The rules and regulation of RERA pertaining to the state of Uttar Pradesh were notified on October 27, 2016. UP RERA’s site was launched on 26th July 2017 which provides instant registration of real estate projects along with the details of the registered projects. As of 1st August 2017, 1725 projects have been registred under UP portal. The various nuances of UP RERA are as follows: –
- Comprehensive details about the projects as well as the companies have to be presented by the developer for enrolling their ongoing and upcoming projects with UP RERA.
- The registration charges for residential projects are Rs 20 per meter for area less than 1000 square meter and Rs 500 per 100 meter for area exceeding 1000 square meter.
- For commercial projects having area less than 1000 square meter, the fee is Rs10 per meter and Rs1000 per 100 meter for area more than 1000 square meter.
- Developers have to maintain 70% of proceeds collected from the customers in a seprate bank account. Funds can be widhrawn proportionally from this account after obtaining certificates from engineer, architect and charted accountant as per the completion status of that project.
- Within seven days from the end of every quater, developers have to upload information about the number of apartments or plots sold along with the status on construction and approvals.
- In case of non compliance by the developer with UP RERA, retribution in terms of imprisonment for a maximum period of 3 years or fine of maximum 10% of the project cost for 3 years would be applicable. Same punishment is pertinent if the developer does not follow orders as well as decisions of the appellate tribunal.
- Defect liablilty period defined under UP RERA is same as that of other RERAs i.e. 5 years.
- It is mandatory on part of the developers to disclose the carpet area while offering to sell an apartment to a customer. The carpet area has to be re-calculated after the construction of the apartment.
- Even real estate agents have to register themselves with RERA. The registration charges for the same are – Rs 25,000 for individuals and Rs 2,50,000 for anyone other than an individual.
- After getting the registration done, real estate agents can continue to operate in accordance with RERA for a period of 10 years only.
- Also, imprisionment for up to a period of 1 year or fine of maximum 10% of the project cost of the apartment or plot would be applicable to customers and agents, if they do not comply with the rules and regulations of UP RERA.
UP RERA primarily aims to bring trust and transparency among various market participants of the real estate market. Hence, many of the provisions of the UP RERA are articulated to achieve this imperative goal of organizing the real estate sector. Details on the payment schedule and interest charged on late payments are yet to be notified by the government.
Likewise Haryana RERA, UP RERA also exempts projects that have applied for completion certificate from the definition of ‘on going’ projects, permitting these projects to not enrol with RERA. On the other hand, if these projects do not get their completion certificate they need to be registered with UP RERA. Furthermore, projects that have sold off 60% of their total offerings are also exempted from registration, leading to increased number of projects falling outside the purview of UP RERA.
Formation of a level playing field can be expected as sellers have to provide accurate information about their projects. Hence, a positive outlook of UP real estate market can be expected in a medium to long term.