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RERA FAQs

What are the objects and reasons for which the Real Estate (Regulation and Development) Act 2016 has been framed?

The Real Estate Act is intended to achieve the following objectives:
  • Ensure accountability towards allottees and protect their interest.
  • Infuse transparency, ensure fair play, and reduce fraud & delays.
  • Introduce professionalism and pan-India standardization.
  • Establish symmetry of information between the promoter and allottee.
  • Imposing certain responsibilities on both promoter and allottees.
  • Establish a regulatory oversight mechanism to enforce contracts.
  • Establish fast- track dispute resolution mechanism.
  • Promote good governance in the sector which in turn would create investor confidence.

Which projects come under the purview of RERA

All the real estate projects for which Building permissions were approved on or after 01-01-2017 by the Competent Authorities viz., UDAs / DTCP / Municipal Corporations / Municipalities / Nagar Panchayats / TSIIC comes under the purview of the RERA Act & Rules except the projects where:
  • The area of land proposed to be developed does not exceed five hundred square meters.
  • The number of apartments proposed to be developed does not exceed eight inclusive of all phases.
  • 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.

Whether public bodies such as Development Authorities and Housing Boards the definition of 'promoter'?

Yes. The Act covers all private and public bodies which develop real estate projects for sale to the general public. Section 2 (zk) defines the term ‘promoter’ which includes both private and public real estate promoters. Thus, both Development Authorities and the Housing Boards, when involved in sales are covered under the Act.

If a real estate project has a land area of more than 500 sq. mts but contains less than 8 apartments. Does it still need to be registered?

Yes. Every real estate project that has a land area of more than 500 sq. mts or has more than 8 apartments needs to be registered.

If a real estate project has a land area of less than 500 Sq.mts but contains more than 8 apartments. Does it still need to be registered?

Yes. Every real estate project which has a land area of more than 500 sq. mts or has more than 8 apartments needs to be registered.

Does the advertisement include solicitation by email and SMS? Is the issuance of a prospectus considered to be a case of 'advertisement'?

As per section 2(b), which defines 'advertisement', any medium adopted in soliciting for sale would be covered under the said definition, including SMS and emails. The prospectus, which is intended for the sale of apartments in real estate projects, will also be covered.

Does the term 'allottee' include secondary sales?

As per section 2(d), an allottee includes a person who acquires the said 'apartment/plot' through transfer or sale but does not include a person to whom such plot, or apartment is given on rent. The Act doesn't include rental projects, lease/leave, and License deals.

What is the obligation of the promoter towards the return of the amount and compensation to the Allottee?

Section 18 of the Act provides for provisions as regards various situations in which the Allottee would be compensated by the promoter due to delay in completion of the project etc.

Is it mandatory for the promoter to obtain permission for the real estate project before applying for registration to TSRERA?

Yes, before applying for registration to TSRERA the Promoter / Developer should obtain all statutory permissions from the Competent Authorities.

If the Real Estate Project is not registered under the Act, what would be the implications?

The promoter is liable to a penalty that may extend up to 10% of the estimated cost of the real estate project. On continued violation, he shall be punishable with imprisonment for a term which may extend up to three years or with a fine which may extend up to a further ten percent of the estimated cost of the real estate project, or with both.

How to know whether a particular Real Estate Project is registered under TSRERA or not?

The TSRERA website would display all the registered projects. It is mandatory that the advertisement for marketing apartments in the real estate project must carry the TSRERA registration number.

Whether registration of real estate agents would be project-specific, location-specific, or individual-specific?

Real estate agents must get registered with TSRERA either as individuals or as “ other than individuals ” Promoters while applying for registration of any real estate project will have to indicate the names of registered real estate agents who will be working as agents in the said project. Names of such agents will be displayed along with other project specifications on the TSRERA website, upon registration of the project.

What are the penalties that a Real Estate Agent would face if he fails to adhere to the mandates prescribed by TSRERA?

If any real estate agent fails to register and contravenes the provisions of section 9 or section 10 of the Act, he shall be liable to a penalty of Rs.10,000/- for every day during which such default continues, which may cumulatively extend up to 5% of the cost of plot, apartment or buildings, as the case may be, of the real estate project, for which the sale or purchase has been facilitated as determined by TSRERA.

