This blog provides insights into the criteria determining the exemption of real estate projects from RERA regulations. Understanding whether a project is exempt is crucial for both developers and homebuyers navigating the regulatory landscape.
Prior to the RERA Act, India’s real estate market was essentially unregulated, with no standardisation of business processes or transactions. Home buyers/allottees were continually confronted with challenges such as project delays, price escalation, and poor building quality due to a lack of regulatory framework. Furthermore, the sector lacks a quick procedure for resolving grievances. However, the implementation of the Real Estate Regulatory Authority Act provides relief to the buyers by quick dispute redressal. In order to RERA Complaint it’s any aforementioned that wherever the promoter doesn’t ever advertise, market, book, sell, supply purchasable or invite persons to buy in any manner plots, residences or buildings of a project, then such a project isn’t needed to be registered. Let’s know about Exemption of Real Estate Project Under RERA in this article.
Real Estate Regulation and Development Act
The Real Estate (Regulation and Development) Act, 2016 (RERA Act) was passed by Parliament in 2016, with the goal of increasing accountability and transparency in the real estate sector, standardising business practices and transactions, regulating and developing the real estate sector, protecting customers’ interests in sale/purchase transactions and monitoring the activities of promoters and allottees in such transactions.
The RERA Act applies to and mandates the registration of all real estate projects for which completion certificates have not yet been given as of May 1, 2017. However, requirements have been stipulated under Section 3(2) of the RERA Act for a real estate project that is not required to be registered under the RERA Act. No registration of a real estate project is required under Section 3(2)(a) of the RERA Act if the area of land to be developed does not exceed 500 square metres or the number of units to be constructed does not exceed eight, inclusive of all phases.
Exemption of Real Estate Projects Under RERA
The following real estate projects are exempted:
- When a promoter receives a completion certificate for a real estate project before the Act takes effect.
- Where the total area of land to be developed is less than 500 square metres, and the total number of flats to be developed is less than 8, including all phases.
- When a real estate project is undertaken for the purpose of renovation, repair, or redevelopment, and does not involve the marketing, advertising, or sale of any unit, plot, or building.
- Any real estate project that is not within the Planning Area’s boundaries.
- Nevertheless, if the RERA jurisdiction considers it necessary in the interests of allottees for real estate investments being established outside the Planning Scheme, it may, by order, direct the promoter of such project to register the proposal under RERA, but all of the provisions of law, guidelines, and regulatory requirements made thereunder shall apply to such projects from the point of registration.
Documents required for RERA Registration
- The name of the business, its registered address, the kind of business, such as Sole proprietorships, societies, partnerships, and corporations, the competent authority, and the particulars of such business, including the names of the promoters.
- If applicable, a verified copy of the approvals and commencement certificate was acquired from the competent authority.
- The current status of the promoter’s projects, whether completed or under development, including the current status of the projects and delays in completion, details of outstanding cases, details of the land type, and payments pending.
- The quantity, type, and carpeting area of the properties for sale in the project, as well as the size of the private balcony or verandah areas and, if available, the exclusive open terrace area with the apartment.
- In the event of property owned by another person, the land has a legal title on which the development is envisaged, as well as legally valid documents with certification of such ownership.
- A draft of the allotment letter, a selling agreement, and the conveyance deed to be signed with the allottees.
Validity of Registration under RERA
- The authorised registration will be valid for the term specified by the Promoter for the completion of the real estate project or the phase specified in the affidavit that follows the application form.
- The Authority may extend the registration approved by it upon receipt of an application from the Promoter in the following circumstances:
- War, flood, drought, fire, hurricane, earthquake, or any other natural calamity that disrupts the regular development of the real estate project is considered force majeure.
- If the conditions and grounds for the extension of the case are reasonable, the responsible body may extend the registration to a maximum of one year if it is not due to force majeure.
Who needs to Register their Real Estate Project?
- Any person who constructs or wishes to construct an independent building or a building including flats, or who wishes to convert an existing structure into apartments for the purpose of selling apartments to individuals.
- Any person who develops land into a project for the purpose of selling it to others.
- Buildings or plots built by such an authority or public body on land owned by them or made available to them by the government.
- Plots owned by the development authority or put at their disposal by the government for the purpose of selling apartments.
- A primitive cooperative housing society and a state-level cooperative housing finance society that creates apartments or buildings for their members or allottees.
Cancellation of Registration
The Authority may cancel a registration based on a complaint received or “suo motu” by sending thirty days’ written notice to the Promoter of such a real estate project: https://www.rera.tn.gov.in/, detailing the grounds for proposed revocation and asking promoters to present reasons for his project’s acceptance. The Authority may authorise or revoke the registration of the real estate project based on the Promoter’s response to the notice.
The notice suggesting registration cancellation will be issued if the following conditions are met:
- If the Promoter fails to comply with RERA in any way.
- If the Promoter fails to comply with the Authority’s approval terms and conditions;
- If the Promoter engages in any unethical or irregular behaviour, such as deception or false representation, or the publication of advertisements/prospects for services that are not intended to be provided.
- If the Promoter engages in any deceptive tactics, the prize will be forfeited.
FAQs on Exemption of Real Estate Project Under RERA
1. What if the project is not registered under RERA?
If a project is not registered under RERA, it may lack regulatory oversight, potentially posing risks for homebuyers. It is advisable to verify the project's RERA status before investing and consider legal advice if the project is not compliant.
2. What kind of projects fall under RERA purview?
RERA covers real estate projects that meet certain criteria, such as residential or commercial projects with a specified number of units. It aims to protect buyers' interests by regulating the real estate sector, ensuring transparency, and establishing accountability.
3. In which case RERA is not applicable?
RERA may not be applicable to projects that have obtained completion certificates before the implementation of RERA. Additionally, projects with smaller unit sizes or specific exemptions as per state regulations may be exempt. It's essential to understand the local variations in RERA applicability.
4. Why are some projects not RERA-approved?
Some projects may not be RERA-approved due to non-compliance with registration requirements. This non-compliance could be due to various reasons, such as delays in obtaining approvals, failure to meet eligibility criteria or intentional avoidance. Buyers should exercise caution and inquire about RERA status before investing in a real estate project.
Final thoughts on Exemption of Real Estate Project Under RERA
RERA has been a benefit to the Real Estate Administration in general, making all rules tighter than they were prior to RERA. More transparency has been witnessed in the business than ever before, and it also provides a suitable platform for home purchasers to invest in their ideal homes. It has brought about market discipline for all parties involved, including the agents.
Hope this blog Exemption of Real Estate Project Under RERA was helpful! To make the process more refined, a few issues such as consistency in the Act across the country, means of implementation of orders and judgments, and application of the Act to various types of projects should be revised and specifically described. Explore more about legal, tax, & compliance issues at Vakilsearch.
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