Monthly Corporate Real Estate Regulatory Authority (RERA) Bulletin for January, 2023

Monthly Corporate RERA Bulletin-

Five years after RERA, TS failed to appoint appellate tribunal

While the Centre passed the Real Estate (Regulation and Development) Act, 2016 to regulate and promote the real estate industry the state government has failed to appoint a regulatory authority and an appellate tribunal since five years, in violation of the Real Estate Regulatory Authority (RERA) and putting buyers and sellers at risk.

The RERA was established to safeguard consumer interests and ensure that real estate projects were sold in a responsible and transparent manner. According to Section 20 (1) of the Act, the state government must establish a RERA with a chairperson and at least two members within a year of the Act coming into force.

Additionally, pending the establishment of the authority, the state government should designate an officer of the rank of secretary as a stopgap measure. The Telangana government designated the special chief secretary, revenue, as the regulatory authority by GO No. 6 dated January 11, 2018.

The activist claimed that there were allegations that middlemen are acting as agents to obtain permission due to unusual delays in processing applications under the RERA, and that there was widespread corruption in processing of pending applications. He emphasised that the Act’s intent was being defeated by the absence of a regulatory authority and appealed to Chief Minister K. Chandrashekar Rao to take action to create the RERA and appellate tribunal to safeguard consumer interests and to expeditiously resolve disputes.

Floor-wise registry banned: Punjab RERA told to cancel licences of defaulting promoters

RERA has also been asked not to register properties that have been sold as individual dwelling units, though the permission procured by the promoter was to sell multi-storeyed property as one unit.

After banning registration of individual floors in multi-storey residential buildings built with permission for a single house, the Punjab local bodies department has asked the state’s Real Estate Regulatory Authority (RERA) to identify the defaulting promoters and cancel their licences.

A communication issued by the department’s senior town planner said it had come to the notice of the government that certain promoters and developers after obtaining a licence to develop a colony under the Punjab Apartment and Property Regulation Act or getting approval for a town planning scheme under the Punjab Municipal Act, 1911, or Punjab Municipal Corporation Act, 1976, or obtaining a regularisation certificate under the provisions of policy of 2018 regarding regularisation of unauthorised colonies get individual residential building plans sanctioned for either stilt plus three or ground floor plus two as per the municipal building bylaws, but sell them on floor-to-floor basis as independent floors.

The department has also conveyed to RERA that the practice of selling dwelling units on floor-to-floor basis as independent floors by getting individual residential building plans sanctioned for either stilt plus three floor and ground plus two floors on the one hand leads to non-compoundable violations in the building and on the other hand caused financial loss to the urban local bodies.

Source: Click Here

Haryana RERA imposes penalty of Rs 25 lakh each on 5 builders for not completing projects on time

The Gurugram bench of Haryana Real Estate Regulatory Authority (RERA) fined five builders with penalties of Rs 25 lakh each for failing to complete their projects within their declared timelines, a statement from the real estate regulator said on December 22.

According to the statement, the real estate regulator, however, allowed the realtors’ RERA registration certificates to remain in force with new timelines.

The real estate builders that have been fined include Identity Buildtech Private Limited, BPTP Limited, Advance India Projects Limited, KLJ Realtech Private Limited and Spaze Towers Private Limited, added the statement.

There was no immediate response available from builders that were fined by the authority, on the above development.

The statement said that the authority has imposed the penalty on Identity Buildtech for not completing the Ansal Highland Park project in Sector 103 within the declared timeline of June 2022. It had moved a fresh application with the authority seeking time till May 2024, now, to complete the project.

Under the section 4(2)(l)(C) of Real Estate (Regulation and development) Act of 2016, a builder/promoter has to move an application with the authority to seek RERA registration and file an undertaking declaring a timeline to complete the project. While allowing the RERA registration to remain in force for Spaze Towers for its project Ishan Singh Commercial at Sector 78 in Gurugram, till December 2025, the regulator has imposed a penalty of Rs 25 lakh on the realtor. The project was to be completed by 2020-end, it added.

Earlier this month, the Gurugram bench of Haryana Real Estate Regulatory Authority (RERA) had issued non-bailable arrest warrants against 18 builders for violating its orders in cases pertaining to refund and delayed possession.

MC Exclusive: Karnataka clarifies on RWA registrations, homebuyers demand deemed conveyance

Karnataka has clarified in a letter to the Registrar of Cooperative Societies (RCS) that resident welfare associations (RWAs) cannot be registered under the Karnataka Societies Registration Act (KSRA), 1960, a document accessed by Moneycontrol shows.

