Monthly Corporate Real Estate Regulatory Authority (RERA) Bulletin for August, 2022

RERA was passed by the Parliament last year and the Union Ministry of Housing and Urban Poverty Alleviation had given all the States and Union -Territories time till 1st May 2017 to make all the operational rules, set the institutional infrastructure and notify rules for the functioning of the regulator. In addition to this, all the developers and real estate agents/brokers have been given time until 31st July 2017 to have their ongoing projects registered with RERA. However, this can be done provided states have the rules, a regulator and a website up and running by then.

Ever since its implementation, we have seen several States adopt the law and notify corresponding Rules alongside the Act. The State of West Bengal in particular announced their own law namely – West Bengal Housing Industry Regulation Act (HIRA) which was struck down by the Supreme Court as unconstitutional. Ever since then, West Bengal has brought Real Estate Regulation Act, but are yet to enforce the same in their State.

What has been observed is, while the intentions of the Central Government have been clear in advancing benefit to the housing industry consumers, the State Governments, have not been able to carry forward this duty in full letter and spirit. Some Governments are yet to notify the Rules, or establish an authority. Some State Governments have brought the law, but are not enforcing the same. The builders in several states are using the loopholes to exploit the law, and the law being newly introduced, consists some grey areas as well which are open to misunderstanding and confusion. The Courts have been at the forefront to advance remedy to the aggrieved and distressed consumers, but it will still take time for the law to take full shape for which it has been brought for.

Monthly Corporate RERA Bulletin

Haryana RERA asks 17 Builders to Refund Rs. 50 Crores to Homebuyers

 Haryana real estate regulator RERA has ordered 17 builders to refund a total of Rs 50 crore for not delivering housing units on time to homebuyers of various under construction projects.

The Haryana Real Estate Regulatory Authority (HRERA) has issued multiple orders pertaining to 17 builders directing them to refund homebuyers’ money along with interest at the rate of 9.70 per cent within 90 days. The refunds, the orders say, be paid keeping allottees’ right to seek compensation and the expenses involved in legal proceedings.

The RERA orders have come in the wake of a number of complaints from city-based homebuyers who had moved to RERA for refunds after the builders failed to give possession of their housing units within the stipulated time period.

RERA chairman KK Khandelwal said, “The authority has ordered to refund deposited amounts to homebuyers after hearing both the parties – builders and allottee – and on finding builders guilty for non-delivery of units as per builder-buyer agreements.”

 “The builders failed to complete the projects and deliver the promised units to homebuyers within stipulated time even after collecting good initial amounts,” added Khandelwal.

In July, nearly 300 matters were listed before the authority for adjudication. In 63 cases, the authority ordered refunds with interest at the rate of 9.70%. These adjudications pertain to seventeen builders and the refund amount is close to Rs 50 crore.

Raheja Developers alone has to refund close to Rs 12 crore to eleven homebuyers, of which one refund is of Rs 2.35 crore.

In another 15 matters, the authority ordered refunds after deduction of 10 per cent earnest money. In all 300 matters, the homebuyers largely wanted refunds, and that shows the callous attitude of promoters, the authority observed.

“Complainant wanted authority to direct respondent builders to refund their deposited amount with the interest from the respective dates of deposit till the date of refund,” reads an order while adjudicating matter of a complainant Ritu Gupta v. Raheja Developers on July 12.

Deciding on Gupta’s matter, the authority directed Raheja Developers to refund Rs. 29,88,092

  • the amount she had deposited with the builder in two parts at the time of booking in December 2013 a unit in an upcoming project Raheja Navodaya at Sector 92/95 in

The authority also ordered refunds of nearly Rs 6.81 crore while deciding on a bunch of complaints filed by a number of buyers against promoters Samyak Projects, Vatika, CHD Developers, DSS Buildtech and Experion Developers.

Delhi-RERA asks DDA to get Real Estate Projects Registered

 Delhi-RERA chairman Anand Kumar has informed that the Delhi Development Authority (DDA) must register its real estate projects with the regulator for protecting the interest of property buyers in the national capital.

Speaking at an interactive session organised by CII-Delhi State Sub-Committee on Real Estate in association with India Sotheby’s International Realty on Tuesday evening, Kumar said that the authority has power to take action under sections 59 and 61 of the Act against those who fail to do so.

“People who is into the real estate development sector whether it is DDA or Delhi State Industrial and Infrastructure Development Corporation (DSIIDC) or any other development organisation, if they are doing plotted development or if they are doing real estate projects, as per section 3, they must get registered with us,” Kumar said.

