India is the world’s fourth-largest economy today. While all industries have contributed significantly to this growth, the service sector has made the biggest contribution. The real estate industry is a major contributor to the service sector. To regularize the norms and protect builders as well as buyers, the RERA was introduced under the Real Estate Regulation and Development Act 2016. This act applies to the real estate sector across 23 states. In this blog, we have compiled everything you need to know about RERA. Also, you will get to know how a real estate CRM helps manage compliance and elevate your marketing efforts.
What is RERA (Real Estate Regulatory Authority)?
RERA or Real Estate Regulatory Authority is an act introduced by the Government of India in 2016. This act protects the rights of both developers and homebuyers. Keep reading this blog to learn more about RERA, its objectives, and functions.
What are the Objectives of RERA?
The main purpose behind the enactment of RERA was to ensure transparency, accountability, and efficiency in the real estate ecosystem. RERA has some pre-defined objectives, which are as follows:
Consumer Protection
The main aim of the RERA Act is to safeguard the interests of builders and homeowners. It ensures that individuals in the real estate realm follow fair practices and provide accurate information to consumers.
Encourage Transparency
The RERA Act is known for promoting transparency in the real estate environment. Property developers are required to provide mandatory project details, such as project timelines and legal approvals, to help buyers make informed decisions.
Standardization and Accountability
RERA has a certain set of defined guidelines and norms for real estate developers. It ensures compliance with timely project completion, construction norms, and quality standards. Any deviation or discrepancies hold the developer accountable.
What are the penalties under RERA?
Non-compliance with RERA leads to heavy penalties for promoters, homeowners, and agents. Here is a tabular representation that underlines the penalties against the offence committed.
For Promoters
| Offence | Penalties |
| Un–registration | Penalty of 10% of the project’s estimated cost. |
| Representing False Information | Penalty of 5% of the project’s estimated cost. |
| Violation of Laws | Either 3 years of imprisonment or a penalty of 10% of the estimated cost of the property, or maybe both. |
For Agents
| Offence | Penalties |
| Unregistered Projects | Penalty of Rs 10,000 per day up to 5% of the approximate cost of the project. |
| RERA Compliance Violation | Every day a penalty of up to 5% of the project’s estimated value. |
| Non-compliance with the Appellate Tribunal | Either imprisonment up to 1 year or 10% of the project’s estimated cost, or both. |
For Homebuyers
| Offence | Penalties |
| RERA Compliance Violation | Daily penalty up to 5% of the approximate cost of the project. |
| Non-compliance with the Appellate Tribunal | Either imprisonment for up to 1 year or 10% of the approximate cost of the project, or both. |
What are the Functions of RERA in Real Estate?
The RERA authority performs various functions. We have mentioned each function in detail.
- Registration and Regulation: The RERA authority has the legal power to list and maintain real estate developments as well as real estate brokers.
- Record Management: RERA authority issues and retains project records available for public review.
- Advertisements and Disclosures: It manages the advertisements and promotional events utilized by property developers and agents. The authorities ensure that the disclosures and advertisements provide precise and truthful information to buyers that doesn’t mislead them.
- Consumer Grievance Redressal: Resolving consumer disputes is the prime focus of RERA. It acts as a mediator between developers and buyers for resolving disputes between the two parties.
- Promoters Database: RERA maintains a database of all projects. This information serves as a record. It also includes the list and images of real estate agents and promoters whose licenses were cancelled.
- Obligations: Obligation compliance ensures that all necessary measures imposed on builders, property allottees, and estate agents are met.
- Order Compliance: Order compliance confirms adherence to rules and regulations.
What are the Documents Required to Register Under RERA?
If you want to register under RERA, keep the following documents ready in advance:
- Project Details: The project details consist of relevant information about the developer, project name, location, type of project, and project completion timeline.
- Land Documents: Land documents involve permits to develop constructions on the land.
- Building Plan: It focuses on the layout and detailed architecture of the project.
- Approvals: Attest clearance and approval copies from the governing authorities, such as environmental clearance.
- Financial Details: Provide financial details like project estimates and funding arrangements.
- Promoter Details: It includes the details about the property developer or promoter, mentioning their background, experience, and track record.
What are the Steps to Register Projects under RERA?
The RERA registration process differs from state to state. Given below are the general steps that will give you a complete overview of the steps required to register projects under RERA.
Step 1: Eligibility Criteria
RERA has a specific set of eligibility criteria for projects. It includes a minimum land area, financial stability, and required approvals from the local authority. You must check that your project meets the eligibility criteria.
Step 2: Documents for Registration
To register your property under RERA, you will be required to submit some relevant documents. These documents will include details like building plans, financial details, ownership proof, and land documents.
Step 3: Account Creation
Visit the official website of the particular state RERA authority and create an account if necessary. Fill out the application form with the required details.
Step 4: Fee Payment
After filling out the form, pay the registration fees. The fee structure differs based on the structure and type of the project.
Step 5: Form Submission
Submit the application form and relevant documents on the online portal. After the successful submission, RERA authorities will review the form and may seek further clarification if required. For the submission and verification process, it may involve physical verification of the project site.
Step 6: Registration Certificate
After a complete review and application approval, the RERA authority will issue the registration certificate. The registration certificate comes with a unique registration number. This certificate is compulsory for advertising, marketing, or selling units of a project.
What are the Benefits of the Real Estate Regulatory Authority (RERA)?
- Safeguards Homebuyers’ Interests: RERA protects homebuyers against any fraud. It facilitates transparency, timely property possession, and a grievance management mechanism.
- Increased Accountability: RERA holds developers and agents accountable for illegal actions. This reduces unethical activities and ensures compliance with regulations and quality standards.
- Increased Market Credibility: The presence of a regulatory authority such as RERA increases the real estate market credibility, attracting developers and buyers.
- Dispute Settlement: RERA facilitates an advanced-level dispute resolution mechanism, facilitating a timely response to consumer complaints.
- Quality Checks: The regulatory authority has a certain set of guidelines for construction, which ensures developers abide by the norms to deliver projects.
How Real Estate CRM Streamlines Processes?
The real estate business largely involves builders and brokers. They are the main people shaping the real estate landscape and managing multiple things at a single time. However, managing everything altogether is a complex process. Therefore, it’s advisable to incorporate a real estate CRM into the business that helps in streamlining complex business processes. To ascertain the same, here are its key features:
Centralized Dashboard
An efficient real estate CRM provides a centralized dashboard to store all the necessary documents in one place. It not only enhances accessibility but also strengthens Document Management, ensuring that project files, approvals, and compliance documents remain organized, secure, and easy to retrieve.
Automated Workflows and Reminders
From project registrations to contract submissions, there are deadlines for everything. Builders and brokers must adhere to the deadlines to avoid penalties. This is when a real estate CRM comes into place. It helps in automating workflows and providing timely reminders, which minimizes the risk of missed deadlines.
Detailed Interaction and Transaction Tracking
Physical tracking and recording interactions are next to impossible for builders and developers. A real estate CRM system log feature allows for detailed interaction and transaction tracking. You can log into client and internal team interactions, such as emails, calls, messages, and site visits. Apart from that, you receive transparent progress on the transaction history and CLP payments of the project.
Conclusion
With the rapid advancements in the real estate world, RERA norms are getting more complex and strict. It ensures a professional and trusted relationship among property developers, brokers, and agents. This regulatory act has a necessary set of rules and regulations for developers and buyers, which helps in navigating a secure environment. As a builder or broker, if you are seeking a solution to streamline your real estate business operations, a real estate CRM like HomeLead will be a worthwhile investment.
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