However, it said RWAs can be registered under the Karnataka Co-Operative Societies Act (KCSA), 1959, for the maintenance of common areas, after considering previous orders from the Karnataka High Court. However, the state government left a grey area in the case of the Karnataka Apartment Ownership Act (KAOA), 1972, as writ petition 511 of 2021 is still sub- judice in the high court.

In an objection filed by the state government in writ petition 511, the government mentioned that an association cannot be formed by registering a deed of declaration. Additionally, the government also noted that, under the RERA Act, the associations have to be registered under KCSA. The rest of the matter is sub-judice.

The Karnataka Ownership Flats Act (KOFA) and RERA Act must be implemented to ensure that an association of allottees is formed under the Karnataka Co-Operative Societies Act or Company Act, which becomes a body corporate to hold the title of the project land and get legal status to sign the contracts with service providers, he added.

Though KAOA, 1972, mentions the RCS in Karnataka as the competent authority, however, the state government has not notified the rules for them. Experts argue that, in the current situation, KAOA does not have the power to register the associations as cooperative societies.

Karnataka HC quashes more cases: Last month, the Karnataka High Court disposed of two cases by quashing associations registered under KSRA 1960. A copy of the order is awaited.

Advocate Abhilash Naik added, “Right now, courts have already clarified that associations cannot be registered under KSRA. And given the unclear interpretation of KAOA, 1972, the associations in the state have only one way to be registered — under KCSA 1959.”

The homebuyers have also asked the chief minister’s office (CMO) to issue orders to all sub- registrar’s offices to stop affixing the seal and signature on the bye-laws and/or memorandum of association that promoters insert at the end of the Deed of Declaration (DoD) for associations under KAOA 1972.

Additionally, homebuyers have asked the department to allow deemed conveyance, if the promoter fails to register RWAs as per Section 17 of the RERA Act, 2016, which is currently being followed in Maharashtra. Deemed Conveyance occurs when the builder/land owner or the legal heir refuses to hand over the titles and rights to the cooperative societies. In such cases, the housing society has to appear before the District Deputy Registrar.

Source: Click Here

Noida: DLF to pay ₹235 cr as Mall of India’s land compensation

The Noida Authority has issued a notice to real estate developer DLF to pay ₹235 crore as compensation to the previous owner of the land on which the Mall of India has been built. The development comes in the backdrop of a Supreme Court order on 5 May in which it had directed the Noida Authority to ensure payment of compensation for the land to its previous owner Veeranna Reddy.

“Yes,” Noida Authority CEO Ritu Maheshwari told PTI news agency, confirming that the notice has been issued. The agency said, citing an official, that the notice was issued to DLF on December 23 and the amount has to be remitted in 15 days

In separate news, the Uttar Pradesh Real Estate Regulatory Authority (RERA) has slapped a combined penalty of ₹1.77 crore on 13 real estate developers over non-compliance with its orders on 19 December. The non-compliance relates to issues like delays in handing over flats to buyers, refunds, submission of approved maps in group housing projects, etc.

The promoters slapped with the penalty are Gardenia India ( ₹62.13 lakh), Elegant Infracon (₹7.93 lakh), Rudra Buildwell Projects ( ₹3.12 lakh), Unibera Developers ( ₹6,31 lakh), K V Developers ( ₹6.67 lakh), Three C Green Developers ( ₹42.40 lakh), Suncity Hi-Tech Infrastructures ( ₹47,515), Antriksh Engineers ( ₹6.98 lakh), Anil Gupta ( ₹9.02 lakh), Idea Builders ( ₹6.80 lakh), Gardenia Developers AIMS ( ₹7.57 lakh) and Logix Infrastructure (₹9.60 lakh), the RERA said.

It further directed the promoters to submit the compliance report of its orders within 15 days and deposit the amount of penalty within 30 days, otherwise, the amount of penalty shall be recovered as arrears of land revenue.

RERA CASE LAWS

RERA CASE LAWS

1. Orissa HC seeks clarification on flats’ registration

In an interim order on May 12 the court had directed the IGR to strictly ensure that the sale deeds registered hereafter abide by the RERA Act and rules thereunder.

The Inspector General of Registration (IGR), Odisha on Wednesday clarified before the Orissa High Court that the restrictions imposed on registration of apartments will not be applicable to projects which had received completion certificates from competent authority

prior to May 1, 2017, the date of commencement of the Real Estate Regulatory Authority (RERA) Act 2016.

IGR had on July 14 issued a public notice stating that the restrictions will not be imposed on any project ‘completed’ before implementation of RERA Act 2016. But the court had asked the IGR to properly clarify the word ‘completed’ as it can lead to ambiguity. IGR Jyotiprakash Das gave the clarification in an affidavit.

