The real estate business has become a growing sector in India. Before the RERA Act of 2016, no national regulatory law was overseeing this vast sector. It aimed to advance investments in the real estate market while defending the rights of purchasers. The Act mandated that each State government establish its own RERA policy structure and equivalent administrative panel, with each State government defining how these institutions will operate.
Following the central RERA Act, the West Bengal government has passed its version of the RERA (HIRA). It has been in charge of regulating the West Bengal property market since it was established in 2017. Like the RERA Act, the HIRA Act’s primary objectives are to promote and regularise the housing industry, ensure transparent property sales, and safeguard home buyers’ interests. HIRA has some differences from RERA. The article describes how HIRA and RERA differ from each other.
What is the RERA Act?
RERA Act stands for Real Estate Development and Regulatory Act. The Indian Parliament passed the Real Estate Act in 2016. The RERA act aims to safeguard home buyers’ rights while encouraging property investment. The law became effective on May 1, 2016.
Objectives
Maintain accountability to allotters and protect their interests
Increase clarity, uphold justice, and cut down on fraud and delays
Establish professionalism and uniformity across India
Create information equality between developers and buyers
Impose equal duties on investors and builders
Crucial Agreements of the RERA Act:
The RERA Act allows state governments to set up multiple regulatory frameworks with the following functions:
Real estate project registration, management, and publication on the website for public viewing
Protection of the interests of promoters, buyers, and real estate brokers
Construction of cheap, sustainable homes
Providing guidance to the government and guarantee adherence to its rules
A project must register with the regulatory authorities if the plot size is at least 500 square metres or eight flats
If there is any default by either party, the promoter and the buyer are responsible for paying interest at specified interest rate
Without initially agreeing on a sale, a promoter is not permitted to take an advance payment or application fee of more than 10% of the land, apartment, or building price from a customer
What is the HIRA Act?
The West Bengal Housing Industry Regulation Act, often known as West Bengal HIRA, is a regulatory act established to oversee the real estate transactions of West Bengal. Similar to RERA, the main objective of this act is to safeguard the interests and address the needs of homebuyers. It also promotes a controlled and transparent housing sector trade.
Objectives
To ensure that real estate projects are constructed effectively and transparently
To provide appropriate rules for promoting and controlling the housing or real estate industry in West Bengal
To implement procedures that might end conflicts in the real estate industry
To create policies and procedures for conducting inspections, ensuring compliance, and enforcing fines for any rule violation in the real estate sector
Important Agreements of the HIRA Act
All real estate projects with more than eight flats or 500 sq.m must be registered with the Regulatory Authority
The promoter must apply to HIRA if a project is still in progress but does not meet the completion certificate requirements
Section 3 of the West Bengal Housing Industry Act declares that a real estate project must be registered with the West Bengal Housing Industry Regulatory Authority
Purchasers would be able to express their dissatisfaction through a complaints system
Real estate developers won’t be allowed to transfer unlawful transactions from one project to another
Registration Fees under HIRA and RERA acts in West Bengal
Registration Fee for Promoters
For residential projects with a proposed land area lesser than 2,000 sq. m.
Rs. 10 per sq. m.
For residential projects with a proposed land area of more than 2,000 sq. m. but less than 5,000 sq. m.
Rs. 20 per sq. m.
For residential projects, with a proposed land area of more than 5,000 sq. m.,
Rs. 30 per sq. m.
For commercial projects
Rs. 30 per sq. m.
Registration Fee for Real Estate Agents
For individual agents
Rs. 25,000
For anybody other than individual agents
Rs. 2,50,000
Other Charges for RERA
Filing an appeal
Rs. 1,000
Filing a complaint
Rs. 1,000
Differences Between RERA and HIRA Act
Parameter
RERA Act
HIRA Act
Force majeure events
RERA limits force majeure events to natural disasters that interfere with the development of real estate projects as usual.
HIRA refers to natural disasters as “any other situations as may be prescribed”.
Planning area
The planning area has been designated by the government.
There is no distinct notion of a planning area.
Power of the regulatory authority
In case of any violations, RERA permits relevant authorities to send the matter suo moto to the Competition Commission of India (CCI).
There is no such clause in HIRA.
Factors for adjudging compensation or interest
The regulating body appoints an adjudicator to determine the payment or interest on real estate.
The regulating authority makes decisions about compensation under the HIRA. The position of an adjudicating officer does not exist.
Construction materials to be used
The RERA-instituted administration has the power to advise the relevant government on the selection of building materials.
The West Bengal Housing Industry Regulatory Authority may suggest using state-provided building supplies.
Garage area
According to RERA, a garage is defined as a three-sided covered area with a roof. It doesn’t include uncovered parking spaces or open parking lots.
HIRA does not impose such limitations on the definition of parking or garage spaces.
Conclusion
From the analysis conducted by the Supreme Court of India, it was discovered that over 95% of clauses in HIRA were similar to those in RERA. West Bengal’s HIRA was inevitably declared “unconstitutional” in May 2021 for the same reason. While both acts tried to introduce equality and fairness in the real estate sector, it can be concluded that they are more or less identical. Follow Tata Capital to stay up to date on the latest real estate news. Additionally, Tata Capital also offers a variety of financing options to prospective home buyers.
21 November 2024
6 mins read
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