In order to escalate the responsibility and accountability towards consumers the RERA has mandated real estate developers (also known as real estate promoters) to register the project (measuring more than 500 square meters or more than eight apartments) and obtain a valid registration number before proceeding. He/she is not permitted to market, advertise or sell the units before the registration of the project. If the project is to be developed in phases then the developer have to obtain registration for each phase separately.
The developer is required to submit all the necessary documents related to the project as prescribed by RERA. It is mandatory for a real estate developer to open an escrow account in a bank recognized by the government and must deposit 70% of the total payment received from the consumer. He/she can withdraw the money and should solely use it for the development of the said project after getting it approved from an engineer, architect or chartered accountant.
If the developer fails to comply with the directions or violates the rules prescribed by RERA or the Appellate Tribunal then, he/she may face imprisonment up to three years with a fine of up to 10% of the total estimated cost of the project in question.
RERA Guidelines for Builders
- Before buying the plot, promoter/developer/builder must do the background check of the seller and the land.
- Do the market study, cost & profit analysis, risk analysis and financial study before planning a project.
- Enrol trustworthy investor or investing company and keep yourself updated with the trending stakes to get best finance deals.
- Appoint competitive professionals which include sales executives, property specialist accountant, contractors, architects, engineers, surveyors and more.
- Appoint a reputed project management company or a trustworthy project engineer to guide you in you in developing the project.
- Obtain all the necessary approvals, sanctions, NOCs etc. to be on a safer side.
- Do a survey on existing properties, upcoming properties, competitors’ projects & prices, survey in the area where you are going to develop the project.
- Price your property right and appoint recognized real estate agents for a flawless marketing of your property.
- Avoid diverting funds received for the said project. It will delay the project and will hamper your reputation
- Develop a proper floor plan and share all the required details with buyers.
- Avoid making false promises and cutthroat business attitude.
- Fulfill what you had committed while selling the units.