Tag: RERA NEWSLETTER

RERA Newsletter: Latest Updates and Case Laws

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
  • 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.

Monthly Corporate Real Estate Regulatory Authority (RERA) Newsletter for April, 2023

  • Papers forged, Haryana-Rera revokes real estate agent’s registration

The Haryana Real Estate Regulatory Authority (H-Rera) has revoked the Rera registration certificate of a real estate agent after it found that he submitted forged documents at the time of application. It has also initiated an inquiry into the matter.

Under the Real Estate (Regulation and Development) Act 2016, it is mandatory for a real estate agent to obtain a Rera registration number. The applicant has to submit documents, including that of commercial office space — self-owned or rented — as address proof duly certified by the district revenue department at time of applying.

According to H-Rera officials, agent Vineet Kejriwal forged the documents with mala fide intention amounting to a serious offence, so his registration number was revoked. Kejriwal was registered as a real estate agent with the H-Rera vide registration number RC/HARERA/GGM/1 697/1292/2022/65 dated April 2022.

As per the provisions stated in sections 7 and 9 of the Act, if the Authority is satisfied that the registration has been secured by the real estate agent through misrepresentation or fraud, it may revoke the registration or suspend the same.

“No one is above the law. Three stakeholders of Rera — promoter, allottee and agent — are duty bound to follow the mandate placed in the Act,” said the Authority, adding the Act has to be followed in letter and spirit.

  • RERA Act Must For All House Building Co-Op. Societies: Joint Secretary

E. Shivarudrappa, Joint Secretary of Karnataka Real Estate Regulatory Authority (RERA), has said, ‘Following the pending hearing in the High Court, Real Estate (Regulation and Development) Act — RERA Act — is applicable to all the House Building Cooperative Societies in the State.’

Shivarudrappa addressed the gathering during one-day workshop for CEOs of House Building Cooperative Societies in the district on ‘The key points of RERA Act applicable for House Building Cooperative Societies’, organised jointly by Karnataka State Co-operative Federation LTd., District Cooperative Federation and Cooperation Department, at a private hotel here on Mar. 21.

In the year 2017, a total of 22 House Building Cooperative Societies in the State had moved High Court. Likewise, across the country, 25 House Building Cooperative Societies including Real Estate promoters and companies had moved High Court in their respective States, challenging the applicability of RERA Act. Later, Supreme Court amalgamated all the cases and directed Mumbai High Court to conduct the hearing. The Mumbai High Court quashed all the applications, upholding RERA Act. Even if the disputes rose, provision was made to file the case at High Courts of respective States.

Following the provision, 22 House Building Cooperative Societies in the State have continued to argue the case, added Shivarudrappa.

RERA Act was implemented by Central Government in the year 2016, which is applicable to all the States of the country, except Jammu and Kashmir. In addition to this, State Government too has implemented Karnataka Real Estate (Regulation and Development ) Act in the year 2017, said Shivarudrappa.

‘6,000 realty projects registered’

Till date, 6,000 real estate projects in the State have been registered with RERA. Besides, 23 House Building Cooperative Societies have also registered with RERA, with highest among them from Mysuru. —E. Shivarudrappa, Joint Secretary, RERA

To read more: Click Here

  • HARERA revokes agent’s RERA registration obtained on forged documents

The Haryana real estate regulatory authority (HARERA), Gurugram, has revoked the RERA registration of real estate agent Vineet Kejriwal after it found that the documents submitted to the authority at the time of applying for registration were forged.

The HARERA has also marked an inquiry into the matter taking instant cognizance of the complaint in this regard.

The RERA Act 2016 mandates that to obtain RERA registration number to work as real estate agent the applicant has to produce or submit documents such as of commercial office space – self owned or rented – as address proof duly certified by the district revenue department at time of applying for the same.

