THE RERA NEWSLETTER 37th EDITION – Monthly(October, 2023)

Monthly Corporate RERA Bulletin

  • Rera Imposes ₹42,000 Fine On Vizag Builder

Visakhapatnam: The AP Real Estate Regulatory Authority (Rera) has imposed a penalty of 42,000 on GCON Urban Builders, Visakhapatnam, for violating norms.

A flat owner had filed a petition against the builders for selling the unit with less carpet area than what was promised.

Chetti Satya Venkata Jagan Kumar Raja (Jagan), said that his mother, Chetti Lakshmi Bhai (62), a widow of an Army officer, had filed a petition against Gottumukkala Satyanarayana Raju and Gottumukkala Siva Ram of GCON Urban Builders.

Jagan bought one residential duplex flat in Bay Ridge project of GCON Urban builders in Vizag from Satayanarayana Raju and Sivaram in October 2018. As per the registered sale deed document, the overall area of the flat is around 2,884 sq ft, including the carpet area (net usable area) of 1,997 sft. But as per the revised area statement issued by GVMC, it is found to be 1,825.5 sft, and admittedly, there is a difference of 172 sft in carpet area.

For violating the provision of the RERA Act the authority has directed the GCON Urban builders to refund the amount charged for the excess area of the flat and to execute necessary deeds in favour of the complainant. The authority has decided to impose a penalty of 42,000 on the GCON Urban builders.

Sub-inspector of Three Town police station S Santosh Kumar said that they have registered a cheating case against GCON Builder under Sections 420 and 506 r/w 34 of IPC following the complaint from Chetti Lakshmi Bhai. The investigation is under process, he added.

We also published the following articles recently

AP RERA imposes Rs 42,000 penalty on GCON Urban builders for violating norms

The AP Real Estate Regulatory Authority (RERA) has fined GCON Urban builders in Visakhapatnam for violating norms. The penalty of Rs 42,000 was imposed after a complaint was filed by Chetti Lakshmi Bhai, who alleged that the flat she purchased had a smaller carpet area than promised. The authority has directed the builders to refund the excess amount charged for the area and execute necessary deeds. A cheating case has also been registered against GCON Builders.

The city of Prayagraj in India is experiencing a rise in dengue cases, with a total of 107 cases reported so far. Most of the new cases are from urban areas, but some are from semi-urban areas as well. The health department has been conducting fogging and anti-larvae spray exercises to control the spread of the disease. However, residents are urged to take preventive measures such as using mosquito nets and repellents. Other cities in India, including Indore and Chhattisgarh, are also seeing an increase in dengue cases. In Ranchi, local laboratories are under stress due to the surge in demand for dengue tests.

  • UP RERA warns buyers, investors against misleading, fraudulent ads

The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) on Tuesday termed the advertisements of Sarvottam World as “misleading and fraudulent” and warned buyers and investors against its upcoming project.

The UP RERA noted that a real estate project named ‘Megapolis/Sarvottam Megapolis’ in a hi-tech township named ‘NEWOIDA’ is being advertised by a promoter ‘Sarvottam World’ and being broadcast and publicized on all platforms of media – newspapers, radio, digital, etc, according to an official statement.

“In this regard, we have to inform and warn stakeholders of the real estate sector that the said advertisement is completely misleading and fraudulent. As per the description presented in the advertisement, there is no such project registered with RERA,” UP RERA Secretary Pramod Kumar Upadhyay said.

The mentioned registration numbers in the advertisements – UPRERAPRJ10825, UPRERAPRJ10851 and UPRERAPRJ11033 belong to another promoter i.e Uttam Steel and Associate (Consortium) and Ansal Hi-Tech Township, he said.

“This type of advertisement by the promoter is a violation of the provisions of the RERA Act. This type of advertisement creates waves of a negative image about the promoter towards the stakeholders of the sector. This may likely cause injustice to the buyers,” Upadhyay said.

