REAL ESTATE ( REGULATION & DEVELOPMENT) ACT, 2016
RERA NEWSLETTER “RERA “- “THE REAL ESTATE SECTOR REGULATOR”
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Delay In Constitution Of RERA: Principal Secy H&UDD Given Powers
Amid delay over constitution of real estate regulatory authority, the Jammu & Kashmir Government has designated Principal Secretary, Housing & Urban Development as regulatory authority under the Real Estate (Regulation and Development) Act-2016.
The Lieutenant Government of Jammu & Kashmir has empowered Principal Secretary, H&UDD as regulatory authority under the real estate regulation law.
“In exercise of the powers conferred by third proviso of sub-section (1) of section 20 of the Real Estates (Regulation and Development) Act-2016, the Lieutenant Governor is pleased to designate Principal Secretary to Government Housing and Urban Development Department as the regulatory authority for the purposes of the said,” reads a notification issued by H&UDD.
Under the law, until the establishment of a regulatory authority, the appropriate government shall, by order, designate any regulatory authority or any officer preferably the Secretary of the department dealing with Housing, as the regulatory authority for the purposes under this Act. The J&K administration had last year initiated the process for constitution of the Real Estate Regulatory Authority (RERA) under the Real Estate (Regulation and Development) Act, 2016. (To read full – Click Here)
‘Incomplete project: UP RERA imposes penalty on developer’
In case of non-payment of fine, ₹2,130 per day would be added to the penalty of ₹6.17 lakh, till the date of payment, pointed out the authority. The regulatory authority also directed the developer to deposit the fine amount in the next 30 days. The fine has been imposed under Section 63 of the RERA Act.
LUCKNOW The UP Real Estate Regulatory Authority (RERA) imposed a fine of ₹6.17 lakh on developer Parsvnath for not completing pending work on its housing project – Parsvnath Planet in Gomti Nagar.
In case of non-payment of fine, ₹2,130 per day would be added to the penalty of ₹6.17 lakh, till the date of payment, pointed out the authority. Rajesh Kumar Tyagi, secretary, UP RERA, passed the order on a complaint filed by Alok Singh of Parsvnath Planet.
During this period, several hearings took place in which the regulatory authority directed the promoter to complete pending work of its housing project, the Parsvnath Planet. However, the promoter failed to comply with the orders.
Issuing the order on January 11 this year, UP RERA secretary also directed the developer to submit a written explanation on non–compliance of its earlier orders related with completion of the project.
According to Section 63 of the RERA Act, if a promoter fails to comply with any orders of the authority, then a penalty could be levied on the basis of each day of default. The penalty could be up to 5% of the cost of the project. (To read full – Click Here)
Tribunal asks RERA to penalise unregistered real estate projects in Assam
The Assam Real Estate Appellate Tribunal (REAT) has asked the Real Estate Regulatory Authority (RERA), Assam to penalise new and ongoing real estate projects which have not applied for registration or are not registered under RERA.
The tribunal directed RERA to take necessary steps to ensure that all new and ongoing real estate projects within its jurisdiction have made applications for registration or are duly registered.
“New and ongoing projects which have not made applications and are clearly in default be appropriately dealt with and penalised in strict terms of the Real Estate (Regulation and Development) Act, 2016,” the tribunal said in a statement here.
The tribunal observed that sufficient powers were vested with the regulatory authority under Section 35 of the Act to proceed suo motu and to call upon any promoter at any time to furnish in writing such information or explanation relating to its affairs as the authority may require and also to appoint one or more persons to make inquiry in relation to the affairs of any promoter.
“The appellant has been involved in a real estate project for development and sale of flats/apartments called “Amrit Residency” in Guwahati over a project area of well above 1500 square metres, comprising 30 flats. Work on the real estate project commenced on January 11, 2014 and, as on date, the status of the project is an ongoing project. Neither the completion certificate nor the occupancy certificate has yet been issued by the competent authority,” the statement said.
RERA had imposed a penalty of Rs 3 lakh on MEE Infrastructure for failure to apply for registration in accordance with the provisions of the Act.