The court was hearing a PIL filed by a Bhubaneswar-based apartment owner Bimalendu Pradhan challenging the validity of the Odisha Apartment Ownership (Amendment) Rules 2021 on the ground that it is contrary to provisions of the RERA Act, 2016. Advocate Mohit Agarwal argued on behalf of the petitioner. In an interim order on May 12 the court had directed the IGR to strictly ensure that the sale deeds registered hereafter abide by the RERA Act and rules thereunder.

Source of the information: Click Here

2. Bombay HC asks MahaRERA to decide on extension of registration of a lapsed realty project within three months

The home buyers say they have been waiting for possession for 12 years. The project was originally launched in 2009 by Nirmal Lifestyle. When it did not take off, the rights were sold to Ricardo Constructions, a subsidiary of Shapoorji Pallonji.

The Bombay High Court (HC) has directed Maharashtra Real Estate Regulatory Authority (MahaRERA) to decide within three months on the application filed by Ricardo Constructions, a subsidiary of Shapoorji Pallonji (SP), for extension of registration of a real estate project named US Open, in Mulund, Mumbai.

Background: The petitioners, in this case, the home buyers in the project, formed an association and approached the Bombay HC. They alleged that they have been waiting for possession of their homes for 12 years now, but have not been able to get one. The project was originally launched in 2009 by Nirmal Lifestyle. However, it did not take off.

Owing to this, Nirmal Lifestyle in June 2019, sold the rights to the project of Ricardo Constructions. Thereafter, the new developer promised possession in September 2021. But that too, did not happen, say the home buyers. Now with the twin lapses of the promised date and RERA registration, there is no clarity on the construction or extension of the registration with MahaRERA.

Bombay HC order

The new developer, Ricardo Constructions, submitted in the Bombay High Court that the application for extension of registration was filed by them in June 2021 and on November 16, 2022. However, no decision has been taken on the same till now.

On hearing this, the Bombay HC passed an order on November 18, 2022, directing MahaRERA to decide on the application for extension within three months.

In the order it stated, “We are not aware of the pendency of the applications with the Respondent No.1 (MahaRERA). However, we may consider that as the application is for extension of Registration, the Respondent No.1 shall endeavour to decide the said

application, as expeditiously as possible. The same may be decided, if possible, preferably within three months. Depending upon the decision taken by Respondent No.1, the parties are at liberty to take appropriate steps.”

Developer side

An email response to Moneycontrol on behalf of Ricardo Constructions reads, “The project suffered due to a lack of approvals on account of issues affecting the larger layout as well as COVID-19. We have relentlessly worked with the relevant authorities between 2019 and 2022 to delink the project from the issues affecting the larger layout, including the filing of an appeal with the concerned authority and have ultimately delinked the legacy issue. Due to this regulatory issue, the RERA project completion period expired.”

Source of the information:Click Here

3. Bombay High Court orders CIDCO to consider OC for Bhagwati home buyers

CIDCO had refused to grant OC twice in a year to Bhagwati Developers, one of the most prominent developers of Navi Mumbai, for excess 1297 sq/m construction of the refugee area.

The Bombay High Court ordered CIDCO to consider the application for Occupancy Certificate (OC) for the flat buyers in the housing project Bhagwati Greens 3 in Kharghar.

Flast owners file cases against developer: The flat owners had filed 42 separate cases from July 2022 against the Developer for delayed possession and for claiming interest and compensation, the same is pending before MahaRERA.

In September 2022, CIDCO refused to grant OC to the project stating that commencement certificate was issued with cupboards, flowerbeds and pocket terraces as free of FSI component which was challenged in public interest litigation.

Buyers file Writ Petition in HC

The home buyers filed a separate complaint against the Developer and requested the Developer to file Writ Petition before Bombay High Court for receiving Occupancy Certificate but the Developer had failed to take steps to obtain Occupancy Certificate. The buyers together decided to file Writ Petition in Bombay High Court and prayed that pending PIL, their application for OC should be considered.

The High Court granted relief to the buyers and directed CIDCO thatthe outcome of PILs would be binding on the Developer/Allottees of the project but application for OC has to be considered.

Parth Chande, an Advocate from RERA Easy fighting the case on behalf of flat buyers said, “Bhagwati Greens 3 flat owners at the time of purchase and execution of their respective Agreement for Sale were promised that the project shall consist of 3 buildings Wings A,B and C. Even as per the layout plan sanctioned by CIDCO in 2017 and 2019, the Developer is entitled only to construct three buildings / wings, butthe Developers, in order to increase his profits, decided to construct one more building on the project land in the year 2022. The buyers had objected.”

The Home Buyers had agreed to purchase flats as the project is located in the midst of Kharghar Hills and has splendid view of Kharghar Waterfalls, Iskon Temple, Golf Course and Central Park. All this would have been lost and affected and their right to privacy and access to natural light and air would have been compromised due to construction of additional building in the project.