It also appealed to potential and future buyers and investors in the real estate sector that before purchasing or investing in any project, ensure to obtain all the information related to the project through the registration number given in the advertisement that is available on the RERA portal, www(dot)uprera(dot)in, and then only take a decision.

  • UP Rera allows promotor to complete stuck Elegant Ville project in Noida

The Uttar Pradesh Real Estate Regulatory Authority on Friday allowed a realtor to complete a stuck housing project in Greater Noida. The UP RERA approved the promotor’s plan with the consent of a majority of allottees to complete the remaining construction and development work of Elegant Ville project in Techzone 4 area of Greater Noida West.

According to RERA officials, the project with 761 units was scheduled to be built in four phases and delivered by 2019 but got stuck.

“To protect the interests of the allottees of Elegant Ville, a stuck project of Gautam Buddh Nagar, UP RERA has authorized the promoter to complete the remaining construction and development work under provisions of section 8 of the RERA Act with the consent of its majority of allottees,” UP RERA said.

  • Telangana State RERA levies hefty penalties on errant builders

The Telangana State Real Estate Regulatory Authority (TS-RERA) on Friday imposed a hefty penalty of ₹10.74 crore on Sahiti Infratech Ventures Pvt. Ltd., ₹6.5 crore on Mantri Developers Pvt. Ltd. and ₹25 lakh on Sai Surya Developers Pvt. Ltd., for several alleged violations of the RERA Act, 2016.

In an official release, TS-RERA chairman N. Satyanarayana said the penalties were imposed after a meticulous review of each builder’s conduct with regard to complying with provisions of the Act. The builders have been required to deposit the penalty with TS-RERA within a deadline. Failure to do so may result in further legal action as per the Act.

The chairman, along with members K. Srinivasa Rao and Laxmi Narayana, had already conducted hearings following 132 complaints received against projects titled ‘Sahiti Sishta Abode’, ‘Sahiti Sitara Commercial’ and ‘Sahiti Sarvani Elite’, which had not been registered with the authority.

Hearings had also been held for projects titled ‘Mantri A’ and in the final order, the penalty was levied for violating various provisions of the Act. About four complaints were received for the project titled ‘Nature County’ and others belonging to Sai Surya Developers, and accordingly, penalty was imposed.

Mr. Satyanarayana sought compliance of the provisions of the Real Estate (Regulation and Development) Act, 2016, and the Telangana State Real Estate (Regulation and Development) Rules, 2017, for healthy development of the real estate sector, added the release.

  • UP-Rera to focus on recovery of buyers’ money from realtors

UP-Rera officials said they will start attaching the assets of realtors who are delaying the refund to homebuyers

The Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) said it has started speeding up the process to recover homebuyers’ money from realtors who have failed to deliver projects, after buyers started seeking refund amid uncertainties about project completion.

UP-Rera officials said they will start attaching the assets of realtors who are delaying the refund to homebuyers and recover the money by auctioning attached properties on public platforms.

According to rules, homebuyers seeking refund in realty projects that failed to live up to promises made during flat sale, file their complaints with UP-Rera. Several buyers also seek refund as they do not trust the realtor to deliver the project.

Once a case is filed, UP-Rera then gives time to realtors to issue the refund on their own and if they do not, then UP-Rera has the power to attach builder assets, auction it, raise funds and then hand it over to buyers.

“The UP-Rera has issued more than 8,575 recovery certificates amounting to ₹3,015 crore so far and about 32% of this amount has been recovered till date. Of this, ₹630.70 crore has been recovered by district administrations across the state and deposited into accounts of 3,421 allottees. And recovery certificates worth ₹338.50 crore have been resolved in 1,185 cases between promoters and allottees,” said Sanjay Bhoosreddy, chairman, UP-Rera.

In 8,100 cases, homebuyers and promoters have reached settlements involving properties with a total value of ₹2,950 crore. The conciliation forum has also settled properties with a total value of ₹500 crore, involving 1,290 allottees, said officials.

