layout plans, along with specifications, approved by the competent authority
- Proposed Plan, Proposed Layout Plan of the whole project and Floor Space Index proposed to be consumed in the whole project, as proposed by the promoter
- Proposed Number of building(s) or wing(s) to be constructed and sanctioned number of the building(s) or wing(s).
- the stage wise time schedule of completion of the project, including the provisions for civic infrastructure like water, sanitation and electricity.
- quarterly update of the list of number and types of apartments or plots, as the case may be, booked
- quarterly update of the list of number of covered parking, garages booked;
- quarterly update of the list of approvals taken and the approvals which are pending subsequent to commencement certificate;
- quarterly update of the status of the project; and
- such other information and documents as may be specified by the regulations made by MahaRERA.
- The advertisement or prospectus issued or published by the promoter shall mention prominently the website address of MahaRERA, wherein all details of the registered project have been entered and include the registration number obtained from the Authority
7. Citizen Centricity
- Citizens shall be able to view, on MahaRERA website, all disclosures pertaining to registered projects. This shall enable data driven informed decision making.
- Promoter cannot make any additions and alterations in the sanctioned plans, layout plans and specifications and the nature of fixtures, fittings and amenities etc. without the previous consent of at least two-thirds of the allottees, other than the promoter, who have agreed to take apartments in such building.
- If the promoter fails to complete or is unable to give possession of an apartment, plot or building, in accordance with the terms of the agreement for sale, he shall be liable to pay interest for every month of delay. Further, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him with interest
- Promoter to enable formation of Legal Entity like Cooperative Society, Company, Association, Federation etc. within three months from the date on which sixty per cent of the total number of Purchasers in such a building or a wing, have booked their apartment.
- Promoter shall execute a registered conveyance deed in favour of the allottee within three months from date of issue of occupancy certificate or sixty per cent of the total number of Purchasers in such a building or a wing, have paid the full consideration to the promoter, whichever is earlier.
Real Estate (Regulation and Development) Act 2016 is a step towards reforming the real estate sector in India, encouraging greater transparency, citizen centricity, accountability and financial discipline.
In India, the developing real estate market offers a wide range of residential projects suitable for all income group populace from studio apartments to luxury villas, budget homes to high rise sky scrapers in metro, tier II and III cities. As the housing rent increases in skyrocketing speed, it is advisable to invest your income in a residential property which will save your monthly rentals in addition to serving as an investment.
Nowadays there are government and private banks in India offering home loans for home buyers by lending up to 80% of the total cost. If you are a first time home buyer looking for loan, here is the step by step guide to the process of obtaining a home loan:-
After choosing the bank for home loan, prepare your payment as banks offer only 80% of the total cost. Also check your loan eligibility i.e. CIBIL and keep all the necessary home loan related documents ready.
1. Home loan Application
You can avail the application form from any bank office or download it from online. Duly fill the form and attach copies of the loan related documents such as ID proof, Address proof, Age proof, Income proof, proof of educational details and employment, bank balance statement etc., if you apply online, you can get instant provisional approval within 24 hours.
Send the form and the non refundable processing fee to the bank for loan approval process. The processing fee differs from one bank to another from 0.25% to 0.50% which is usually non refundable in case if the loan is denied. This is used for the loan processing procedure and maintenance of your loan.
2. Discussion with the Bank
After submission of application form, the applicant will be called by the bank for a face to face discussion to evaluate the papers and decide on the payment capacity and to decide on the loan amount etc. This discussion meet happen in 2 or 3 days after the submission of application form. At this point, the applicant can also bring the original documents of all the proofs submitted earlier.
3. Bank Investigation
A field investigation will be conducted to check all the information stated in the application form and qualified bank employee or a verification agent will investigate and verify all the details. The representatives will visit the office and residence of the applicant to verify the details. In the process, the references mentioned by the applicant will also be checked and cross verified.
After this, the bank will verify the applicant’s repayment capacity and if it is not satisfactory, the loan will be rejected. It will check the ability of the borrower to repay the loan amount with interest on time along with the previous loan transactions track record. If the bank finds that the applicant can repay, then the loan will be sanctioned.
4. Offer Letter for the loan sanction
Once the loan is sanctioned, the bank will send an offer letter to the applicant with details regarding the home loan such as loan amount sanctioned, interest rate for the loan, type of interest selected: fixed or floating interest rates, loan tenure, mode of loan repayment, special scheme or offer if applicable and the general terms and conditions of the home loan approved.
If you are satisfied with all the norms, then you can provide an acceptance letter with your signature to the bank to acknowledge the sanction.
5. Submission of legal documents
These days, the bank requires all the legal documents related to the property for availing the loan. The bank will perform legal check and these documents will be detained by the bank till the applicant repays the loan amount.
6. Technical Valuation of property
Along with the legal check, the bank will also perform a technical valuation of the property. For under construction projects, the bank will check the quality and progress of the construction work along with the locality valuation to evaluate the value of the property. The bank has qualified valuators to assess the property value under established parameters. This is performed to ensure a clear title and if the property is viable and meets the valuation standards.
7. Registration and Signing
After all the financial and technical valuations, the home loan registration process begins. The legal loan documents will be prepared on stamp papers by the bank lawyer. The loan agreement must be signed and submitted back to the bank along with post dated cheques.
8. Loan Disbursal
After registration, the bank will disburse the loan amount based on the agreed terms of disbursal either as a full payment or partial payment mode in stages. Usually for ready possession of the property, the amount will be disbursed in full.
The above mentioned home loan process is applicable in most banks though there might be changes according to individual bank policies. This long home loan process is now simplified with the instant home loan process available online. You can try any one based on your convenience and requirements.