In this regard agent, Vineet Kejriwal forged the documents with mala fide intention amounting to a serious offence and revocation of his registration number or certificate by the issuing authority, HARERA, Gurugram. As per the provisions stated in Sections 7 & 9 of the Real Estate (Regulation and Development) Act 2016: if the authority is satisfied that the registration has been secured by

the real estate agent through misrepresentation or fraud the authority may revoke the registration or suspend the same.

  • Homebuyers flag issues with Bengal RERA panel

Pan-India homebuyers’ body, the Forum for People’s Collective Efforts (FPCE), has raised concerns over formation and structure of the West Bengal housing department’s committee for implementation of the Real Estate (Regulation & Development) Act, 2016 and the West Bengal Real Estate (Regulation & Development) Rules, 2021.

The state government had last week constituted a nine-member West Bengal State Working Committee on WBRERA. The committee includes two members from the state government’s housing department, three from the West Bengal real estate regulatory authority and four real estate developers operating in the state.

  • UP Rera Warns Of Freezing Bank Accounts of Truant Promoters Of Lapsed Real Estate Projects

The Uttar Pradesh Real Estate Regulatory Authority (Rera) has warned of freezing the bank accounts of promoters who were absent from the review of lapsed real estate projects on March 15, 2023, and before.

UP Rera has held many such meetings previously in order to take stock of such lapsed projects. Allegedly, seven developers – Rudraksh Developers Private Limited, Skynet Infraventures Pvt. Ltd., SNG Developers Ltd etc have been regularly absent from such meetings.

Rajesh Kumar Tyagi, Secretary of the UP RERA, has stated that the bank accounts of the promoters of projects who are regularly absent from these review meetings may now be frozen.

UP Rera is also considering prohibiting a sale and purchase agreement (SPA) for such lapsed projects. SPAs bind a buyer and seller to buy and sell products and services, respectively.

According to the real estate regulator, such promoters may also be prohibited from registering new projects.

“The project can be ordered to stop the sale as well as the purchase of units, In future, registration of new projects of such promoters may also be completely barred,“ he says. Apparently, there are several such projects whose completion date has expired that the UP Rera is now reviewing.

“It is mandatory for all real estate promoters to comply with the RERA rules otherwise there will be no delay in taking strict action as per the rules by the Authority. UP RERA is continuously taking tough decisions against promoters who are insensitive to the interests of home buyers,” the regulatory authority said. To read more: Click Here

RERA CASE LAWS

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

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.

In Kalypso Court’s case, out of the 274 buyers, 152 took matters into their own hands and came forward to form an association called the Progressive Welfare Society.

However, they had neither the expertise to hire contractors to get the incomplete work done nor the finances to pay the contractors. The total cost to complete the remaining work stood tall at Rs 134.15 crore and the amount that was due to the 274 buyers was Rs 90.9 crore. The unsold 30 units could have fetched around Rs 25.06 crore. So, the project had a net negative cash flow between Rs 18 crore and Rs 19 crore.

That is when the association approached UP RERA in 2019 and acting on the case, UP RERA proceeded to devise a plan to complete the balance development work of the project under Section 8 of RERA. It chose the consensus route wherein a mechanism was drawn up in 2020 under which the project was proposed to be completed with the cooperative effort of the builder and the buyers’ association.

In the real estate circle, it has become popular as the “Kalypso model”, he says. “We are making a similar approach in about a dozen other cases,” Paliwal adds.

Venket Rao, legal advisor of the UP RERA and the head of Intygrat Law Offices, says that it was a great experience to advise the concerned parties on the entire effort.

“I think the Kalypso Court order in 2020, based on which the project got completed, has become a precedent for the rest of the projects. It was a novel effort to bring out the reconciliatory and joint effort of the builder and the association under the stewardship of the project management committee of the Authority (UP RERA),” says Rao. 

He says that such actions under Section 8 of the RERA repose a lot of faith in the regulator which has been taking a lot of flak for years of the mess created by others.

2. Suresh V. Swamy Vs. L&T Limited 2018(4) ADJ 406

This is one of the landmark judgement which addressed few of the important questions related to RERA.

