Major Priorities for Builders/Developers

If one takes a close look at the two big factors of real estate, then he would find that government and builders give the major push to it. Of course, buyers have their own significance, but their importance is felt in the reactions whereas actions are made by the authority and the builders. With RERA, the government has done its homework more or less perfectly, now it’s up the builders on how do they prioritise their work.

Acquisition of Land and Project Approval – Since, the current form of soft launching a project may become extinct as a project can only be started after the approval, builders would have to make sure that they get equity partners for land acquisition and approval of projects.

Compact Design Development – A builder must make sure that all the designs and layout plans are perfected in the first time since it will get very difficult to get them changed once the project gets approved by RERA.

New Marketing Tactics – RERA has given strict guidelines on the market procedure of a project. Hence, a builder will have to re-plan his strategies to market a project since unattainable promises will not serve them well.

Accurate Cash-Flow Planning – Provided that 50% of the funds will be immovable from the project’s escrow amount, the builder will have to make better ties and planning in order to maintain a proper cash-flow.

Project Delivery Capabilities – Since timely approval is the top most priority of any builder now, he must use all his management resources in a highly efficient manner. This would include designing, budgeting, marketing and many other variables that come in Project Management offices (PMO).

Better Customer Relationship Management – With RERA and the 2-3rd majority of buyers intervening in the builders cause, better ties and proper professional relations with the buyers will result in a better out-pour.

RERA Affects the Launch of New Projects in Delhi NCR

Real Estate Regulatory Authority of India has already started showing its effect. RERA policies have made it mandatory for the builders to deliver the projects on time. If not delivered on time, they will be penalized and may have to face imprisonment too.

While various residential markets across the country showed 7% growth in property sale, new launches in NCR dropped by 41% in the first half of 2016. This is because developers are now busy completing the existing projects to meet the deadline. A steady growth is registered in Greater Noida and Gurgaon projects in which 80% of total projects were launched.

RERA Affects the Launch of New Projects in Delhi NCR
courtesy: Hindustan Times

Rules on Salary Payable to the Chairperson, Members and other Officers in RERA Authority

RERA India is not only a buzzword among buyers and developers but is also of great significance to the Chairperson and Members of Authority. From knowing the selection procedure to the remuneration to the paid leaves, RERA is of great interest among Real Estate Regulatory Authority.

The draft rules of RERA related to remuneration payable to people in duty are as follows:

  • The Chairperson will be paid a salary of rupees two lakh fifty thousand every month. But they will not be entitled to any allowance of housing and vehicle.
  • The salary of Members of Authority differs for whole time members and part time members. The whole-time member will be paid a monthly salary of rupees two lakh. The whole time members will not be entitled to any vehicle or housing allowance. The part time member who will not be government servant will be paid salary on the basis of the meetings of Regulatory authority he attends.The salary shall be decided by the government from time to time. The part time members same as whole time members will not be be entitled to any housing or vehicle benefit.

A total of thirty paid leave will be granted to the chairperson and all the members of authority every year.The allowances and other benefits will be decided time to time by the appropriate government.

The pay, allowances, leaves, joining time, joining time pay, the age of superannuation and various other services of officers and other employees engaged by regulatory authority shall be decided by appropriate authority from time to time.

The Consultants and experts appointed shall not be considered the permanent members, they may appointed for a ensure of one year. Further the honorarium will be determined by the government and they shall be terminated by the authority by serving one month’s notice.

MoHUPA’s Draft for Real Estate Agents Based on Real Estate Act of 2016

I – Documentation Requirements of Real Estate Agent Registration

Every agent must submit following details in a written form in order to fulfil the application.

(a). An agent must provide brief details of his work and company. This will include his name, company’s name, type of enterprise etc.
(b). The information for registration should include the association bye-laws, memorandum, and articles.
(c). A photograph of the agent, if an individual, or photographs or all the directors, partners and shareholders of the firm.
(d). PAN card copy.
(e). Income tax return declaration of previous three financial years which have been filed under the Income Tax Act of 1961. In case an agent had been exempted from this, he must have the documents to support his assertion.
(f). Address proof of the place of doing business.

II – Registration Fee –

The agent has to submit a registration fee in the form of a demand draft while applying for his registration under RERA. An amount of Rs.25,000 has to be paid if the agent works individually while an amount of Rs.2,25,000 will be paid if there are more than one agents.

III – Matters Related to Rejection or Approval of a Registration Application –

(a). If an agent gets approved in the RERA registration, he will get a registration certificate and a registration number.
(b). The authority will give proper notifications to those agents who get rejected.
(c). The approval of the registration will be valid for a period of 3 years.

IV –Matter Related to the Renewal of Real Estate Agent Registration –

(a). There should be a minimum gap of three months between the renewal date and the date of expiration.
(b). The application of renewal of registration will be made with a demand draft of Rs.5000 in case of an individual agent and Rs.50,000 in case of more than one agents.
(c). The agent has to submit all his updated documents which were required during the first time registration application.
(d). The rejection or approval of renewal of the registration of the agent will be properly notified by RERA. Adding to that, no rejection will be made where an opportunity to the agent to be heard is not given.
(e). The renewal will only be made if RERA finds that the agent complies with all the requirements set by it.
(f). The renewal of registration will be valid for further 5 years.

