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Should I Buy Flat or Apartment not Registered in RERA in 2022?

Can I buy a flat if it is not registered in RERA? For having a roof over your head, you must have saw a dream and must be working very hard for that. To make this dream true, you may have already consulted many local real estate experts or relatives or friends.

You may even have looked up various guides or blog posts online, RIGHT?

But what is the first step to ensure that your hard-earned money does not falls into the wrong hands?

It is now agreeable by everyone that you must always buy or invest in a RERA registered property.

Let me give you a brief on why you should always buy or invest in RERA registered real estate project.

After reading this curative post, I am heck sure that the next time you visit a property dealer, you can give him a good smack with your clever gestures. 😉

What is RERA?

The first questions which pops up in your mind is- What is RERA?

You may have already visited many websites who have told you its definition, history and full-form. So let me just skip that!

In simple words, RERA is a law enacted to govern the Indian Real Estate Industry.

RERA or in long form- Real Estate (Regulation and Development) Act, 2016 is a power tool for all homebuyers today and believe me… No one wants to purchase a flat or house or apartment not registered in RERA today!

If you are interested to read more about RERA, read another curated post.

रेरा है तो भरोसा है- RERA is trust

What comes under RERA?

Many experts or even national news websites have claimed that they know everything about RERA.

But when you go to them with this query- What comes under RERA, they provide wrong interpretation of the RERA Act 2016.

Nearly, all expert websites have claimed that only RERA registered projects are covered by RERA Act 2016 and not the projects not registered in RERA.

Have they gone nuts?

They give example of the case– Neelkamal Realtor Suburban Vs Union of India as decided by the Hon’ble Bombay High Court. I truly admit that this is the landmark case law, but yet again, they all have wrongly interpreted the adjudication of their Hon’ble Lordships.

As per Section 2(zn) of the RERA Act 2016, every project which falls under the definition of “Real Estate Project” is covered by the Act. Nowhere it is written in the RERA Act that it covers or is applicable only on RERA registered projects.

Real Estate Project RERA

The Registration provision under the Act only provides for the registration of real estate projects. Moreover, it also provides exemptions to projects who satisfy the criteria under Section 3. Click here to read more on RERA Registration.

Its plain reading nowhere mentions that RERA Act 2016 is applicable only on RERA registered projects.

In my support, I would like to two RERA cases. In these, their Lordships have admitted that a homebuyer cannot be left helpless if the project is not registered with RERA or is exempted from the prior registration under the Act.

S.No.Case NameState/CourtLink
1U.P. Awas Evam Vikas Parishad Versus Brij Kishore Verma (Read Para 9 onwards)Uttar Pradesh/ UPREATRead Full UPREAT Order
2U.P. Awas Evam Vikas Parishad Versus Rakesh Kumar Singh (Read Para 9 onwards)Uttar Pradesh/ UPREATRead Full UPREAT Order

Hence, it is transparent clear that the RERA is applicable on all real estate projects whether registered or un-registered/ not registered in RERA.

Recommended Post- What is RERA Carpet Area?

Should I buy a property if it is not registered in RERA?

Every factor considered; the answer is a BIG NO! You should never buy a flat or apartment if its not registered in RERA.

Only Buy RERA registered property- RERA QnA-min

The only exception is to those projects who are exempted from registration under the RERA Act. These exclusions are stated below-

  • Smaller real estate projects where the area covered is 500 sq. m. or less or the number of apartments is 8 or less.
  • Those projects which are completed and have obtained the completion certificate from the competent authority prior to the commencement of the RERA Act.
  • If the builder is renovating or repairing or redeveloping the real estate project which does not involve any kind of marketing, selling, advertising or new allotment in the project.
  • Where the builder has-
    • Handed the services over to the Local Authority for maintenance.
    • Handed the common areas and facilities to the Resident’s Welfare Association for maintenance.
    • Completed all the development works and has executed the sale deed/ lease deed of more than 60% of the houses or apartments or plots.
    • Completed all the development works and applied for the completion certificate from the competent authority.

Every real estate investor or expert or lawyer these days know how RERA affects the builder. Honestly, I have seen many builders up close worrying about RERA compliances.

Can you believe that even the top-notch builders have their RERA compliance team?

A promoter or its sales associate on the project site won’t reveal that the project is not registered in RERA, but as soon as you mention it, they will go ransom in their minds!

