Understanding RERA and Its Application in Real Estate Projects in India

Builders who have completed 70% of a project are generally still covered under the Real Estate Regulation and Development Act, 2016 (RERA) in India. RERA applies to all residential real estate projects regardless of their completion percentage, ensuring the protection of homebuyers' interests.

RERA's Scope and Coverage

Under RERA, developers are required to register their projects and comply with various regulations. These regulations include ensuring timely possession, maintaining transactional transparency, and upholding quality standards. Even if a project is 70% complete, the builder must adhere to RERA guidelines to protect the interests of homebuyers. However, specific provisions and interpretations may vary by state as RERA is implemented at the state level in India. It is advisable to check with the local RERA authority for detailed information regarding a specific project.

It's crucial to note that the project itself, rather than the builder, is under RERA jurisdiction. Until the project has received the Completion/Occupancy Certificate (COC) and is handed over to the prospective owners' association, it remains under the purview of RERA, irrespective of its developmental status.

The Significance of the Completion/Occupancy Certificate

The Completion/Occupancy Certificate (COC) is a critical document in the context of RERA. Once a project obtains the COC from the relevant authorities, it signifies that the project has met the necessary standards for occupancy. This certificate is proof that the development is structurally sound and safe to be inhabited. The COC is a legal requirement for the transfer of the property to the prospective buyers and the completion of the sales process.

Upon obtaining the COC, the project is no longer considered an active RERA project. This means that the builder is no longer required to adhere to RERA's guidelines, such as transparency in transactions and ensuring quality standards as they relate to future sales and developments. However, this certificate is not a guarantee of the quality of the development; it merely ensures compliance with the structural and safety standards set by the authorities.

Compliance vs. Development Completion

RERA's primary focus is on ensuring fair practices in the real estate market and protecting buyers from unscrupulous builders. Compliance with RERA regulations is mandatory for the duration of the project, regardless of the completion percentage. Specific compliance measures include regular updates to RERA authorities, transparency in the sale process, and adherence to quality standards.

Development completion, on the other hand, refers to the physical completion of the project and the issuance of the COC. While compliance with RERA can be seen as a subset of the project development process, it is specifically enforced to safeguard the interests of homebuyers. Builders who undertake RERA registration and compliance are required to disclose potential risks, maintain a transparent account of financial transactions, and ensure compliance with quality standards. This transparency and adherence to regulations are crucial for the credibility of the builder and the integrity of the project.

State Variations and Local RERA Authorities

RERA is implemented at the state level in India, meaning that specific provisions and interpretations may vary from state to state. Local RERA authorities play a crucial role in ensuring compliance with RERA regulations. Developers are expected to collaborate with these authorities to ensure that their projects meet the necessary requirements.

It is essential for both developers and potential buyers to stay informed about the specific RERA requirements in their state. Local RERA authorities provide detailed information about project registrations, the documents required for compliance, and the steps involved in obtaining the COC. Engaging with these authorities and understanding the regulatory landscape is crucial for all parties involved in the real estate transaction.

Conclusion

While builders who have completed 70% of a project are still subject to RERA regulations, it is the project itself that is covered under RERA. The issuance of the COC marks the transition from a regulated project to a completed development. Understanding the significance of RERA, compliance requirements, and the role of local authorities can help ensure that homebuyers are protected and that the real estate market operates transparently.

For more information on RERA, compliance, and the COC process, contact your local RERA authority or seek professional advice. Staying informed is key to navigating the complexities of the real estate market in India.