“The UP-Rera has resolved about 90% of consumer complaints and as per our data, of the 50,900 consumer complaints received, 43,930 have been resolved till date. These complaints make up about 39% of the total complaints in the country, and the overall disposal rate in the country is about 40%,” said Bhoosreddy.

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  • TS-RERA initiates virtual hearing of complaints

TS-RERA (Real Estate Regulatory Authority) had initiated virtual hearing of complaints within 40 days of formation of the full-fledged body and through this citizens can attend from any part of the world. It is also convenient for the old and infirm to participate in the proceedings from the comfort of their homes in case they are unable to physically attend the meetings, said TS-RERA chairman N. Satyanarayana on Tuesday.

The regulatory authority had also issued notices to three real estate projects, including ventures — Sri Lakshmi Narasimha Country – 3 at Aleru and Yadadri, Arna Infra Developers for selling open plots at Maheshwaram and Aranya venture selling open plots at Nagarjunasagar highway (Chintapalli) and Srisailam Highway (Amanagal) — for marketing through brochures without taking the mandatory registration from it.

The chairman had informed in an official release that the promoters behind these ventures have been given 15 days to reply to the show cause notices or face action. This is for the second time this month that TS-RERA had served notices to erring real estate firms.

Mr. Satyanarayana had said that pre-launch of real estate ventures without HMDA/GHMC/UDA/Local Bodies’ approvals and TS RERA registration will face strict action under the RERA Act, which applies to constructions of more than eight lots and in areas exceeding 500 square metres. He urged citizens to buy properties from RERA-registered projects only, said a press release.

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Article Corner

Unlocking Success: How RERA Act, 2016 Opens New Opportunities for Professionals in the Real Estate Sector

    By CA Harsh Mehta & Adv. (CS) Lokesh Shah

I. Introduction to RERA Act, 2016

The Real Estate (Regulation and Development) Act, 2016 (RERA) has emerged as a game-changer in the real estate sector, revolutionizing the way the industry operates in India. This comprehensive legislation was enacted to address the concerns and protect the interests of homebuyers, while also promoting transparency and accountability in the real estate market. The RERA Act has opened up a new area of practice for professionals who specialize in navigating the intricacies of this legislation and providing valuable guidance to stakeholders involved in real estate transactions.  

A. Understanding the Need for RERA

The need for RERA arose due to the prevalent malpractices and lack of regulation in the real estate industry. Homebuyers often faced challenges such as delayed project deliveries, deviation from promised specifications, and non-transparent practices by developers. RERA was introduced to instil confidence among buyers, establish a fair and transparent process, and ensure timely completion of projects.

B. Overview of the RERA Act

The RERA Act introduces a regulatory framework that governs the real estate sector, with an aim to protect the interests of buyers and promote efficient project development. It establishes Real Estate Regulatory Authorities (RERAs) in each state to oversee the implementation and enforcement of the Act. RERA also mandates the registration of real estate projects and imposes obligations on developers, buyers, and real estate agents.

C. Impact of RERA on the Real Estate Sector

The impact of RERA on the real estate sector has been significant. It has brought about a paradigm shift by introducing transparency, accountability, and a structured legal framework. With the implementation of RERA, developers are compelled to adhere to strict guidelines and timelines, leading to increased consumer confidence. The Act has also facilitated the resolution of disputes and grievances, ensuring a more secure and regulated environment for homebuyers.

II. Key Provisions of the RERA Act

The RERA Act encompasses various provisions that govern different aspects of real estate projects, ensuring a fair and transparent transaction process. Understanding these key provisions is essential for professionals operating in the RERA domain.

A. Registration of Real Estate Projects

The RERA Act mandates the registration of all real estate projects with the respective state’s Real Estate Regulatory Authority. This provision aims to ensure that developers provide accurate and reliable information to potential buyers.

  1. Eligibility criteria for registration: To be eligible for registration, developers need to fulfil certain criteria, including having a valid title to the land, obtaining the necessary approvals, and submitting the required documents.
  • Documentation and procedure for registration: Developers are required to submit detailed project plans, land title documents, financial statements, and other relevant information during the registration process. The registration procedure involves a thorough scrutiny of these documents by the regulatory authority.