“We have given our orders and judgement asking DDA to register with us, following which

DDA has gone and appealed against our order,” he informed.

Kumar also asserted that the DDA will ultimately sell flats to consumers even if it is developing projects from its own fund. “After completing the building, they (DDA) are going to sell these flats to the end consumers. If DDA delays the project, if the cost escalates, who is going to suffer, the buyer. So, keeping this thing in mind and moreover anybody who hands over a building or apartment or etc, he is responsible to maintain the quality for 5 years, as per the RERA Act,” he said.

Considering these factors, Kumar reaffirmed that the DDA must register all their real estate projects with the Delhi-RERA. “So, we have said so in very clear terms and our order is on the website. The development authorities must own it up, own up their responsibilities,” he asserted. “We will urge the government to make the completion certificate a must at the time of property registration, this is very important,” said Kumar.

Further, the Delhi-RERA Chairman also highlighted the latest amendment made in the Act regarding mandatory registration of the project. “It is now mandatory for builders to register projects with RERA where plot area exceeds 500 square metres, regardless of the number of units constructed on it. Similarly, irrespective of the plot size, if the number of units to be constructed on the plot is eight or more, it should get registered,” said Kumar.

Meanwhile, India Sotheby’s International Realty CEO Amit Goyal hoped that the same gets adopted by all developers working in the Delhi market. “This is a critical move to protect the consumer and end home buyer,” he added.

 RERA Completion Plan for stuck Ghaziabad Housing Project

 To protect the interests of the allottees of Ghaziabad-based Utopia Estate housing project, the Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has given the developer time till December 2023 to complete the same. This was after the developer and over 50% of the homebuyers together approached the regulator with a plea to allow work on the project in Dundahera.

The project commenced in December 2016 and after mandatory extensions under the RERA Act and pandemic relaxations, it was to be completed by March 2022. But the developer — M/s Sai Adhiraj Land and Promoters Pvt Ltd — failed to complete the project. Only 40% of the work has been completed in the project to date, as per the UP-RERA’s inspection report.

A RERA official told, “After the developer and over 50% of the investors approached the regulator, an inspection of the project by our project management division concluded that the project is only 40% complete. The developer was asked to submit a completion plan, encompassing details of cash flow and timeline. Our project management division scrutinised the plan and gave the go-ahead as per the provisions of the RERA Act.”

As per the estimate, Rs 65 crore can be raised from the unsold units of the project and Rs

8.14 crore is due from the existing allottees and further a sum of Rs. 4.14 crore can be raised through the sale of parking areas. Thus, the total cash flow in the project is Rs 77.28 crore while the estimated cost to complete it is about Rs 35.47 crore.

As per terms laid by the Authority, the project will have to be completed by December 2023 and the developer has to deposit Rs 3 crore upfront within three months. “Moreover, the

progress of the project will be monitored by the project advisory and monitoring committee of UP-RERA,” the official said.

Tarun Raghav, a spokesperson for the developer, said, “Our project is being developed in Ansal Aquapolis Integrated Township and the land parcel for the same was acquired from the Ansal group in 2015. We had planned a 22-storey building, but so far, we have only managed to construct 11 storeys. Of 184 units planned, only 48 units have been sold and the delay is attributed to the pandemic-induced restrictions and other factors. However, we are confident that we can complete the project and the homebuyers have also reposed trust in us,” he added.

  RERA Registration of at least 21 Affordable Housing Government Projects in Maharashtra Lapses

 Over 4,500 real estate projects registered with the Maharashtra Real Estate Regulatory Authority (MahaRERA) have lapsed as their completion deadline has expired. The list, accessed by Moneycontrol, shows at least 21 of the projects are being constructed by government agencies. These 21 projects are being developed under the affordable housing scheme of the Maharashtra government as well as the Central government’s flagship Pradhan Mantri Awas Yojana (PMAY) scheme.

The projects are located in cities such as Mumbai, Pune, Nagpur and Aurangabad. Several PMAY projects have also lapsed in the tier-3 town of Amravati. The list comprises of projects whose registration lapsed between 2017 and 2022 (up to March).

Every real estate project that is registered by a developer with MahaRERA is given three to four years — considered a reasonable period — for completion. After completion, a registration number is issued for the project.

