Introduction: The Real Estate (Regulation and Development) Act, 2016 (RERA), has been a game-changer in the Indian real estate sector, bringing transparency, accountability, and consumer protection. While RERA mandates the registration of most real estate projects, there are specific exemptions provided under the law. Two such critical exemptions pertain to the plot area and the number of apartments to be developed. In this article, we will explore these exemptions and the criteria that govern them.
1. Plot Area Should be Less than or Equal to 500 Square Meters: One of the significant exemptions from RERA registration applies to projects where the plot area is less than or equal to 500 square meters. The plot area refers to the total land area on which the real estate development is planned. If a project falls within this threshold, it is exempt from mandatory RERA registration.
Rationale Behind the Exemption: The exemption for projects with a smaller plot area aims to ease the regulatory burden on smaller developers or individual landowners who undertake relatively modest real estate projects. The idea is to provide some respite from the extensive compliance requirements of RERA for such projects, considering their limited scale and scope.
2. Number of Apartments to be Developed Should be Less than or Equal to 8: Another crucial exemption from RERA registration applies to projects where the number of apartments or units to be developed is less than or equal to 8. This exemption is irrespective of the plot area; as long as the project has 8 or fewer units, it falls under the exempt category.
Rationale Behind the Exemption: The exemption based on the number of units is similar in spirit to the plot area exemption. Smaller projects with a limited number of units are often taken up by smaller developers or individual landowners. Requiring them to register under RERA for such small-scale projects might be administratively burdensome and disproportionate to the scale of the development.
Implications of the Exemptions: While these exemptions offer some relief to smaller real estate projects, they come with certain implications:
- Limited Consumer Protection: Projects exempt from RERA registration might not provide the same level of consumer protection and transparency as registered projects, which could potentially expose buyers to higher risks.
- Greater Caution for Buyers: Homebuyers interested in projects exempt from RERA registration need to exercise extra caution and conduct due diligence to ensure the project’s legitimacy and compliance with other relevant laws.
- State Variations: It’s important to note that while these exemptions are part of RERA, each state has the authority to modify the thresholds. Thus, the plot area and the number of units allowed under the exemptions might vary from state to state.
Conclusion: RERA’s exemptions for real estate projects with a plot area less than or equal to 500 square meters and having 8 or fewer units are meant to reduce the compliance burden on smaller developers and projects. While these exemptions can provide some flexibility, it is essential for homebuyers to be aware of them and exercise caution while considering projects falling within this category. Homebuyers are advised to consult legal experts and perform thorough due diligence to ensure their investments are secure and adhere to all necessary regulatory norms.
