RERA-2016 in Uttar Pradesh: How to start business in Real Estate Sector-brief info on promoter, Agent-Registrations-Rights of allottee-Appellate Tribunal-Violations and Penalties

The Real Estate (Regulation and development) Act, 2016, established the Real Estate Regulatory Authority(RERA), which basically works to regulate and promote real estate sector so that sale of Plot, Apartment, or Building will take place in efficient and transparent manner and at the same time protect the interest of consumers. To redress the dispute, Act established Appellate Tribunal to hear appeals. In addition to this, you will going to have a brief idea about the documents required for the registration, role and functions of a Promoter and an Agent in real estate, Fines and Penalties in case of violations, and many more things...

Lets first begin with 'Immovable Property', according to the Act, it includes Land, Buildings, or things attached to the mother Earth or permanently fastened to anything which is attached to the Earth, but not standing timber, standing crops, or grass. A 'Promoter',  means a person who construct or causes to be constructed an independent building or building consisting of Apartments, for the purpose of selling all or some of the Apartments to the other persons. Whereas, 'Real Estate Agent', is a person who negotiate or acts on behalf of one person in a transaction of transfer of his plot, apartment, of building, by way of sale, and receive remuneration or fees or any other charges foe his service whether as commission  or otherwise. Alternatively, it can be understood, a person who introduces, through any medium, prospective buyers and sellers to each other for negotiation for sale or purchase of plot, apartment, or building.

Real Estate Agents can not facilitate the sale or purchase of any plot, apartment or building, unless they obtain registration number from the designated Authority. Registration will permit an agent to deal in the entire state or the UT, it means that, he should restrict himself only to that State or UT. Every Agent must have to quote the registration number granted by the Authority in every sale facilitated by him under this Act. To avoid expiry of registration, agent must have to renew his registration by paying renewal fees to the Authority. Documents required for the registration as an Agent-Photo, Pan Card, Aadhaar Card, Bank Passbook with IFSC. The registration fees in Uttar Pradesh, 25,000 rupees (in case of individual), 2,50,000 rupees (other than individual).

To register a Real Estate Project, one will need to give a brief details of his enterprise including its Name, Registered address, type of enterprise, names and photographs of promoter in a web based online system for submitting applications for the registration of projects. There shall be no requirement of registration, where the Area of land proposed to be developed does not exceed five hundred square metres or the number of apartments proposed to be developed does not exceed eight inclusive of all phases.

Promoters should not do:

Violate any of the terms or conditions of the Act, should not indulged in any kind of unfair practice or irregularities, should not represent a particular standard or grade falsely, incorrectly represent approval whereas in actual they don't have the approval, or should not indulged in fraudulent practices.

Agents should not do:

They should not facilitate the sale or purchase of any plot, apartment, or building in a real estate projects which is not registered with RERA, should not indulged in any kind of unfair trade practices such as making statements relating to false standard of grade, making advertisements that are not intended to be offered.

Rights of Allottee:

A person will be compensated by the promoter in case, he/she has made an advance or a deposit on the basis of the information contained in the notice advertisement, or on the basis of any model apartment, plot or building and he/she sustains any loss or damage by reason of any incorrect, false statement. In addition to this, if a person intends to withdraw from the proposed project, he/she shall be returned his/her entire investment along with interest at such rate as may be prescribed. A person should not pay a sum more than 10% of the cost of apartment, plot, or building as an advance payment, without first entering into a written agreement for sale and purchase. Act also clarified, every allottee, who has entered into a agreement for sale to take an apartment, plot, or building, shall be responsible to make necessary payments in the manner and within the time as specified in the said agreement for sale.

Dispute Redressal:

The Act clearly stated that, within a period of one year from the date of coming into force of this Act, Govt shall establish an Appellate Tribunal. Any person not satisfied by the direction, decision, or order made by the RERA can file an appeal before the Appellate Tribunal. These Tribunal shall not be bound by the procedure laid down by the code of civil procedure,1908, but shall be guided by the principles of Natural Justice. All proceedings before the Tribunal shall be deemed to be judicial proceedings and also shall be deemed to be Civil Court. If a person aggrieved by the decision or order of  the Appellate Tribunal, he may file an appeal to the state High Court within a period of sixty days from the date of communication of the decision or order by the Tribunal.

Fines & Penalties:

In case, an agent or promoter, fail to register the Real Estate Project, the penalty may extend imprisonment(up to 3 years) with fine(up to 10% of the total cost of project). If an agent or promoter not register themselves in the RERA, they shall be liable to a penalty of 10,000 rupees each day during which such default continue, which may cumulatively extend up to 5% of cost of plot, apartment, or building. In case, Promoter, defy the orders of Appellate Tribunal, he shall be punished with imprisonment up to 3 years or with fine up to 10% of estimated cost of the Real Estate project, or with both. The same violation for an Agent, attracts imprisonment up to 1 years or with fines up to 10% of estimated cost of the project, or both. If an allottee defy the order of RERA or Appellate Tribunal, he/she shall attract penalty which may extend up to 5%(in case of RERA) or imprisonment up to one year with fine 10% of estimated cost of project(in case of Tribunal) respectively.