By R. Hiranmai, Executive Director and Associate General Counsel, India and South East Asia
Hailed as a watershed in the development of the sector, Real Estate Regulatory Authority Bill (RERA 2016) is now applicable to all developments across India. RERA will be able to help the sector to organize better and create an enabling environment for buyers as well as sellers. But what about leases?
There are ambiguities that are confusing corporations with regards to their corporate leases. Below are a few things that one must know about RERA in the case of leasing a property.
All developments are covered under RERA
This is only partially true. While the commencement certificate and occupier certifications are needed to be created for all development, only those development/s that are intended for ‘SALE’ and are either 500 square meters (sm) or 8 units and more will be covered under RERA.
Lease Occupiers can evoke RERA
RERA is currently applicable to sale only. Lease agreements are not covered under the same. Only leases for 90+ will be considered as equivalent to sale or leases which have benefits of sale rights can be covered at the time of sale by RERA. All other leases are immune to RERA.
Real Estate agents can be held for malpractice for my lease
Real estate agencies / agents must be registered under RERA for further functioning. However, a lease deal cannot be covered under RERA, it can be covered under other practices. An agency / agent will not be liable under RERA for any fall out.
I should hold any purchase for 3-month post May 01, as I will not be able to utilize RERA under conflict
RERA is applicable from May 01, 2017, the relaxation of 3 months is only to allow the registrations of properties as well as the agencies / agents. Any sale transactions that happen will be considered under RERA under conflict .
RERA is a disciplinary act on private developments, Government undertakings will not be under the Act
RERA covers all Development Authorities or Public authorities doing any kind of construction and sales activities involving selling of buildings, premise and plots for commercial as well as residential purpose. This covers Industrial development authorities and Housing development authorities as well.
R. Hiranmai is the Executive Director and Associate General Counsel, India and South East Asia.