Is the promoter required to give any undertaking to TSRERA for completing his project within a specified period?

Yes, in accordance with the provisions of the Act, the promoter, while applying for registration to TSRERA, must give a declaration, supported by an affidavit, indicating the time period within which he undertakes to complete the project or phase thereof, as the case may be..

If the registration of a real estate project is revoked for any reason, how will the interest of the buyer, in such project, be protected by TSRERA?

TSRERA will act in accordance with section 8 of the Act.

In case of delay in getting possession from the promoter, will the buyer be entitled to get interest on the amount paid by him, for such a delayed period?

Yes. In accordance with the model form of agreement, if the Promoter fails to abide by the schedule for completing the project and handing over the [Apartment/Plot] to the Allottee, the Promoter agrees to pay to the Allottee, who does not intend to withdraw from the project, interest as specified in the Rule, on all the amounts paid by the Allottee, for every month of delay, till the handing over of the possession.

Will such interest payment by the promoter to the buyer be automatic or the buyer will have to approach TSRERA?

The interest payment is in accordance with the model form of agreement and hence should be automatically paid by the promoter. The buyer may file a complaint to TSRERA if the promoter fails to do so.

Is there a ceiling on the interest to be levied by the promoter in case of default in payment of any instalments by the Allottee/Buyer?

In accordance with the model form of agreement, the Allottee must pay, a rate of interest equal to the State Bank of India's highest Marginal Cost of Lending Rate plus two percent, on all the amounts which become due and payable by the Allottee to the Promoter under the terms of the Agreement from the date the said amount is payable by the Allottee(s) to the Promoter.

What are the provisions for an aggrieved person to lodge a complaint?

Section 31 of the Act and Rule 34 & 35 of Telangana Real Estate (Regulation and Development) Rules, 2017 provide for the filing of the complaint with TSRERA, by an aggrieved person who has any interest in the registered project. The aggrieved person can file an application online as per the format provided by TSRERA. It shall include the following details:
  • Registration number of the project to which the complaint pertains.
  • Particulars of the complainant and respondent.
  • Facts of the case.
  • Relief sought.
  • List of enclosures and so on.

Can a promoter or a real estate agent also file a complaint against a buyer?

Yes. An aggrieved person having any interest in the registered real estate project can file a complaint.

On what grounds can the home buyer file a complaint?

An aggrieved person may file a complaint with TSRERA for any violation or contravention of the provisions of the Act or the Rules or Regulations made there under.

Is there any time limit prescribed for the disposal of complaints?

Section 29 of the Act provides that complaints should be disposed of as expeditiously as possible but not later than sixty days from the date of filing the same. However, where it cannot be disposed of during the said period, the Real Estate Regulatory Authority is required to record its reasons for the same.

Is there any time limit prescribed for the promoter for the formation of society or any other legal entity of home buyers?

Promoter must enable the formation of a Legal Entity like Cooperative Society, Company, Association, Federation, etc. within two months from the date on which 60% of the total number of Purchasers have taken possession and the promoter has received full consideration from such Allottees.

Is there a time limit prescribed for the promoter to execute conveyance in favour of the association of buyers

Promoter shall execute a registered conveyance deed in favour of the Allottee within three months from the date of issue of the Occupancy Certificate.

How does the Act Impact Joint Promoters or joint Venture Agreements or cases of joint development with the landowner on a revenue share basis or area share basis, where the landlord and promoter are two different parties but both are beneficiaries of the sale of the project?

The Act makes both the Promoters and the landlord or any such parties which are beneficiaries of a sale of a project and receive payments from Allottees as Co-Promoters and hence liable to adhere to the provisions of the Act and Rules and Regulations made there under.

How does the promoter make an application for registration?

TSRERA will launch the online application for registration from 1st August 2018. All promoters shall make their applications through online filling in the details in the requisite forms, uploading the required documents, and paying the necessary fees.

Is it compulsory for the promoter to register the project immediately after he gets sanctioned approvals?

Promoter must register the project before he starts any form of advertising, marketing, booking, selling, offering for selling, or inviting people to purchase plots, apartments, or buildings.