The Assam REAT rejected the plea of ignorance of law taken by the appellant calling it legally unacceptable. The order imposing a penalty on the promoter was upheld by the tribunal and the appeal was rejected. (To read full – Click Here)
Gurugram: H-Rera to bring in ‘code of conduct’ for brokers
In order to streamline the functioning of real estate brokers in Gurugram, the Haryana Real Estate Regulatory Authority (H-Rera) will come up with a ‘code of conduct’ for brokers and property dealers by the end of next month. Officials from the authority said the move is aimed at ensuring that the dealers do not indulge in unfair trade practices.
The authority will also reach out to the broker community and ensure that there is a wider compliance with regard to the norms as prescribed in the Rera Act, the officials said, adding that at present there are 1,800 registered brokers with H-Rera, Gurugram.
KK Khandelwal, chairman of H-Rera, Gurugram, said that the Rera Act offers a real estate agent a formal and legal recognition, while defining their responsibilities and duties. “We have come across several instances where property dealers falsely represented products and services, and misled customers. The proposed code of conduct will resolve these issues,” he said.
The code will also ensure that brokers maintain record of transactions and do not charge more than 1% commission rate on the sale of properties, the H-Rera chief said, adding that there will also be a provision for imposing a penalty in case of non-compliance by a real estate agent.
The brokers are not very enthused with the proposed code of conduct or requirement of registration by the authority. “The proposed code of conduct will further make it difficult for brokers to operate as the realty market is already facing slowdown. The cost of registration with H-Rera is very high and there is no support from the authority,” said Ravinder Agarwal, president, Association of Certified Realtors of India (Gurugram chapter).
(To read full – Click Here)
Noida: 7 builders fined Rs 1 crore for not giving flats within deadline
The Uttar Pradesh Real Estate Regulatory Authority (RERA) has imposed a penalty of Rs
1.08 crore on seven developers in the city after they failed to comply with the earlier orders of UP RERA to hand over the flats/units to their buyers within the given deadline.
In a strict response to the incompetency of builders or developers in Noida, The Uttar Pradesh Real Estate Regulatory Authority (RERA) has imposed a penalty of Rs 1.08 crore on seven developers in the city after they failed to comply with the earlier orders of UP RERA to hand over the flats/units to their buyers within the given deadline.
The Uttar Pradesh Real Estate Regulatory Authority (RERA) has imposed a penalty of Rs
1.08 crore on seven developers in the city after they failed to hand over the flats/units to their buyers within the given deadline.
List of builders fined
|Name of builder||Fine amount|
|Alpha Corp Development Pvt Ltd||Rs 8.75 lakhs|
|Ansal Urban Condominium Pvt Ltd||Rs 3.09 lakhs|
|Supertech Limited||Rs 6.37 lakhs|
|Gardenia India Ltd||Rs 35.41 lakhs|
|Best Realcon Pvt Ltd||Rs 27.08 lakhs|
|Rcity Infrastructure Pvt Ltd||Rs19.33 lakhs|
|SJP Infracon (Migsan Janpath)||Rs 8.41 lakhs|
As per UP-RERA norms, builders in Noida and Greater Noida are expected to submit the progress report of their project to UP RERA every three months but the builders are not complying with the norms.
Meanwhile, UP-RERA has extended the deadline till February 28 for the builders to submit their respective reports. (To read full – Click Here)
RERA CASE LAWS DIGEST
1. RERA ACT- Inconvenience In Making Pre-Deposits Not An Onerous Circumstance Warranting Relaxation Of A Statutory Mandate: Punjab And Haryana High Court
Case Title: Ramprastha Promoters And Developers Pvt. Ltd. v. Union Of India and Ors.
Mere hardship in making pre-deposits which include diverting funds is not an arduous circumstance in any manner and does not necessitate waiver of a statutory mandate, the Punjab and Haryana High Court has held.
In a case about a batch of petitions filed by several real estate developers against orders passed by the Haryana Real Estate Regulatory Authority involving common questions of law regarding S.43(5) of RERA Act, 2016, which sought to get a relaxation from High Court under A.22, in making pre-deposits, Justice Vinod S. Bhardwaj has observed that “A Petitioner seeking the indulgence of Writ Court to seek exemption from statutory mandate must establish strong reasons and to establish a deprivation of its statutory remedy of appeal by demonstrating to the satisfaction of Court, it’s inability to arrange for pre-deposit despite all reasonable efforts.”