However, a project is termed as ‘lapsed’ when the timeline given for completion is not met and the developer has not applied for extension. Once the registration of a project is declared ‘lapsed’, the developer cannot advertise, market, book, sell or offer to sell, or invite persons to invest in these projects. Such projects cannot be registered by the registrar of the revenue department.

According to the list on the MahaRERA website, of the 21 government projects with lapsed registrations, six are being constructed by the Amravati Municipal Corporation, while the rest are being constructed by several boards of the Maharashtra State Housing and Area Development Authority (MHADA). Mumbai has the highest number – eight of lapsed government projects being constructed.

These projects are in areas around Goregaon, Wadala, Powai, Malad and Borivali. Six projects are in Amravati district, and three are in Pune district, while Jalgaon, Aurangabad, Nagpur and the Kalyan area of the Mumbai Metropolitan Region (MMR) have one each.

According to officials, there are no allottees or buyers involved in these projects given that government agencies take bookings after an occupation certificate (OC) is issued by the local authorities.

“I am aware of one project that is not fully completed. We are going to communicate regarding it with MahaRERA. The only pending thing is OC in this project as we have not got a water connection yet and some road work is pending due to which the OC is stuck. It will be resolved in the coming months and homes from this project will also be sold in the upcoming lotteries of affordable homes,” said Nitin Mahajan, Chief Officer of MHADA’s Konkan Board.

A senior MahaRERA official told: “In the case of real estate projects of government agencies that have lapsed, there is no suffering for any homebuyers. This is because booking happens only after the OC is received, and hence they are not a worry. We will handle them separately.”

 Starting July 25, MahaRERA will issue suo-motu notices to developers of lapsed real estate projects in Maharashtra, most of which are in Pune and Mumbai. Initially, projects where the developer has 50% or more bookings but there is zero work on the ground will get notices.

Out of the total 21 projects that have lapsed, 11 were registered as ongoing projects when RERA came into existence in May 2017, while the remaining 10 were registered as new projects. The list of new projects that have lapsed are all from 2021 and 2022. Registration of the remaining 11 projects lapsed between 2017 and 2020.

  State Government seeks Odisha RERA Help to Bring Changes to Real Estate Rules

The State government has sought recommendations from the Odisha Real Estate Regulatory Authority (ORERA) to bring necessary modifications to the agreement for sale provision under Odisha Real Estate (Regulation and Development) Rules-2017 in conformity with the RERA Act and its rules.

The government move comes following the order of the Orissa High Court in this regard on June 22. As per the HC order, the State government will also re-examine and bring necessary changes to the format of the ‘agreement of sale’ in the rules in line with the RERA Act.

Accordingly, the Housing and Urban Development department has sought recommendations from ORERA in this regard. Sources said necessary amendments are required to remove the difficulties in the existing ‘agreement to sell’ provision prescribed in the ORE (R&D) Rules 2017 which has led to non-registration of the sale agreement by the Inspector General of Registration (IGR).

RERA activists said no clause in the agreement to sale should allow any part of the ‘common area’ to be with builder or even booked or sold to individual buyer as the entire land as well as common area of a project is required to be registered in the name of the ‘Association of Allottees’ formed under the Act. The agreement to sell also must clearly mention the ‘saleability of Covered Parking’, a tabular format for price breakup, cost of the land, share of land and common areas as well as transaction relating to carpet area.

RERA CASE LAWS

1. Jaypee Kalypso Court: How Buyers Used RERA Law to Get A Disputed Realty Project Completed In Noida Within Two Years

Four towers were completed in two years after the authority devised a mediation plan between the builder and buyers who ended up working in tandem.

After years of being embroiled in litigation related to the disputed Kalypso Court, a high-rise in Noida Sector 128, the belligerent sides—its developer and buyers—recently wrapped up the project together, emerging as an example for several such conflicts across India.

The credit for its completion majorly goes to the Uttar Pradesh Real Estate Regulatory Authority (UP RERA) for devising a one-of-its-kind model of mediation and conciliation which brought the two warring parties to the negotiation table and resolved a decade-long deadlock together in about two years.

Launched in 2008 by Jaiprakash Associates, the flagship company of conglomerate Jaypee Group, Kalypso Court had started off as a project with 15 towers. Seven were completed and handed over to the buyers before the Real Estate (Regulation and Development) Act was implemented in 2016. The remaining eight were left incomplete.

Source of the information: Click Here

 2.  Aftab Singh v. Emaar MGF Land Limited & Anr.

In this case there was a dispute that if the suits falls under RERA, can a consumer complaint also be filed against the builder?