B. Obligations of the Promoter

Under the RERA Act, developers (promoters) have several obligations to fulfil to ensure transparency and protect buyers’ interests.

  1. Disclosure of project details: Developers must provide comprehensive information about the project, including layout plans, project specifications, schedule of completion, and details of amenities and facilities. This ensures that buyers have complete visibility into the project they are investing in.
  • Adherence to timeline and quality standards: RERA mandates strict adherence to project timelines, ensuring that developers complete projects within the stipulated time frame. Additionally, developers are required to adhere to the quality standards specified in the agreement and provide necessary warranties to homebuyers.

C. Rights and Obligations of the Allottees

The RERA Act safeguards the rights of homebuyers and provides them with certain remedies in case of non-compliance by the developer.

  1. Protection of buyers’ interests: RERA ensures that buyers are protected from unfair practices and ensures that they receive the promised amenities, specifications, and quality. It prohibits developers from making any changes to the project without the consent of the allottees.
  • Remedies available to buyers in case of non-compliance: Buyers have various remedies available under RERA in case of any violation or non-compliance by the developer, including seeking a refund, compensation, or appropriate legal action.

D. Establishment of Real Estate Regulatory Authority (RERA)

The establishment of the Real Estate Regulatory Authority is a crucial aspect of the RERA Act, ensuring effective regulation and oversight in the real estate sector.

  1. Role and functions of RERA: RERA acts as the regulatory body responsible for implementing and monitoring the provisions of the Act. It oversees project registrations, resolves disputes, and addresses grievances raised by homebuyers and other stakeholders.
  • Grievance redressal mechanism: RERA provides a robust grievance redressal mechanism, allowing homebuyers to file complaints against developers for any violation of the Act. RERA authorities have the power to mediate and pass orders for resolution, thereby providing an effective dispute resolution platform.

III. Scope of Practice for Professionals

The RERA Act has created numerous opportunities for professionals to contribute their expertise and play a crucial role in facilitating compliance and resolving disputes.

A. Role of Lawyers under RERA

Lawyers have a significant role to play in the RERA domain, providing legal advice to both developers and buyers. They assist in project registration, drafting agreements, resolving disputes, and ensuring compliance with RERA regulations.

  1. Legal advisory for promoters and buyers: Lawyer’s help developers understand and comply with the legal requirements of the RERA Act. They also provide guidance to buyers in understanding their rights, reviewing agreements, and seeking legal remedies in case of disputes.
  • Assisting in project registration and compliance: Lawyers assist developers in navigating the registration process, ensuring that all necessary documents are submitted accurately and timely. They also help developers comply with ongoing reporting and disclosure obligations under RERA.

B. Real Estate Agents and RERA

Real estate agents, also known as property consultants, play a crucial role in the real estate transaction process. With the introduction of RERA, their role has become more defined and regulated.

  1. Mandatory registration and compliance: RERA mandates the registration of real estate agents with the regulatory authority. Agents are required to maintain records, disclose project details to buyers, and facilitate transparent transactions. Non-compliance can lead to penalties and even suspension of their registration.
  • Responsibilities of agents under RERA: Real estate agents are responsible for providing accurate information to buyers, assisting in the execution of agreements, and maintaining a high level of professionalism and ethical conduct. They act as intermediaries between buyers and developers, ensuring compliance and transparency throughout the transaction.

C. Role of Architects and Engineers

Architects and engineers are integral to the real estate development process and have specific responsibilities under the RERA Act.

  1. Compliance with RERA guidelines: Architects and engineers must ensure that the project plans and designs comply with the guidelines specified by RERA. They play a crucial role in ensuring that the project is executed as per the approved plans, thereby ensuring quality and adherence to regulations.
  • Certification of project plans and progress: Architects and engineers are responsible for certifying the project plans, progress, and adherence to quality standards at various stages of construction. Their certification provides assurance to homebuyers regarding the progress and quality of the project.

