Editorial: RERA for Buyers

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By Dr. Sanjay Chaturvedi, LLB, PhD.
The Real Estate (Regulation and Development ) Act 2016 , commonly known as RERA, is a Act dedicated to real estate buyers in the country. In 2012, Centre Government had been receiving lakhs of complains against err builders who either charging on super built-up area, delayed or no possession, frauds in misrepresentation of facts, cheating, defectives titles and what not. The law makers then felt the Regulator for real estate just like SEBI. With due deliberations, the Act was passed in 2016 and came in to effect since 1st May 2017. Some remaining provisions were notified by the central government and came in its full fledge flair since 1st May 2017.
We must understand that the preamble of RERA says that the Act is to establish Real Estate Regulatory Authority and Tribunal in every state and biggest word the intro to the Act was “Transparency”. Law makers wanted builders to give all possible information and do not diviate from what is offered. Honour the contractual obligations and hence new RERA was mainly enacted to control real estate transaction process and real estate development process, keeping in mind the welfare of real estate buyers.
However, the Act excluded lease , Live and License. The Act not only included private builders but also public and government owned housing boards and companies which included Slum Boards or State Housing Borad or special planning authorities if providing housing. RERA also, for the first time, included real estate brokers and middlemen who sometimes found hand in glove with errant builders. All real estate agents now needs to register themselves with state RERA Authority respectively. One cannot practice in other state if there is no registration in that state. All real estate agents must be registered with RERA Authority and also builders must enroll them as their agents to be included in project info uploaded on RERA official websites.
RERA for the first time defined many terminologies and definition which were much needed. Terms like Open Parking, Covered Parking, Conveyance, Immovable Properties, Carpet Area and such other definitions which will bring much transparency in the industry. Easements Rights like Right to Air and Right to Light will lead to big confusion especially in Villages and semi urban areas where a small window or Mokhala is kept open for ventilation purpose and the neighbor wants to close it for future expansions. Not only in semi urban areas and towns but in metros like Gurugram and Mumbai where space is the crunch.
The definition thus provided for in the Real Estate Regulation and Development Act 2016 is :
Section 2 (z) “immovable property” includes land, buildings, rights of ways, lights or any
other benefit arising out of land and things attached to the earth or permanently
fastened to anything which is attached to the earth, but not standing timber, standing
crops or grass;
The Immovable Property under the provisions specifically says that it includes Rights of Ways, lights or any other benefits arising out of land. Buyers of flats in a Tall tower got surprised when yet another tower came up , blocking air and lights and view for which they have paid premiums to the builder. Had the RERA definition passed earlier, the new tower would have been restricted. More specifically, easement of rights of ways also covered under the definition.
The right of way cannot be sold or purchased separately but it is attached to Domain Heritage. In India, huge amount of cases pending to decide the easement rights. Under the definitions of RERA, which is very indicative, expressly inserted and recognized the Right of  Lights. A small structure which is having consume all FSI will claim its Property Right under the definition from any tall structure coming up and will block its light. A window which gives light to a lower floor will certainly object to another tall structure coming up and blocking Light and views.
All benefits arising out of land and things attached to earth permanently wll also attract need for explanation to the section. We have Transfer of Property Act 1882 and almost 500 Acts which governs the property transactions and its Rights, Interest and Ownership. Defining Immovable Property under RERA will lead to many confusions and chaotic situations especially in mega cities and metros where skyscrapers will block each other’s light and way.
All the real estate projects which are more than 500 sq mtrs and 8 units or more needs to register with state RERA Authorities. These figures may be relaxed by the state Rules and Regulations. All the projects which between “Commencement Certificate” by whatever name called and “Occupancy Certificate” by whatever name called needs to register with state RERA. There may be some relaxation from state to state under its rules and regulations. The License to the project will be granted only when land is owned / leased  / joint development and has the permission to develop by the builder. All sanction plans must be obtained before applying for license.
A sanction plan includes Plan passed by Local Self Government or Municipality/ Corporation/Councils and all permissible permissions like Environment Permissions, CRZ, Road, Fire, Civil Aviation, Railways, Defense which ever is applicable. The builder also needs to disclose Lis Pendency or litigation under various courts pertaining to the project. Encumbrances or mortgage finance also needs to be disclosed while applying for project registration.
Gone are the days of Pre-launches. It is normal tradition of builders that they use 90% of funds from advances from customers like pre-launch and initial booking amount. Now since it will be punishable offence if builder sell without taking license or registration. Bringing project up to stage of Commence Certificate from local body is a big task. The RERA says that the builder cannot sell without Commencement Certificate (CC).. If suppose CC obtained for 7 floor then builder cannot book apartments for 8th floor or above. Funding real estate projects is very difficult task. Putting own funds and bringing the project at Plinth level requires huge funds. Small builders who operates on think margin and put their own funds for land and permission are very few. RERA will eliminate such small builders in long run. It will be only corporate who will survive because they will be having ready available funds from capital market.

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