V – Matter Relating to the Revocation of the Registration – 

The revocation of the agent’s registration will be done according to the norms and process of RERA.

VI – Maintenance of Records

The real estate agents must keep records and maintain the accounts and documents for all the sales which will be according to the provisions of Income Tax Act of 2016.

VII – Functions of Real Estate Agent

The agent will provide appropriate assistance to the buyer and the promoter/builder of the seller regarding the sale of the flat. His work will be to ensure that a simple and hassle-free agreement is made between the two parties.

Following Are the Information Which the Promoters/Builders Have To Provide During Their Registration Process in RERA.

RERA Registration Process(a). Pan card of the promoter/builder.
(b). The information of income tax returns for the three previous financial years with the audited balance sheet of the promoter/builder of the previous financial year.
(c). The promoter/builder must clarify the number of open parking spaces.
(d). A legal copy which certifies the possession of the land in the name of the promoter/builder where the project will be constructed. He must be in possession of all the valid documents in case the land belongs to someone else.
(e). The proper details of the land should be provided i.e. matters related to mortgage, rights, title etc. of the land.
(f). In case the promoter/builder is not the owner of land, then he must he must bring a consent letter of the actual owner with documents related to collaboration, agreement and joint agreements which shows a mutual agreement between the promoter/builder and the owner.

All the above mentioned documents shall be provided in hardcopy until the process of web portal starts in RERA India website.

II – Registration Fee –A registration fee has to be submitted by the promoter/builder during the registration application with the use of demand draft from a bank. The registration will be set according to some calculations which are:

(a). Rs10 per sqm. on land less than 1000 sqm. and Rs20 per sqm. on land more than
(b). Rs50 per sqm. on commercial less than 1000sqm. and Rs100 per sqm. on commercial land more than 2000sqm.

III – During all these procedures and in the overall process in a real estate, a promoter/builder cannot discriminate against any buyer on the grounds of sex, religion, caste, gender identity etc. during the allotment time.

IV –Cancellation of registration – If a promoter/builder applies for a withdrawal from the registration form before the expiry period of 30 days, a sum of Rs 50,000 or 10% of the project of the fee paid earlier (whichever is more) will be retained by the authority. The remaining amount will be returned within a month of cancellation application.

V – Rules regarding the disclosures of existing projects by the promoters/builders –

(a). In case the promoter/builder has not been able to receive the completion certificate will have to make an application in RERA (Real Estate Regulatory Authority) within the specified time.
(b). The promoter/builder has to provide all the details regarding the project as mentioned in the bill which should also include the status of a project’s completion.
(c). The promoter/builder has to disclose the carpet area of a flat. The disclosure is mandatory even if the sale has been done with either built-up area or super built-up area. Moreover, the validation of an agreement will not be affected with such disclosure.
(d). The plot area should be disclosed when dealing in plots. (through latitudes and longitudes coordinates).

VI – Where Withdrawal of money from the separate account can be made-

(a). In matters of land documents relating to purchase, lease rights etc. for a promoter/builder.
(b). In matters related to construction work on the physical development of a project.

VII – Matters related to approval and rejection of a registration application –

(a). If a project gets registered under RERA, it will get a registration certificate and a registration number.
(b). If a registration application gets cancelled on the grounds of any faults, the applicant will get proper notice as sanctioned under RERA.

VIII – Matters related to the Extension of registration granted –

(a). There should a gap or minimum three month between the extension date of approval of registration to the date of expiration of the registration.
(b). In case a promoter/builder wants to extend his registration period, he will have to make such application with twice the amount of demand draft fee form the first time registration application. Also, he has to produce documents reasoning the extension of the registration and why the project got delayed in the stipulated time.

In case of forca majeure (superior force or unavoidable accident), the authority have in its power avoid the submission fee of extension application.

(c). The extension will not be more than the period provided by the local laws for completion of a project.
(d). RERA will inform a promoter/builder in case of registration or rejection of the extended application.
(e). In case of revocation of registration of a project, RERA will inform the concerned promoter/builder.

XI – Agreement of Sale – If a buyer makes an agreement to sale with a seller where the plot or the flat is not registered under RERA, then he cannot be subjected to the agreement limits.

Introduction to Draft Presented by Ministry of Housing & Urban Poverty Alleviation

RERA ConsultantsReflecting the on-going problems in real estate of India, the government passed a RERA (Real Estate Regulatory Authority) Bill on 1st May 2016. The bill was a part of Real Estate (Regulation and Development) Act of 2016 which was pioneered by Ministry of Housing and Urban Poverty Alleviation (HUPA). RERA contains the set of rules and regulations that require to maintain proper transparency and governance.

The RERA implementation has been clearly defined in the Real Estate Act of 2016. But there were some issues regarding the rules in the union territories of India as they are not considered as states. Thus, to make sure that RERA has been properly implemented in the union territories, Ministry of HUPA has presented a draft with clear sets of rules and regulations. This draft may further get amended with people’s suggestions. Ministry of HUPA has given a time till 8th of July for people to comment through email or the physical address of the concerned ministry.

Chandigarh, Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli and Lakshadweep are the union territories in which this draft applies will see the making of a full-fledged law.