 The facts of the case are as follows, here the builder promised to build villas and to make them available for delivery within a stipulated time, however he failed in this regard.

After which he filed an application under Arbitration and Conciliation Act, 1996 to ask the judicial authority to refer parties to arbitration as the agreement between the buyers and the builders had a arbitration clause in the main agreement.

Subsequently, a consumer complaint was filed in the forum against the builder, but he contended that the forum does not have jurisdiction to try the case as the matter is already pending under a different statue and different authority.

The Hon’ble court held that the Consumer Protection Act, acts as a supplement to another statue and not to suppress the right given in another statute.

The forum under the act is not to be considered as a civil court. Just because an alternate remedy is available to consumer under a statute it cannot stop him from approaching the forum. Although there are provisions of RERA expressly for protection of Developers and Builders and also for protecting the rights of buyers in regards to substantial compensation but all this does not curtail the right or limit it for instance.

3.  SC seeks report on medical condition of ex-CMD of Amrapali Group

The Supreme Court on Thursday sought a status report on the medical condition of Anil Kumar Sharma, ex-CMD of Amrapali Group of Companies, who is lodged in jail and is seeking bail citing his deteriorating health.

A bench of Justices U U Lalit and Bela M Trivedi told Additional Solicitor General Aishwarya Bhati to file a status report by August 6 and posted the matter for hearing on August 8.

“Considering the averments made in the petition, Bhati has fairly accepted that a status report shall be filed on or before Saturday (August 6) indicating the present medical condition and the line of treatment suggested to be adopted by the medical professionals,” the bench said while issuing notice to the probe agencies on the plea.

On June 9, the apex court allowed Sharma’s surgery to be conducted at the All India Institute of Medical Sciences (AIIMS) for the repair of a “bilateral inguinal hernia” within a week.

On March 21, the top court refused to order the transfer and clubbing of over 80 criminal cases lodged by the home buyers against directors and other officials of Amrapali group firms, saying it would not “queer the pitch” and make life difficult for…

The apex court, in its July 23, 2019 verdict, had cracked the whip on errant builders for breaching the trust reposed by the home buyers and ordered the cancellation of registration of Amrapali Group under real estate law RERA and ousted it from prim…

The top court had directed:

a probe by the Enforcement Directorate (ED) into the alleged money laundering by realtors, providing relief to over 42,000 home buyers of Amrapali Group with the verdict.

Compliances under RERA

RERA registration is just a start of RERA compliances of various provision of RERA regulations. It gives complete details of the project to RERA authority and public at large which would try to ensure that all compliances are met. Some of the compliance for builders are as under:

  • Uploading of Agreement / Plan / Approval etc. RERA regulation has mandated to publish the details along-with copy of agreements, approvals , on website of RERA Authority for general public viewing purpose.
  • Quarterly Updating with RERA – Every registered project shall update the prescribed details regarding the project on the website of the respective State RERA authority. Failure to do so may attract heavy penalty and penal proceeding from RERA
  • Separate Bank Accounts for 70% of Receipts – As per the RERA law, every developer is required to deposit 70% of the receipts from the customers in a separate RERA designated account which shall be used only for cost the
  • Comply with Prescribed Process of Booking and Allotment – RERA regulations have prescribed certain obligations and responsibilities on the developers while booking the new flat or allotment, some of them are:
    • Ensure that transaction is done through RERA registered agent
    • Making available the approved plan to the buyer
    • Non-acceptance of advance more than 10% of unit cost
  • Taking Necessary Approval and Insurance – As per RERA regulation, the builder or developer is required to take all the necessary approvals and insurance, as required by State RERA regulations relating to insurance are very confusing and shall require detailed research.
  • Formation of Allottee’s Association – As per RERA regulations, every builder or developer shall form the society/association or co-operative society as prescribed by

respective State Government. If nothing is specifically provided by State Government, then society shall be constituted within 3 months from the month in which majority flats are sold.

  • Timely Completion and Delivery Including Common Areas – Every builder/association is required to complete the project on given time and give possession within 3 months. All the common areas shall be transferred to association of the
  • Review of Building Quality – The developer need to review the quality of building. As per RERA law, any defects in the structure shall be rectified by the builder within 30 days of intimation without any additional cost.