The facts of the case was that the complainant had paid full consideration of the flat and after the failure on the part of the promoter, it is expected that the promoter pays the interest on the payment, the agreement of sale was signed between the parties and it was agreed that delivery be made on any date in September,2017.

After this the project in question received it occupancy certificate and a revised date was confirmed as 31st December, 2018 as the new date for completion of the project. This case answered few very important issues with regard to the Act.

Can it be understood that jurisdiction under the Act is co extensive with the project registration?- Answering to this the court said that interpreting section 5(3) we can understand that provisions of the act are applicable after the gaining of occupancy certificate also. It can be understood as the permission which is granted is subject to the time period declared by Sc 4(2)(1)(c).

If for example it is accepted that after getting the occupancy certificate the registration lapses, does that mean that authority have no jurisdiction till the completion of Project?- Here the court discussed few important provisions of the Act. Firstly, it is the obligation of the concerned authority to make sure that they have to oversee the work left until everything is completed, this has been given under Section 8. Secondly, it is the duty of the promoter to do away with any structural deformity that might come up within 5 years and this must be done at a limitation of 30 days. If the promoter fails to perform this duty then he must give compensation in regard to the same. Thirdly, there are certain documents that are required to be given by the promoter within a period of 30 days and these include registered conveyance deed, plans etc. If not done within a stipulated time then he will made liable. Fourthly, Sc 33 casts a duty on Authority to oversee that the promoter performs his duties and it also casts a jurisdiction on itself for any obligation not fulfilled by the promoter. Fifthly, any complainant aggrieved by the acts of the promoter may file a complaint under section 31 and if really a cause of action arises then under 79 of the Act, the authority retains its right of jurisdiction. So this concludes the question and it has been clarified that the jurisdiction remains even after getting a occupancy certificate or even after possession is offered.

Whether the provisions of this Act can be applied to agreements signed prior to the implementation of the Act? – Answering this court went to the case of Neelkamal Realtors Suburban Pvt. Ltd v/s Union of India, where they said that application of section 18 will be applicable to cases even where the agreements were signed prior to the coming of this act. The Hon’ble court suggested that the application of section 3, 6,8 and 18 have retroactive powers and they can be invoked.

If for instance there is a clause in the agreement which prohibits the authority that is it bars the authority from using its jurisdiction, can such arbitration clause exists in the first place?. To answer this question reliance was placed on HDFC Bank Ltd vs Satpal Singh Baxi where it was held that if there are certain special enactment then they cannot be overridden and such enactments are not subject to arbitral proceedings. Applying the same principals here also because the case arose out of dispute out of section 18 which provides for special powers to the RERA forum to adjudicate on the issue and such issue cannot be transferred to the Arbitral tribunal.

Whether Section 18 of RERA is mandatory or optional?. So once the matter comes for consideration the allottee has two option either he can stay and until the completion of the project and get interest for the amount of consideration he paid for the space or he can ask for repayment of his amount.

The word used in section 18 is ‘shall’ which makes it a mandatory provision and it casts an obligation to pay on the promoter to pay in case of default on his part.

If for example the promoter resorts to changing the date of project, would he still be expected to pay interest?. The court answered this in an affirmative way, it said that though it’s a discretion of the promoter to change the date of completion but this does not in any way mean that this mean re writing of contract. Once the date of delivery is fixed it cannot be changed and if the promoter fails to complete that obligation he shall be required to pay.

Vishal Arya vs. Unitech Limited. First Appeal No. 617 of 2013.

The case here involves the concept of ‘force majeure’. Force Majeure refers to happening of an uncertain event which makes it difficult or impossible for the parties to perform their contractual obligation.

Here in this case the issue was that the complainant had already paid the entire amount of consideration due for possession of flat and a fixed date of delivery was given to him, after this there was delay on the part of the promoter in giving the delivery of the flat.

However the construction work has not even started so thereby the complainant approached the forum that either be delivery be given to him or the amount he paid must be refunded along with interest for all these months.