D. Role of Tax Consultants and Chartered Accountants under RERA

Tax consultants and chartered accountants play a crucial role in assisting developers, promoters, and homebuyers in navigating the intricacies of the Real Estate (Regulation and Development) Act, 2016 (RERA). Their expertise in taxation and financial matters is invaluable in ensuring compliance with RERA regulations and optimizing financial management in real estate projects. Let’s explore the specific roles they fulfil under RERA:

  1. Assisting in project planning and compliance: Professionals can provide valuable insights to developers in the initial stages of project planning. They can assess the feasibility of projects, advise on legal and regulatory requirements, and assist in formulating strategies for successful project execution.
  1. Risk assessment and mitigation strategies: Professionals can help developers identify potential risks associated with a project and develop effective strategies to mitigate those risks. This includes assessing legal, financial, and market risks and providing recommendations for risk management.
  1. Tax Planning and Compliance: Tax consultants and chartered accountants provide essential guidance to developers and promoters regarding the tax implications of real estate transactions. They analyse the tax provisions applicable to various aspects of the project, such as capital gains, service tax, goods and services tax (GST), and other indirect taxes. By offering tax planning strategies, they help optimize tax efficiency and ensure compliance with tax laws.
  1. Financial Reporting and Auditing: RERA mandates the submission of financial statements and project audits by developers and promoters. Tax consultants and chartered accountants assist in preparing these financial reports in accordance with RERA guidelines. They conduct thorough audits to ensure accurate financial information and adherence to financial reporting standards. This helps instil confidence in stakeholders, including homebuyers, by providing transparent and reliable financial data.
  1. Accounting and Bookkeeping Services: Proper accounting and bookkeeping practices are vital for developers and promoters to maintain accurate financial records. Tax consultants and chartered accountants assist in setting up accounting systems and processes that comply with RERA requirements. They ensure that financial transactions are recorded correctly, provide guidance on chart of accounts, and help implement robust internal controls to safeguard financial integrity.
  1. GST Compliance: The implementation of GST has had a significant impact on the real estate sector. Tax consultants and chartered accountants play a crucial role in ensuring GST compliance for real estate transactions. They advise on GST registration requirements, assist in filing periodic GST returns, and guide developers and promoters on the correct classification of properties for GST purposes. Their expertise helps navigate the complexities of GST and ensures adherence to applicable regulations.
  1. Project Costing and Budgeting: Tax consultants and chartered accountants assist developers and promoters in accurate project costing and budgeting. They analyse project expenses, assess cost allocations, and provide insights on financial feasibility. By establishing realistic budgets and cost controls, they help optimize financial resources and enhance project profitability.
  1. Due Diligence and Financial Risk Assessment: Before entering into real estate transactions, due diligence is crucial to evaluate the financial viability and risks associated with a project. Tax consultants and chartered accountants conduct thorough financial due diligence to identify potential risks and assess the financial health of developers and promoters. They review financial statements, analyse cash flows, assess debt obligations, and provide insights to help stakeholders make informed decisions.
  1. Tax Advisory and Structuring: Tax consultants and chartered accountants offer comprehensive tax advisory services tailored to the real estate sector. They provide guidance on tax-efficient structures for real estate transactions, such as joint development agreements, lease agreements, and sale transactions. By considering the applicable tax laws and regulations, they help stakeholders minimize tax liabilities and optimize financial outcomes.
  1. RERA-related litigation and dispute resolution: With the increased focus on transparency and accountability, the number of disputes and grievances under RERA has risen. Professionals, particularly Chartered Accountants have a significant role to play in handling these cases and facilitating timely resolution through negotiation, mediation, or legal proceedings. Professionals proficient in RERA law can assist clients in filing complaints, preparing legal documentation, representing them before the RERA authorities, and seeking appropriate remedies.

