Overview of RERA
The Real Estate (Regulation and Development) Act, 2016 (RERA), enforced on May 1, 2016, was a landmark legislation enacted by the Parliament of India to bring about much-needed reforms in the real estate sector. In accordance with Section 20 of RERA, the Jammu & Kashmir Real Estate Regulatory Authority (JKRERA) was established and began functioning properly from the mid of year 2024. JKRERA aims to promote transparency, accountability, and efficiency in the real estate sector in Jammu & Kashmir. The official portal, (https://rera.jk.gov.in), provides a resource for all stakeholders.
The Act shall aimto protect consumer interests, establish an adjudicatory mechanism for speedy dispute redressal, and set up an Appellate Tribunal to hear appeals from the decisions, directions, or orders of the Real Estate Regulatory Authority and the adjudicating officer. This comprehensive article delves into the Act’s provisions, its significance, and its impact, with a focus on Jammu & Kashmir.
Registration of Real Estate Projects by Promoter
All real estate projects with a land area exceeding 500 square meters or involving more than eight apartments must be registered with RERA before any advertisement, marketing, booking, selling, or inviting buyers.Exemptions also include projects involving renovation, repair, or redevelopment that do not entail new sales or allotments.
Promoters must submit a comprehensive application for registration to JKRERA, including:
- Details of the enterprise and the promoter.
- Information on projects launched in the last five years.
- Authenticated copies of approvals and commencement certificates.
- Sanctioned plans, layout plans, and project specifications.
- Development plans and proposed facilities.
- Clear demarcation of the project location.
- Details of real estate agents, contractors, architects, structural engineers, and other professionals involved.
- Specifications of the apartments.
- Proforma of the allotment letter, agreement of sale, and conveyance deed.
- A declaration supported by an affidavit confirming:
- Legal title over the land.
- Land free from encumbrances.
- Commitment to complete the project within a specified time.
- 70% of buyer’s funds to be deposited in a separate escrow account.
If any person fails to register real estate project with the Regulatory Authority, he shall be liable to a penalty which may extend to 10% of the estimated cost of the real estate project as determined by the authority. If the promoter fails to follow RERA’s orders, they’re liable to pay a penalty up to 5% of the evaluated cost of the property.
The registration of the Real Estate Authority may be revoked if the promotor engages in any unfair method or unfair or deceptive practice. However, no registration shall be revoked without giving the promotor a thirty days’ notice, in writing, stating the grounds on which such registration is proposed to be revoked. Any person aggrieved by the decision or order of the authority can prefer an appeal before the Real Estate Appellate Authority within 60 days from the date such decision or order is passed.
If the Appellate Tribunal’s orders are not complied with, the offender is liable to imprisonment not exceeding 3 years or with fine up to 10% of the approximate cost of the project or with both. For the matter which comes before RERA or the Appellate tribunal, no civil court has the jurisdiction to try such cases or grant an in junction with regard to any action taken by RERA or tribunal.
Registration by Real Estate Agents
Agents must register with RERA to facilitate property transactions in registered projects, quoting their registration numbers in all dealings. Non-compliance results in significant penalties. No real estate agent can facilitate the sale or purchase of or act on behalf of any person to facilitate the sale or purchase of any plot, apartment or building, as the case may be, in a real estate project registered under section 3, being sold by the promoter in any planning area, without obtaining registration under the Act. Agents must apply for registration in the prescribed form, manner, and time, accompanied by the required fee and documents.RERA grants single registration for the entire Union Territory. Applications for registration as real estate agent can be rejected for non-compliance, with reasons recorded in writing, and the applicant must be given an opportunity to be heard.
Buyer and Promoter’s Rights and Remedies
- Delayed Possession: Under Section 18 of the RERA Act, if the possession of the property is delayed on the part of the promoter, a consumer can terminate the agreement and request for refund. The promoter must return the entire amount paid by the consumer with interest. The Section 18 also allows a consumer to continue with the project and claim compensation from the developer for every month of delay until the possession of property. The rate of interest payable by the developer and the format of such complaint are specified under the RERA Rules that vary from state to state. Consumers can file a complaint against the developer in case of delay in possession under Section 31 of the Act. Non-compliance leads to daily penalties, cumulatively extending up to 5% of the project cost.
Complaints regarding delays or otherwise can be filed under Section 31 of RERA with the Regulatory Authority or the adjudicating officer for any violations of the Act, rules, or regulations.Section 31 allows any aggrieved person, including home-buyers and associations, to file complaints for violations of the Act. These complaints may be against promoters, allottees, or real estate agents and must be filed within the prescribed time limits.
- Promoter’s Rights in Case of Buyer Default: If after repeated notification by the developer, the buyer doesn’t revert to pay the balance payment, as per section 19(6) of the Rera Act, a developer can file an appeal to cancel sale deed. According to Section 19(6) of the RERA Act, every allottee, who has entered into an agreement for sale of an apartment, plot or building has to make payments within the time mentioned in the agreement for sale.
Conclusion
In Jammu & Kashmir, the establishment of the Jammu & Kashmir Real Estate Regulatory Authority (JKRERA) marks a critical step toward integrating the region into India’s broader real estate regulatory framework. Despite delays in full operationalization, the potential benefits are immense. The JKRERA aims to bring transparency, efficiency, and fairness to the region’s real estate transactions, encouraging both domestic and foreign investment.
However, the interplay between RERA and Foreign Direct Investment (FDI) regulations is crucial. While FDI in the real estate sector faces certain restrictions to prevent speculative trading and ensure developmental use of investments, the clear delineation of permissible activities under the FDI policy ensures that genuine developmental projects receive the necessary support.The combined effect of RERA is poised to catalyze significant growth in Jammu & Kashmir’s real estate market. The region stands to benefit from increased investment inflows, leading to the development of modern infrastructure, residential and commercial spaces, and overall economic upliftment.
In conclusion, RERA’s implementation across India, including in Jammu & Kashmir, along with strategic FDI policies, is set to drive sustainable growth in the real estate sector. These reforms not only protect consumers but also create a conducive environment for investors, ensuring a balanced and robust development trajectory for India’s real estate market. The future of real estate in Jammu & Kashmir, backed by regulatory strength and investment opportunities, looks promising, heralding a new era of prosperity and development.
(Adv. Romaan Muneeb is Corporate Lawyer, Partner at Malik and Romaan Law Offices, J&K. And Osheeba Bashir is a Legal Intern. The authors can be reached out at: [email protected])