The Court out rightly perused several sections of RERA Act, 2016 in question and noted that the Act explicitly and clearly entitles allottees to seek return amount with interest and
compensation under S.12 which also casts a liability on the promoters to furnish correct facts in advertisements and if not done so, then the investment must be returned along with interest and compensation. Further noting that S.18 entitles an allottee to either withdraw from the project and seek the interest, investment and compensation or not withdraw and take interest from the promoter for each month’s delay in handling possession and thus, on a perusal of Punjab and Haryana High Court’s judgment titled Experion Developers Private Limited v. State of Haryana & Ors. and apex court’s judgment in New Tech Promoters and Developers Private Limited v. State of UP & Ors., the Court stated that the “power of adjudication and determination for relief is conferred upon the regulatory authority itself and not upon the adjudicator. And the Authority has the jurisdiction to entertain complaints seeking a refund of the amount and interest on the refund and penalty there and not the Adjudicating officer.”
Stating that the petitioner’s contentions were devoid of any merit, the court dismissed the petitions after ordering petitioners to four weeks from the date of this order to make the pre- deposit and for any further extension, the petitioners were directed to deposit a sum of INR 5000 per case to the Poor Patient Welfare Fund, PGIMER, Chandigarh.
(To read full – Click Here)
2. ‘Refund, penalty powers lie with RERA, not adjudicating officer’
The Punjab and Haryana high court said for complaints of refund of the amount, delayed delivery of possession and penalty, etc the adjudicating authority under the Real Estate (Regulation and Development) Act, 2016, will be the Real Estate Regulatory Authority (RERA) and not the adjudicating officer.
The high court bench of justice TS Dhindsa and justice Vinod Bhardwaj was dealing with a clutch of petitions filed by developers from Haryana. The HC said the legislature intent of the law demonstrates that the adjudicating officer has to deal with issues of adjudging compensation and award of interest thereupon.
The HC was dealing with the petitions in which the developers had raised issues with regard to the adjudicating authority in case of complaints of delay, penalty and deciding on compensation, etc against the developers and powers of the RERA authority and adjudicating officer, established under the RERA law.
The second issue was whether the HC can intervene to waive off pre-deposit condition for an appeal before tribunal against the RERA orders, by a developer.
The HC said the compensatory relief under the law has been kept separate and distinct and accrues in the event of occurrence of certain prerequisites. The determination in that case has to be done by the adjudicating officer, under the RERA law.
“The legislature has consciously provided for a mandatory pre-deposit without exceptions in order to ensure due completion of projects to avoid undue appeals,” it said, adding that a developer seeking indulgence of the HC to seek exemption from statutory mandate must establish that the discharge of statutory obligation would be ‘onerous’ and that the court must come to the rescue out of statutory mandate.
(To read full – Click Here)
3. FPJ Legal: Supreme Court says builder’s failure to obtain OC is a ‘deficiency in service’
The Supreme Court on Tuesday upheld a complaint of a cooperative housing society of Mumbai against a builder as a consumer dispute and directed the National Consumer Disputes Redressal Commission (NCDRC) to decide the dispute within three months.
The housing society had moved against the fault of the builder in not getting the occupation certificate from the municipal authorities and hence the flat owners were denied electricity and water connections for which they had to later pay at a higher rate.
The court held that the failure of the builder to obtain the occupation certificate is a deficiency in service for which he is responsible and the members of the society are well within their rights as “consumers” to pray for compensation.
The judgment terming as ‘deficiency in service’ developers not obtaining Occupancy Certificates (OC) will have a significant impact in Mumbai, according to activists and legal experts.
There are reportedly around three lakh buildings in Maharashtra, of which 15,000 in Mumbai alone don’t have OCs. The BMC has allowed the residents to stay in these structures on humanitarian grounds, charging them double the amount for water bills and property tax. Further, these buildings do not come under the purview of the fire brigade. Various efforts by the government to regularise them through amnesty schemes have failed as the penalty was too high and unaffordable for the flat owners. (To read full click here)
- Compliances under RERA
- Obtaining RERA registration for agents is mandatory. Without the RERA registration for agents, a real estate agent is not authorized to facilitate the sale or purchase of an apartment, plot, building, etc.
- If the homebuyer wishes to withdraw the investment, the promoter must return all the funds collected so far, along with the applicable interest as prescribed under the rules and compensation as arbitrated by an adjudicating officer.