On a bright side, every State RERA is covering or registering the unregistered real estate projects either on a complaint or itself.

Hence, it is only a formality for you to mention or ask about RERA registration from your builder.

Is it good to buy a RERA approved project?

The next question pops out of your mind, is buying a RERA approved flat or apartment is good for you?

It depends!

Are you buying a completed flat?

If yes… it is perfect!

Are you investing in a flat which is proposed to start some months later? In this case, you may have to consult local experts or lawyers to ascertain the builder’s goodwill his completion commitment. Be cautious if the builder is assuring you concerning the project not registered in RERA.

I am not saying that you should only buy a completed and RERA registered flat or apartment. You may also say that they are a ton costly when compared to the flats that are yet to be finished by the builder.

In a nutshell, buying the RERA registered property gives you the advantage of opting the short-term legal recourse. If you play your RERA card, it also gives the advantage of fast-track dispute settlement.

How do I know if my builder is RERA Registered?

Nearly every Indian State have set up their RERA portals or websites that show the status whether a builder is registered as a promoter.

What you only need to do is checking their ‘REGISTRATION’ section, and further analysing if your builder is a registered promoter in RERA or not.

Read more- Penalty for Non-registration in RERA

How do I know if a real estate project is RERA registered?

To check whether a real estate project is registered by a promoter, visit the RERA Registration section of the website. Next type the RERA registration number for the project not registered in RERA. Click OK and you will find its truth.

What happens if the RERA Registration is expired?

You may have contacted a real estate builder for purchasing a flat. But wait… you may also have checked its registration status.

The complexity arises where the RERA Registration of a real estate project has expired or lapsed.

I guarantee you that every builder will assure you that they will apply for the project extension on RERA website.

The next step that you must certainly adopt is to contact the local experts or those who have already invested in that project. They will tell you the true story.

From up close experience, I admit that only 10% promoters get successful for applying for extension.

Moreover, RERA only grants for maximum 1 year extension as per law.

So, it ultimately depends on you risk appetite and the project completion status as seen in person, whether you should consider buying a flat or apartment in a real estate project whose RERA Registration has expired.

What is RERA Extension?

As per the RERA provisions, every promoter has to register its real estate project before inviting a homebuyer or investor on RERA portal.

In most cases, the RERA registration expires. Thus, there arises the need for a promoter or builder to apply for extension of RERA registration.

rera extension by promoter- rera qna

Section 6 of the RERA Act specifically provides for extension of RERA Registration. It states that a real estate project can be granted extension in events of force majeure only and subject to fee as prescribed. Moreover, an extension granted shall not exceed more than one year.

Thus, the RERA Act has not specified the limits of RERA extension a promoter can apply for.

Is RERA Registration for a Builder or Real Estate Agent compulsory?

Before the RERA Act was passed, different State laws protected the interests of a homebuyer.

However, the tables have turned now.

Every promoter has to register himself and register his real estate project if not registered in RERA.

Same procedure goes for a real estate agent who wants to sell a flat or apartment or house.

Section 4 of the RERA Act states that a promoter can only sell, market or advertise a real estate project only if it is registered on the State RERA portal or website.

rera registration is compulsory for promoter and real estate agent

The only exceptions where a real estate project needs not be registered are stated below-

  • Smaller real estate projects where the area covered is 500 sq. m. or less or the number of apartments is 8 or less.
  • Those projects which are completed and have obtained the completion certificate from the competent authority prior to the commencement of the RERA Act.
  • If the builder is renovating or repairing or redeveloping the real estate project which does not involve any kind of marketing, selling, advertising or new allotment in the project.
  • Where the builder has-
    • Handed the services over to the Local Authority for maintenance.
    • Handed the common areas and facilities to the Resident’s Welfare Association for maintenance.
    • Completed all the development works and has executed the sale deed/ lease deed of more than 60% of the houses or apartments or plots.
    • Completed all the development works and applied for the completion certificate from the competent authority.

Recommended postRERA Penalty for providing false registration information

Conclusion

Summing up… You should buy only a RERA Registered property.

For those who are aggrieved by the actions of a builder and whose project is not registered in RERA, they must at once approach the Real Estate Regulatory Authority of their State.

This Post Has 2 Comments

  1. Vishal

    New investors can successfully invest in raw land with guidance from expert company of property counsel who’ll carry out the due industriousness on behalf of the inventor.

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