Unitech argued that they delay was caused due to unforeseen circumstances and that it is attributed to force majeure so it’s beyond his control hence the question of compensation does not comes up.

The forum rejected this argument and said that Unitech is unnecessary benefits of the clause, there are certain requirements that are needed to be fulfilled before force majeure clause can be invoked and the present case is not one of those hence they are required to refund the entire amount along with interest and also an amount towards the mental distress that they gave.

Compliances under RERA

  1. All real estate developers in Maharashtra are required to register their projects with Maha-RERA. The registration process involves submitting certain documents and details about the project, such as the layout plan, specification of materials, and the status of land titles.
  2. RERA provides a mechanism for homebuyers to seek compensation for any delays or defects in the construction of their units. If the developer fails to rectify the defects within a reasonable time, the homebuyer can seek compensation from the developer.
  3. If the developer cannot complete the project, RERA provides a mechanism for homebuyers to seek a refund of their investments.
  4. Every promoter shall make an application to the authority for registration of real estate project. The projects that are ongoing on the date of commencement of this act and for which completion certificate have not been issued have to get registered with RERA. If real estate project fails to register a property, it will attract penalty.
  5. As per RERA regulation, the builder or developer is required to take all the necessary approvals and insurance, as required by State laws.

Interpretation Section

  • Section 8: Obligation of Authority consequent upon lapse of or on revocation of registration.

What is the Obligation of Authority consequent upon lapse of or on revocation of registration under section 8 of The Real Estate (Regulation and Development Act, 2016). Obligation of Authority consequent upon lapse of or on revocation of registration is defined under Section 8 of the Act. Provisions under Section 8 are:

  • Upon lapse of the registration or on revocation of the 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 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:
  • 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.

RERA – Corporate Dose

  Sl.                                                        Corporate Update  Link  
      1Maharashtra RERA issues 19,539 show cause notices to realtors   Under Section 11 of RERA Act, it is mandatory to upload fresh details by concerned registered project developers every three months. MahaRERA found that these developers failed to update information. Saying in a statement that the decision has been taken in the larger interest of the common man and the real-estate sector, the state government has decided to suspend the order issued on February 4 and implement the same from April 15.      Click Here
                                                      2RERA and NCDRC Are Finally Coming to the Aid of Hapless Home-buyers   Six years after the Real Estate (Regulation and Development) Act (RERA) came into existence, a series of decisions is finally working in favour of home-owners. What is interesting, though, is that many positive orders have come from consumer courts rather than the realty regulator. But regulatory action from state regulators has also begun to gather momentum, especially after the pile up of adjudication cases has turned unmanageable because developers have been flouting the stringent safeguards and disclosure rules of RERA with impunity.                                                            Click Here
        3MahaRERA initiate action against eight more in Pune for advertising unregistered projects The Maharashtra Real Estate Regulatory Authority (MahaRERA) has once again initiated suo motu action against 25 projects across the state that have been advertised without registration. Notices have been issued to the developers, said officials on Thursday. Pune has the second highest number of violations in this regard. In the latest batch, most getting notices are from Mumbai (16), followed by Pune (8) and Nashik (7); these are followed by Aurangabad (5) and Nagpur (3).        Click Here
      4Homebuyers concerned over no representation in West Bengal RERA implementation committee.   The state government had last week constituted a nine-member West Bengal State Working Committee on WBRERA. The committee includes two members from the state government’s housing department, three from the West Bengal real estate regulatory authority and four real estate developers operating in the state.    Click Here
        5Bombay HC restrains Avarsekar Realty from selling unsold flats across projects   Bombay high court recently restrained a builder, Avarsekar Realty Pvt Ltd, from selling any of its unsold flats as on date in a proposed plush 42-storey highrise at Mahim and its other projects till further orders.   The court passed the interim order and adjourned to March 27 a civil contempt plea filed by an advocate and his wife who had booked a flat in Shrishti Sea View in Mahim in January 2012.        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.

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
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  • 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.