- If the homebuyer wishes to stay invested, the promoter must pay the interest for every month of delay as compensation.
- The promoter will have to rectify any structural defects, caused by poor workmanship, quality or provision of services, brought into notice within five years from the date of possession. The rectification would not attract any additional charges from allottees and will have to be carried out within a span of 30 days from the date of filing of the complaint. Failure to do so will entitle the allottees to seek relevant compensation as mentioned in the Act.
- In order to infuse a greater amount of transparency into the industry, RERA requires certain information to be updated every quarter, on the website of the concernedRERA authority. This system allows stakeholders to easily access information relating to a registered project online.
- Quarterly Progress Reports (“QPR”) under the Regulations/Formats: At the time of registration of a project, RERA requires the promoter to set certain targets in respect of construction and finance. The construction target is based on the timelines set by the promoter for stage-wise construction and completion of every floor, wing or building, as the case may be; and the financial target is based on the amount of money planned to be deposited by the promoter in the dedicated bank account opened for the real estate project, at stated intervals. On one hand, some states and union territories have notified regulations or provided formats that require the promoter to submit a project progress report at the end of every financial quarter. On the other hand, some states and union territories have not made provisions in respect of QPRs. QPRs contain more detailed information relating to the project than the quarterly updates required to be given under RERA and the rules notified thereunder. Most of the states and union territories that have notified such regulations or have provided such formats, have a separate webpage for filing the QPRs. QPRs enables the RERA authority to monitor the progress of the project and enables investors, financial institutions and homebuyers to make a more informed decision before investing in a project.
Our State RERA Corner
- Only 32 realty projects registered under Delhi RERA
The RERA has not been as effective in protecting home-buyers interest in Delhi compared to elsewhere. There have been just 32 project registrations in Delhi RERA, against 71,307 projects registered in November 2021. Developers are also taking advantage of loopholes in Delhi RERA, thereby impacting homebuyers.
“This number of RERA registered projects in Delhi is not only amongst the lowest in any Union Territory, it also falls dismally short when compared with RERA registered projects of cities like Mumbai and Bengaluru,” a white paper released by IndiaSotheby’s International Realty (ISIR) said.
Delhi has a per capita income considered the second-highest in India and nearly three times the national average. The per capita income of Delhi during 2020-21 is estimated at
₹3,54,004. The total purchasing power of Delhiites has grown by 37 per cent in the last ten years.
“In such sale of builder floors in Delhi at early stages, the builder further sells un-constructed floors to new sellers and takes large advances mis-using the GPA, as high as 85per cent of the floor value. This structure exposes both the original owner of the home and the new home buyer to an extremely high level of risk,” the white paper states, adding that, in case of any
delay, siphoning of money by the builder, or a delinquency, the entire risk rests with the two categories of homeowners.
The GPA transactions are undertaken to largely avoid stamp duty and GST payment to the state. This is a huge revenue loss.
According to the white paper, present RERA rules provide an exemption from registration for the development of up to 500 square meters and fewer than eight apartments. Developers have begun using this loophole by ensuring that the number of units under development are less than five. (Click Source)
2. Delhi Government Should Amend RERA, To Bring More Realty Projects, Brokers Under Its Ambit: Report
Property consultant India Sotheby’s International Realty has suggested that the Delhi government should amend its realty law RERA to bring more projects and brokers under its ambit in order to protect homebuyers in the national capital. In its white paper ‘Towards A Healthier Real Estate Market in the National Capital’, the consultant pointed out that only 32 projects are registered under Delhi’s RERA.
The Real Estate (Regulation and Development) Act, 2016 [RERA] was passed in Parliament in March 2016. Certain Sections of RERA were notified with effect from May 1, 2016 and remaining sections from May 1, 2017. The central law has been implemented in almost all states and UTs.
As per the law, no registration of the real estate project will be required where the area of land proposed to be developed does not exceed 500 square meters or the number of apartments does not exceed eight inclusive of all phases. “There is an urgent need to amend the RERA Act, to include 200 square meter or 4 floor development.”
In Delhi, only 435 real estate agents or brokers are registered under RERA as compared to nearly 4,000 in Mumbai City and around 9,000 in Mumbai suburbs. The consultant mentioned that the state government has the power to reduce these thresholds.
