7 Things Property Brokers Must Know About Real Estate Act
It has been some time since the Real Estate (Regulation & Development) Act, 2016, came into force. While all of us are gradually making ourselves aware of the various provisions of this game-changing piece of legislation, there might still be some confusion about some of the clauses. In case you are a property broker and wondering how does the law impacts you, we answer some of the questions for you.
Does the Act cover real estate brokers/agents?
The law covers all the agencies and professionals involved in sale and purchase of property as a business. It also includes online portals engaged in selling properties.
All the above-mentioned parties must register under the state Real Estate Regulatory Authority (RERA) concerned to conduct real estate businesses. The Act clearly stipulates the mechanism for registration along with all the details such as registration fee payable, period of registration, subsequent renewal, etc.
Are there any penalties in case a broker/agent does not register under the Act?
Yes, there are heavy penalties if a real estate agent fails to register himself with the Authority. The Act enforces penalty of Rs 10,000 per day of default, which may cumulatively extend up to five per cent of the cost of the property for which the sale has been facilitated by him
Does it cover ongoing projects?
The Act does not classify between ongoing and future projects. As per the Act, all ongoing projects which have not received completion certificate will need to register their project with the RERA.
Are commercial projects under the ambit?
Yes, both residential as well as commercial projects fall under the ambit of RERA. Section 2(e) of RERA Uttar Pradesh, for instance, defines 'building' which includes both residential and commercial real estate.
Which types of projects are exempted?
The following projects do not fall under the purview of the Act:
- where the area of land proposed to be developed does not exceed 500 square metre or the number of apartments proposed to be developed does not exceed eight, inclusive of all phases.
- where the promoter has received a completion certificate for a real estate project prior to the commencement of this Act.
- for the purpose of renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project.
Does the Act cover secondary sales?
Yes, all property transactions executed through sale or transfer agreement will be covered under the Act.
What's the difference between completion certificate and occupancy certificate?
A project gets a completion certificate when a municipal corporation certifies that the project has been developed in compliance with the sanctioned plan, layout plan and all other specifications stated by the government.
An occupancy certificate is given to a developer when his project has got all the provisions related to civic infrastructure and is inhabitable. This includes water, sanitation and electricity.
Also read: Is RERA Bad News For Brokers?