Tax consultants and chartered accountants with expertise in RERA-related matters are essential partners for developers, promoters, and homebuyers. Their guidance ensures compliance with RERA regulations, maximizes tax efficiency, and contributes to the overall financial success of real estate projects.

F. Consultancy for Real Estate Developers and Promoters

Professionals with in-depth knowledge of the RERA Act can offer consultancy services to real estate developers and promoters, helping them navigate the complexities of project planning and compliance.

IV. Challenges and Best Practices

Professionals engaged in the practice of RERA law face certain challenges unique to this domain. Understanding these challenges and adopting best practices can enhance their effectiveness in serving clients and ensuring compliance with the RERA Act.

A. Challenges faced by Professionals in RERA Implementation

  1. Interpreting complex legal provisions: The RERA Act contains several intricate provisions that require a thorough understanding for proper implementation. Professionals must continually update their knowledge to interpret and apply these provisions effectively.
  2. Managing diverse stakeholder expectations: Professionals need to navigate the expectations of developers, buyers, and regulatory authorities while balancing legal compliance and practical considerations.

B. Best practices for Professionals in RERA Practice

  1. Staying updated with RERA amendments and notifications: RERA is a dynamic field, with amendments and notifications regularly introduced. Professionals must stay abreast of these changes to provide accurate and up-to-date advice.
  1. Building expertise in RERA law through continuous learning: Professionals should engage in continuous learning and skill development programs specific to RERA. This ensures they remain at the forefront of the latest developments and legal interpretations in the domain.

V. Conclusion

A. Summary of the Importance of RERA for Professionals

The Real Estate (Regulation and Development) Act, 2016 (RERA), has emerged as a game-changer in the Indian real estate sector, bringing about significant changes and introducing a new area of practice for professionals. RERA has introduced transparency, accountability, and consumer protection, making it imperative for professionals to understand and navigate the Act effectively. The importance of RERA for professionals can be summarized as follows:

  1. Enhanced Consumer Protection: RERA provides a robust framework for safeguarding the interests of homebuyers, ensuring transparency in real estate transactions, and offering remedies for non-compliance. Professionals play a crucial role in assisting buyers and developers in understanding their rights and obligations under RERA, thereby promoting trust and confidence in the real estate market.
  1. Legal Advisory and Compliance: RERA has created a demand for professionals with expertise in RERA law. Lawyers, tax consultants, chartered accountants, architects, and engineers now have an expanded scope of practice under RERA. They provide legal advisory services, ensure compliance with RERA regulations, and assist in project planning and execution while navigating the complexities of the Act.
  1. Dispute Resolution: RERA has established a structured grievance redressal mechanism to address disputes between homebuyers and developers. Professionals specializing in RERA law can represent clients in dispute resolution proceedings, offering a fair and efficient resolution to conflicts and contributing to the timely delivery of real estate projects.
  1. Financial Management and Auditing: RERA mandates financial reporting, project audits, and adherence to strict financial standards. Professionals such as chartered accountants and tax consultants play a pivotal role in ensuring accurate financial reporting, optimizing tax efficiency, and conducting compliance audits, thereby promoting financial transparency and accountability in the real estate sector.

B. Future Prospects and Growth in the RERA Practice Area

The future prospects for professionals in the RERA practice area are promising. As the implementation of RERA continues to evolve, professionals with specialized knowledge and expertise will be in high demand. Here are some key factors contributing to the growth of the RERA practice area:

  1. Increasing Awareness and Compliance: With the growing awareness among developers, promoters, and homebuyers about the benefits of RERA, the demand for professionals with expertise in RERA law will continue to rise. Professionals who can provide guidance on compliance, dispute resolution, financial management, and taxation under RERA will have significant opportunities to grow their practices.
  1. Expanding Scope of Services: The scope of services offered by professionals in the RERA domain is expanding. Professionals can provide a range of services, including legal advisory, compliance audits, financial reporting, taxation, project planning, and dispute resolution. This diversified scope allows professionals to cater to various needs within the real estate sector, opening up new avenues for growth and specialization
  1. Emerging Career Opportunities: The implementation of RERA has created a demand for professionals with specialized skills and knowledge in this field. This has led to the emergence of new career opportunities, such as RERA consultants, RERA compliance officers, and RERA dispute resolution experts. Professionals who can position themselves as experts in the RERA domain will find abundant opportunities for career advancement and growth.
  1. Continuous Updates and Learning: Given the dynamic nature of RERA, professionals must stay updated with the latest amendments, notifications, and legal developments. Continuous learning and professional development will be crucial for professionals to remain competitive and provide high-quality services to their clients. This ongoing learning process will contribute to the growth and sustainability of the RERA practice area.

In conclusion, the implementation of the RERA Act has not only transformed the real estate sector but has also created a significant impact on the professional landscape. Professionals who can navigate the complexities of RERA, offer specialized services, and adapt to the changing regulatory landscape will be well-positioned for success. With its focus on consumer protection, transparency, and accountability, RERA offers immense potential for professionals to contribute to the growth and development of the real estate industry in India and establish themselves as trusted advisors in the field.

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RERA CASE LAWS

1. Homebuyers cannot claim interest after signing cancellation deed, receiving refund: Karnataka RERA

Karnataka’s real estate regulator has held that homebuyers cannot claim interest on delayed refund amounts after signing a deed of cancellation.

The Karnataka Real Estate Regulatory Authority (KRERA) noted that as per the deed of cancellation, the amount refunded to the homebuyer was towards full and final settlement between the parties.

“In the powers conferred under Section 31 of the RERA Act, the complaint is hereby dismissed,” the regulator said in an order dated July 24, 2023.

As per the deed of cancellation, the parties agreed that all rights, liabilities and interest with respect to the property would be considered to have been settled between the parties. Accordingly, KRERA said the developer refunded the principal amount as final settlement, which the homebuyer accepted.

“Thus his claim for delayed interest is hit by the doctrine of estoppel and cannot be considered,” the regulator said. Estoppel is the principle that prevents one person from contradicting an action or statement from the past.

The case: In this case, homebuyer Ayush Sinha bought an apartment for Rs 1.55 crore in Godrej Reflection Phase 1 project in Sarjapura in Bengaluru in 2019. The apartment was supposed to be handed over in March 2023.

However, on a challenge by activists, the National Green Tribunal cancelled the environmental clearance for the project in July 2021 due to violation of buffer zone regulations and municipal laws. In August 2021, the homebuyer opted for a complete refund and executed the deed of cancellation the following month.

However, Sinha filed a complaint at KRERA, claiming that the developer did not respond to emails requesting payment of interest on the delayed refund.

  • Compliances under RERA
  • Rera alters project cost rule for AMC

In a recent development in Ahmedabad’s town planning procedures, the Gujarat Real Estate Regulatory Authority (Rera) has relieved the Ahmedabad Municipal Corporation (AMC) from seeking its opinion on project costs to calculate construction cess.

The issue revolved around the 1% state construction cess on the total project cost of a real estate development before the city civic authority grants building use permission (BU). “Developers sometimes understate project costs in their BU applications, resulting in a significant loss of revenue,” said an AMC official. In response, Rera requested AMC’s town planning department to seek its opinion on project costs to ensure accurate cess calculations.

On November 3, 2022, the AMC town planning department issued a circular mandating officials to consult Rera to determine the project costs. However, this new requirement led to an increase in Rera’s workload. The authority wrote to AMC on August 21, requesting the civic body to no longer seek project cost opinions.

On September 27, the town planning department issued a circular instructing officials to cross-verify the project cost mentioned by developers in both the BU permission and Rera application. After confirming there was no disparity in the project cost, officials were directed to calculate the 1% construction cess.

The circular also required officials to obtain a certified copy of the project cost submitted to Rera from the builder while accepting their BU permission application, thereby eliminating the need to seek Rera’s opinion on project cost.