Agent name and RERA registration number should be mandatory in all property transactions involving an agent, it suggested. Ideally every sale document should have agent details and its RERA registration number, to ensure proper implementation, the consultant felt. “We recommend the Delhi government to consider a 0.25 per cent discount on stamp duty for RERA registered projects,” the paper said. India Sotheby’s International Realty also urged the Delhi real estate regulator to ensure proper implementation of escrow account rule.
As per the law, developers need to transfer 70 per cent of the money received from customers in an escrow account maintained with a scheduled commercial bank. This particular provision prevents developers from siphoning off funds, using funds for other developments or buying fresh land. “We also recommend that various agreements such as Agreement to Sale and sale deeds, are standardized. While the RERA Act stipulates that, the practice is not being followed,” the paper said.
Local private builders dominate the market. India Sotheby’s International Realty is one of the leading housing brokerage firms in the national capital, particularly for big-ticket transactions in Lutyens Delhi and colonies in South Delhi. Click Source)
RERA – Corporate Dose
|1||UP RERA asks Supertech to speed up order compliance Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) on 23 June reviewed the compliance status of the orders passed against Supertech Ltd for the refund of the amount of the allottees. The company’s chairman R. K. Arora assured that by the end of August compliances will be done for 70% of the orders.||Click Here|
|2||Gurugram: State Rera to reduce average time for plea resolution to 15 days: The Haryana Real Estate Regulatory Authority (H-Rera) plans to reduce the average time taken to resolve a petition–from three months to 15 days– this year onwards. To achieve this objective, the authority will hold summary trials and set up a digital judicial court to help reduce arbitration time and adjudicate disputes between homebuyers and developers, according to officials in the know.||Click Here|
|3||Homebuyers’ body approaches SC over non-implementation of RERA in West Bengal: RERA website of the state is not yet operational, homebuyers’ body FPCE said. On the contrary, the website of WBHIRA Regulatory Authority continues to exist thereby misleading homebuyers, it added. Forum for People’s Collective Efforts (FPCE), an umbrella association for homebuyers, has filed a plea in the Supreme Court, stating that the members of RERA Authority and the Appellate Tribunal have not yet been appointed in West Bengal and the portal is not yet functional even after eight months of the apex court striking down West Bengal Housing Industry Regulation Act (WBHIRA) 2017 as ‘unconstitutional’.||Click Here|
|4||In a first, RERA allows transfer of rights between firms for project completion: The Uttar Pradesh real estate regulatory authority (UPRERA) has allowed the “transfer of majority rights” in the realty project — Bizlife — in Noida’s Sector 62 from an old promoter to a new one who wants to finish and deliver the delayed project in time. The move will not only safeguard the interests of buyers but also enable the new promoter to deliver the same according to the rules. The UPRERA has allowed the change under Section 15 of the RERA Act.||Click Here|
|5||Home buyers organise virtual protest against poor implementation of Karnataka RERA A forum, formed by a collective of dissatisfied home buyers, had approached RERA multiple times, submitting several memorandums in order to get their demands heard. With no response to their memorandums, the Karnataka Home Buyers Forum organized an online protest on Sunday against the poor implementation of the Karnataka Real Estate Regulatory Authority (K- RERA). Numerous home buyers from various projects across Bengaluru and Karnataka joined the virtual andolan to voice their concerns and problems including a lack of action by K-RERA against builders.||Click Here|
RERA -Tech Bites
- H-Rera digital court to redress disputes
The Haryana Real Estate Regulatory Authority (H-Rera) Gurgaon would enter into new era of digital dispute redressal system to provide a gateway for quicker and affordable justice to home buyers, allottees, promoters, real estate agents and other aggrieved persons and stakeholders in the real estate sector in the state.
With this, for the first time in the dispute redressal system, machine learning and artificial intelligence techniques would be put to use to avoid piling up of matters in the authority. A MoU has been signed by H-Rera with Jupitice Justice Technologies Pvt Ltd for complete digitisation of grievance redressal system of the Gurgaon setup.
The H-Rera Gurgaon is one of the leading authorities in terms of disposal of cases, as the total complaints disposed of it comes out to 14,801, whereas similar authorities across India disposed of 82,750 complaints. The disposal of complaints by H-Rera is around 20% of total in the country. (To read more: Click Here)
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Prepared & Compiled By:
CS Rajat Agrawal Company Secretary
CS Lalit Rajput Company Secretary