Can the promoter change the completion date for ongoing projects while registering?

Yes, while registering the project, the promoter needs to give the revised date of completion which should be commensurate with the amount of development completed, and the same should be within the validity of building permission given by the Competent Authorities.

If an ongoing project is registered under TSRERA, then will the Act be applicable for the entire project, or will it be applicable only to units sold after registration?

Registration is of the Project/Phase and hence the provisions of the Act are applicable to all units of the Project/Phase.

Can an Allottee who has executed an agreement with the promoter prior to the ongoing project getting registered with the Authority, be a complainant before TSRERA?

Yes

Can the promoter change the plans of subsequent phases after registration of the 1st phase?

The Act puts an obligation on the promoter to obtain the consent of each Allottee, if he wants to change the building plans for the phase that is registered. If a subsequent phase has not been registered, the promoter can change the plans of the subsequent phases without obtaining the consent of the Allottees from current/ongoing phases. However, if the subsequent phases are also registered, consent of Allottees, of the concerned phases, would be needed as mentioned in section 14 of the Act.

If the promoter needs to change the plans of an ongoing project post-registration, will he need the consent of the pre-registration purchasers?

Yes

In the case of joint development with the landowner on a revenue share basis or area share basis, whether landowner's component could be withdrawn from the designated account of 70%?

The Act makes both the Promoters and the landowner or any such parties which are beneficiaries of a sale of a project and receive payments from Allottees, as Co- Promoters and hence liable to adhere to the provisions of the Act and Rules and Regulations made there under. The withdrawal of money would be subject to provisions of Section 4 of the Act and the Telangana Real Estate (Regulation and Development Rules, 2017 made there under.)

Whether money collected from Allottees towards stamp duty, registration, share money for society, deposits for maintenance, corpus funds, infrastructure charges, parking charges, etc., are required to be deposited in the designated bank account (70 %)?

Yes, since these are part of the project cost.

When does the promoter need to form a society, association, etc.?

The Promoter must ensure that an association of Allottees is formed within two months of 60% of the total number of Purchasers having taken possession and Promoter has received full consideration from such Allottees.

How will the Act, Rules, and Regulations affect the advertisement of projects with many phases?

A promoter would be allowed to advertise, market, book, sell or offer to sell or invite persons to purchase a plot, apartment, or building in a phase of a real estate project, only if the said phase is registered. A promoter cannot advertise, commit, or sell amenities or facilities that are in a subsequent phase that is still not registered.

What if adjoining land is purchased by the promoter? Can he continue with the same registration?

No, it must be separately registered if the said adjoining land was not a part of the project which has been registered.

What if Part OC is received for the project: is it exempt from registration?

All ongoing projects for which building permissions were approved on or after 01-01-2017 by the Competent Authorities viz., UDAs / DTCP / Municipal Corporations / Municipalities / Nagar Panchayats / TSIIC as the case may have to be registered with TSRERA.

Estimated Cost should be submitted only for the area for which approvals/plans cleared as on the date of registration of the project or it should also include costs even for the proposed future expected area to be generated? (Bearing in mind the pros and cons for the figures depending solely on estimated costs)

The estimated cost of the project which has been approved by the Competent Authorities needs to be indicated while applying for registration.

Registration: Are various certificates (Architect, Engineer, and CA) required at the time of registration?

Yes

Does the developer need to submit the certificates to Banker or retain them with him?

The original certificates have to be retained by the promoter because the same is required to be verified and audited by the statutory auditor of the promoter’s company at the end of every financial year. Copies may also have to be submitted to the concerned bank if demanded by them.

<p>Separate Bank Account: an escrow account opened with the BANK from whom loans are availed, be treated as Separate Bank Account for a TSRERA registered project.</p>

No. A separate bank account needs to be opened in accordance with the provisions of the Act and the rules made there under.

Can separate accounts be more than one since at times there might be multiple lenders in the same project (building-wise lender) though the developer might register the project at one go.

No. There should be one designated bank account for every registered project or registered phase of a project.

Sometimes the buyer is ready and gives an undertaking that he is ok to give money beyond 10% however does not want to register. Should it be allowed?