Therefore, to restrain the Developer from changing the layout plans, a separate complaint was filed by association of Home Buyers before MahaRERA on May 11, 2022 and a status quo order to restrain the developer from changing the layout plans was obtained on May 17, 2022.

The Writ Petition too was filed by Home Buyers on 29th November 2022 and Directions to CIDCO were also received on 8th December 2022. The Buyers have filed separate 42 cases from July 2022 against the Developer for delayed possession and for claiming interest and compensation and the same is pending before MahaRERA. Although it has been 6 months since filing of the complaints, Buyers expect a favourable order in short time from MahaRERA.

(To read full –Click Here)

Compliances under RERA

SOME KEY PROVISIONS AND COMPLIANCE UNDER RERA:

  • As per Section 56 of the RERA Act, 2016, the applicant or appellant may either appear in person or authorise one or more CAs, Company Secretaries, Cost Accountants, legal practitioners or any of its officers to present the appellant’s case before the Regulatory Authority, Appellate Tribunal or adjudicating officer.
  • No real estate agent can facilitate the sale/purchase of properties in a real estate projects registered u/s 3 of the Act without obtaining registration under section 9.
  • Every real estate agent shall make an application to the Authority for registration in such form, manner within such time and accompanied by such fee and documents as may prescribed in respective State’ s rules.
  • The RERA regulations has obligate the developer or promoter to publish all agreements, plans, approval, advertisement or prospectus etc. on the website of the RERA authority for the public.

Interpretation Section

  • Real Estate Agent [Section 2(zm)] of RERA Act.

Section 2 (zm) of the RERA Act defines a ‘real estate agent’ as anyone who acts on behalf of any other person in any kind of transaction be it buying or selling or hiring of real estate like a plot, apartment, buildings etc. And such a person who acts on behalf of others receives some kind of fees or remuneration for his/her acts.

These categories of people also include those who not only help others in buying and selling of properties but also involve into making prospective buyers and sellers meet each other and negotiate.

These people are popularly called as either property dealers, brokers, middlemen etc.

“RERA has made it mandatory for all property agents to get a brokerage license from their respective state governments in order to deal in any real estate transaction. This means any broker who is not registered with RERA is no longer allowed to deal in a registered property. Also, the registration is not valid for lifetime; agents will have to keep renewing it as required by the Act.”

RERA – Corporate Dose

Sl.Corporate UpdateLink
      1Goldbricks Infrastructure cuts water supply from well, 470 flat owners owners face scarcity: Around 470 flat owners of Anandam Housing scheme are reportedly facing a severe water crisis after developer — Goldbricks Infrastructure Pvt Ltd — allegedly disconnected the supply from the well. There have been many issues between the flat owners and the developer since nearly a decade. The latest incident is likely to escalate the tension. There have been many issues between the flat owners and the developer since nearly a decade. The latest incident is likely to escalate the tension.      Click Here
      22022 Year in Review: Noida’s twin towers demolition & land deals grabbed headlines: The demolitions, along with new regulations, are meant to clean up Noida’s realty sector, and send a strong signal to developers and colluding officers. These are also meant to show buyers that it is safe to invest in Noida. The twin towers’ demolition are a pan-India case study of what a developer should not do given the sheer magnitude and value of the asset being destroyed, said real estate experts.      Click Here
  3Haryana RERA issues non-bailable warrants against 18 developers for contempt: The Gurugram bench of Haryana Real Estate Regulatory Authority (RERA) on December 7 said that non-bailable arrest warrants have been issued against 18 builders for violating its orders in cases pertaining to refund and delayed possession.  Click Here
    4Homebuyers in West Bengal continue to be ‘mercilessly exploited’ as RERA remains non-functional in state: FPCE: More than a year after the Supreme Court struck down the West Bengal government’s law WBHIRA for regulating the real estate sector in the state, saying it was ‘unconstitutional’, homebuyers in West Bengal continue to be ‘mercilessly exploited’ as the real estate law RERA is still not functional, and new buyers have no mechanism to check the track record or file complaints against the builders, Forum For People’s Collective Efforts (FPCE) said on December 4.    Click Here
    5MahaRERA directs homebuyers of delayed Mumbai project to exit only after completion: The Maharashtra real estate regulator has directed homebuyers in a delayed project to withdraw from it only after the association of allottees that has taken over or another developer completes the construction of the apartments. The Maharashtra Real Estate Regulatory Authority (MahaRERA) said the homebuyers must wait until the project is completed so that the association of allottees or the new developer can sell the apartments of those who want to exit and refund them. Placing a financial liability on the association or the new developer may further delay the project, it said.    Click Here
RERA NEWSLETTER AUTHOR
Greetings to all of you!
  • 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.

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