Project Account (70:30 Rule)

  •  Developers are required to deposit 70% of project funds in a designated bank account. Of the total collections, only 30% can be withdrawn / used without any restriction.
  • In the event where the estimated receivables of the ongoing project are less than the estimated cost of completion of the project, then 100% of the amount to be realized from the allottees shall be deposited in the said separate
  • Withdrawal from the RERA Account to be certified by Engineer, Architect, and Chartered
  • Withdrawals from the RERA Account to be in proportion to the percentage completion
  • Withdrawals from the RERA Account can be made for the purpose of payment of construction and land cost of that project only.

Amount in RERA designated account cannot be used for Admin and Marketing expenses.

Interpretation Section

Section 8 of RERA Act, 2016 empowers authorities to hand over the completion of a project to a buyers’ association

The Real Estate (Regulation and Development) Act, 2016 states: “Upon lapse of registration or on the revocation of registration under this Act, the Authority may consult the appropriate government to take such action as it may deem fit including the carrying out of the remaining development works by a competent authority or by the association of allottees or in any other manner, as may be determined by the Authority.”

Provided that no direction, decision or order of the Authority under this section shall take effect until the expiry of the period of appeal provided under the provisions of this Act:

It adds: “Provided further that in case of revocation of registration of a project under this Act, the association of allottees shall have the first right of refusal for carrying out of the remaining development works.”

Section 8 of the RERA Act also comes into force in the event of the RERA registration lapsing. The authority can initiate the process of getting the remaining work completed. The first right of refusal in the process is with the association of allottees.

  • RERA – Corporate Dose
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Corporate Update

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1

MahaRERA to start issuing notices to ‘lapsed’ projects from this month

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has declared 4,555 realty projects as “lapsed”. In the first phase, MahaRERA will issue notices to developers registered with various developers’ bodies, followed by those nearing construction.

In the five years ending June 22, 2022, the MahaRERA has registered over 36,000 projects worth Rs8.69 lakh crore. Of these, over 12% or 4,555 project registrations have lapsed. The amount involving these

projects runs up Rs78,000 crore.

 

 

 

Click Here

 

 

 

 

2

UP RERA allows more time to promoter to complete covid-hit project in Ghaziabad

The RERA noted hat work on Utopia Estate commenced in April 2016 but could not be completed by promoter M/s Sai Adhiraj Land & Promoters Pvt Ltd within the stipulated time which ended on March 28, 2022, according to an official statement.

The Uttar Pradesh RERA has extended till December 2023 the completion time of a pandemic-hit group housing project in Ghaziabad which was expected to be ready in 2022, officials said on Monday.

 

 

 

 

Click Here

 

 

 

3

State government seeks Odisha RERA help to bring changes to real estate rules

The State government has sought recommendations from the Odisha Real Estate Regulatory Authority (ORERA) to bring necessary modifications to the agreement for sale provision under Odisha Real Estate (Regulation and Development) Rules-2017 in conformity with the RERA Act and its rules.

The government move comes following the order of the Orissa High Court in this regard on June 22. As per the HC order, the State government will also re-examine and bring necessary changes to the format of the ‘agreement of sale’ in the rules in line with the RERA act. The agreement to sell also must clearly mention the ‘saleability of Covered Parking’, a tabular format for price breakup, cost of the land, share of land and common areas as well as transaction relating to carpet

area.

 

 

 

Click Here

 

 

 

 

 

 

4

UP RERA extends construction deadline for Utopia Estate to December 2023

According to a formal statement, the RERA noted that construction on Utopia Estate began in April 2016 but was unable to be finished by the promoter M/s Sai Adhiraj Land & Promoters Pvt Ltd within the allotted period, which concluded on March 28, 2022.

A group housing project in Ghaziabad that was affected by the pandemic and was supposed to be finished in 2022 has had its completion date extended by the Uttar Pradesh Real Estate Regulatory Authority (RERA) until December 2023, according to officials.

In accordance with the approval (95%) given by the association of the allottees, it has authorized the promoter to carry out the completion of

the project’s remaining development and construction work in a time- bound manner and to finish it by December 2023.

 

 

 

 

 

 

Click Here

  • Disclaimer:

The content of this article is intended to provide a general guide to the subject matter. Every effort has been made to keep the information cited in this article error-free. Suggestions and feedback to improve the task are welcome. The article and opinions therein are based on my understanding of the law and provisions prevailing as on date.

The contents of this article are for information purposes only and does not constitute an advice or a legal opinion and are personal views of the author. The opinion may vary according to one’s interpretation of the law. It should not be relied upon as the sole basis for any decision which may affect you or your business. The authors can be approached at csrajatagrawal@gmail.com or cslalitrajput@gmail.com.

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