We also published the following articles recently

Three real estate firms fined Rs 17.5 crore for RERA violations. The Telangana State Real Estate Regulatory Authority (TS RERA) has fined three real estate groups a total of Rs 17.5 crore for not adhering to the RERA Act. The groups facing penalties are Mantri Developers Pvt Ltd, Sahiti Infratec Ventures Pvt Ltd, and Sai Surya Developers Pvt Ltd. Sahiti Infratec Ventures Pvt Ltd has been instructed to pay Rs 10.7 crore for failing to register three of its projects with RERA. The penalties were imposed after a thorough review of each builder’s conduct and violations of the Act.103878114

Expedite filling RERA posts, HC tells stateThe Gujarat High Court has urged the state government to swiftly fill vacant positions in the Gujarat Real Estate Regulatory Authority Appellate Tribunal to avoid delays in the appointment process. The court’s remarks came after the appointment of the chairperson of the RERA appellate tribunal, which had been vacant for over two years. The court emphasized that such delays should not occur in the future. In other news, the Nashik Municipal Corporation has appointed seven garden inspectors, IP University will fill vacant law course seats based on entrance test scores, and the Orissa University of Agriculture and Technology plans to appoint faculty members for vacant positions.103879454

Interpretation / Process Segment

  • Buyers Can Opt Out If Builder Fails On Commitments

Section 19(4) of the RERA Act entitles allottees to a refund if the developer doesn’t comply with the terms of the sale agreement.

The National Consumer Disputes Redressal Commission (NCDRC) has ordered a hefty refund of Rs 33 crore (Rs 330 million), along with 12 per cent interest, to three flat buyers in World One project in Upper Worli (Lower Parel), south central Mumbai.

The developers were held liable for promoting the project without the requisite statutory approvals and for prolonged delays, exceeding four years, in handover.

While property buyers faced many issues earlier, the enactment of the Real Estate Regulatory Authority Act of 2016 (RERA Act) has led to a significant increase in transparency and accountability within the sector. The Act empowers homebuyers and allottees by granting them several rights.

Right to possess the property

According to Section 19 (3) of the RERA Act, buyers are entitled to claim possession of the property. Additionally, building associations are entitled to lay claim to common areas on the date of possession.

Homebuyers should check the BBA for a default clause (the provision in a contract that states what will happen if either party defaults or fails to hold up their end of the agreement) for anything that may be disadvantageous to them.

Right to refund

Section 19(4) of the RERA Act entitles allottees to a refund if the developer doesn’t comply with the terms of the sale agreement.

Says Mani Gupta, partner, Sarthak Advocates & Solicitors: “Under Section 18 of the RERA Act, an allottee is entitled to seek a full refund with interest for the period of delay.”

According to Ravi Bhasin, senior partner, AZB & Partners, the Supreme Court had ruled in a consumer complaint case that an individual can not be kept waiting indefinitely for the possession of her/his allotted property and is entitled to a refund as well as compensation.

The right to refund exists even if the buyer had consented to alterations in the project plan initially.

Access to documents

Section 19(5) of the RERA Act gives buyers the right to access all crucial documents (like No Objection Certificate), and plans (say, drawings) throughout the construction process.

Says Bhasin: “The purpose is to allow the buyer to analyse the project’s status and whether there are any implications on her decision to own a property in it.” If the developer does not comply, buyers can seek intervention under Section 35.

Verify all relevant documents before investing. Says Khosla: “Doing so ensures the project is legitimate and adheres to all key regulations. If the developer denies access to any document, treat it as a red flag.”

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  • RERA – Corporate Dose
  Sl.                                                        Corporate Update  Link  
1UP-RERA slaps Rs 3 crore penalty on Ansal API for fund misappropriationClick Here
2Real estate agents cannot operate from homes, commercial address must for registration: Delhi-RERA chairmanClick Here
3Builder jailed, family homeless after RERA seals his homeClick Here
4Telangana RERA issues showcause notices to real estate firmsClick Here
5SC issues notices to states which are yet to establish RERAClick Here
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