No. Section 13(1) of the Act prohibits the promoter from taking more than 10% of the cost of the apartment without entering into a written agreement for sale, duly registered.

Referral bookings: Existing customers referring to others for buying the flat in the same project or another project of the same developer: will they be treated as Real Estate Agents?

Yes, if it is against consideration. Real Estate Agent is clearly defined in section 2(zm) of the Act.

For Foreign brokers' registration and advertisement outside India, will the same rule apply as in India?

Yes, if it pertains to a registered project under TSRERA.

In case of customers default: can the developer be selective in cancelling units?

The provision of termination of the agreement is covered in the Model Form of Agreement attached to Telangana Real Estate (Regulation and Development) Rules, 2017.

Internal changes: assuming making a duplex at the customers' request: will this be treated as a Major change and require the approval of other Allottees?

Please refer to section 14 of the Act

Who needs to apply for Registration as a real estate Agent?

Every Real Estate Agent who intends to 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 registered real estate project being sold by the promoter in entire Telangana area, shall have to apply for registration to Telangana Real Este Regulatory Authority (TSRERA).

What is the procedure to obtain registration to operate as Real Estate Agent? What are the documents required to get a real estate agent's license?

It will be through an easy online process. The procedure is explained in Rules 8,9 and 10 of Telangana Real Estate (Regulation and Development) Rules 2017

What is the fee for the registration of a Real Estate Agent? What is the validity?

The registration fees are prescribed in Rule 8(2) of the Telangana Real Estate (Regulation and Development) Rules, 2017 which specifies that ten thousand rupees in case of the applicant being an individual or fifty thousand rupees in case of the applicant other than an individual the validity period is 5 years.

Will the registration of TSRERA be operated in other states?

No. The registration is valid only in Telangana State.

Is this registration transferable to another agent or to another state where agents intend to shift their office?

No

Even if the real estate agent has not taken any commission from the client and taken it from the promoter, can the agent still be responsible and liable for the builder's default?

The agent's liability is in accordance with Section 10 of the Act. He is not held liable for the promoter's default.

If the real estate agent is not listed with the promoter's registration on the TSRERA website, still can he sell in this project?

No. If the promoter has not included the real estate agent’s name at the time of registration, it will have to be included by the promoter, subsequently, and updated on the TSRERA website. The real estate agent can operate in the project only thereafter.

Will TSRERA protect Agents for their commissions not paid by the builder or by parties to the deal?

No, these will be guided by the agreements that real estate agents have with the concerned promoters or allottees.

If a real estate project has a land area of more than 500 sq. mts but contains less than 8 apartments. Does it still need to be registered?

The responsibility of the real estate agent will be in accordance with Section 10 of the Act.

What will be the penalties and fines for Real Estate Agents?

A penalty of Rs.10,000/- for every day during which may cumulatively extend up to 5% of the cost of the Plot / Apartment / Building Penalties for which the sale and purchase has been facilitated (Section 62 of the Act).

What if a promoter gives false information or documents to the real estate agent and the agent acts upon such information, will he be liable?

Under Section 12 of the Act, it is the obligation of the promoter regarding the veracity of the advertisement and prospectus. The agent is liable if he makes a false or misleading representation concerning the services that he intends to offer.

Will listing websites/newspapers/ exhibitions promoting real estate needs to take agents' license?

Yes, if they intend to 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 registered real estate project being sold by the promoter in any planning area.

Will digital media listings by builders/agents need to get approval from TSRERA?

No

Will real estate agents putting advertisements on builders' behalf need to get approved his print/radio/ TV/ other media promotions content?

No, however, no advertisement should be put out for a project unless the concerned promoter has registered the project with TSRERA. The agent should not advertise for services that are not intended to be offered.

If registration is not given within 30 days, will it be deemed registration?

Yes, if the Authority fails to issue any communication about deficiencies, within 30 days of the receipt of the application for registration.

Will a multi-state operator of a real estate agency business need to apply in all states of India?

For working as a real estate agent in Telangana, registration will be given by TSRERA

Is the Agent authorized to sign on behalf of his promoter/builder?

No
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