Brief on Real Estate (Regulation and Development) Act, 2016- Part 1

PART-1 

THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016

Purpose of the Act: To established Real Estate Regulatory Authority for the followings:

1. regulation and promotion of the real estate sector

2. to ensure sale of plot, apartment or building, or sale of real estate project,

3. to protect the interest of consumers in the real estate sector,

4. to establish an adjudicating mechanism for speedy dispute redressal,

5. to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating office.

Overview

Notification date:  25th March 2016
Total Chapters: 10 Chapters.
Total Sections:  92 Sections

Chapter-1- Preliminary

Section -1: It extends to the whole of India except the State of Jammu and Kashmir.

Section -2:  Definitions

Relevant Definitions

Section -2(f): Appellate Tribunal:  means the Real Estate Appellate Tribunal established under section 43.

Section -2(G): appropriate Government:  means-

6. the Union territory without Legislature, the Central Government;

7. the Union territory of Puducherry, the Union territory Government;

8. the Union territory of Delhi, the Central Ministry of Urban Development;

9. the State, the State Government;

Section -2(i): Authority:  means the Real Estate Regulatory Authority established under sub-section (1) of section 20;

Section -2(l): Chairperson:  means the Chairperson of the Real Estate Regulatory Authority appointed under section 21;

Section -2(m): Commencement Certificate:  means-

1. the commencement certificate,

2. or the building permit

3. or the construction permit,

by whatever name called issued by the competent authority to allow or permit the promoter to begin development works on an immovable property, as per the sanctioned plan;

Section -2(p): Competent authority:  means

1. the local authority or

2. any authority created or established under any law for the time being in force by the appropriate Government which exercises authority over land under its jurisdiction, and has powers to give permission for development of such immovable property;

Section -2(zm): Real estate agent:  means any person, who negotiates or acts on behalf of one person in a transaction of transfer of his plot, apartment or building, as the case may be, in a real estate project, by way of sale, with another person or transfer of plot, apartment or building, as the case may be, of any other person to him and receives remuneration or fees or any other charges for his services whether as commission or otherwise and includes a person who introduces, through any medium, prospective buyers and sellers to each other for negotiation for sale or purchase of plot, apartment or building, as the case may be, and includes property dealers, brokers, middlemen by whatever name called;

Section -2(zn): Real Estate Project:  means

1. the development of a building or

2. a building consisting of apartments,

3. or converting an existing building

4. or a part thereof into apartments,

5. or the development of land into plots or apartment, as the case may be, for the purpose of selling all or some of the said apartments or plots or building, as the case may be, and includes the common areas, the development works, all improvements and structures thereon, and all easement, rights and appurtenances belonging thereto;

Chapter-2

Registration of Real estate agent & Real Estate Project

Section -3: Prior registration of real estate project with real estate authority.

1. No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act:

Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of 3 months from the date of commencement of this Act:

Provided further that if the Authority thinks necessary, in the interest of allottees, for projects which are developed beyond the planning area but with the requisite permission of the local authority, it may, by order, direct the promoter of such project to register with the Authority, and the provisions of this Act or the rules and regulations made thereunder, shall apply to such projects from that stage of registration.

2. Exemption to Sub section 1

The following projects do not require to be registered under the Act:

Area of land does not exceed 500 Sq. Meters

No. of apartments does not exceed 8

In case of Renovation/ Repair/Re-development

Section-4: Application for Registration of real estate projects

Step-1

Applicant has to file an application for registration with RERA in prescribed form along with prescribed fees and documents.

Step-2

Application for registration must be either approved or rejected within a period of 30 days from the date of application by the RERA.

Step-3

On successful registration, the promoter of the project will be provided with a registration number, a login id and password for the applicant.

Documents enclosed with Application

• a brief detail of his enterprise including its name, registered address, type of enterprise (proprietorship, societies, partnership, companies, competent authority), and the particulars of registration, and the names and photographs of the promoter;
• a brief detail of the projects launched by him, in the past five years, whether already completed or being developed, as the case may be, including the current status of the said projects, any delay in its completion, details of cases pending, details of type of land and payments pending
• an authenticated copy of the approvals and commencement certificate from the competent authority obtained in accordance with the laws as may be applicable for the real estate project mentioned in the application, and where the project is proposed to be developed in phases, an authenticated copy of the approvals and commencement certificate from the competent authority for each of such phases;
• the sanctioned plan, layout plan and specifications of the proposed project or the phase thereof, and the whole project as sanctioned by the competent authority
• the plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof including firefighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy;
• the location details of the project, with clear demarcation of land dedicated for the project along with its boundaries including the latitude and longitude of the end points of the project;
• proforma of the allotment letter, agreement for sale, and the conveyance deed proposed to be signed with the allottees
• the number, type and the carpet area of apartments for sale in the project along with the area of the exclusive balcony or verandah areas and the exclusive open terrace areas apartment with the apartment, if any;
• the number and areas of garage for sale in the project;
• the names and addresses of his real estate agents, if any, for the proposed project;
• the names and addresses of the contractors, architect, structural engineer, if any and other persons concerned with the development of the proposed project;
• a declaration, supported by an affidavit, which shall be signed by the promoter or any person authorised by the promoter.

Section 5: Grant of registration

On receipt of the application, the Authority shall within a period of thirty days-

• grant registration subject to the provisions of the Act and the rules and regulations made there under. A registration number, including a Login Id and password to the applicant for accessing the website of the Authority and to create his web page and to fill therein the details of the proposed project; or
• reject the application for reasons to be recorded in writing, if such application does not conform to the provisions of this Act or the rules or regulations made there under.Application shall not be rejected unless the applicant has been given an opportunity of being heard in the matter

If the Authority fails to grant the registration or reject the application, as the case may be, the project shall be deemed to have been registered, and the Authority shall within a period of seven days of the expiry of the said period of thirty days specified.

Section 6: Extension of registration

The registration granted may be extended by the Authority on an application made by the promoter due to force majeure, in such form and on payment of such fee as may be specified by regulations made by the Authority.

“Force majeure” shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project.

The Authority may in reasonable circumstances, without default on the part of the promoter, based on the facts of each case, and for reasons to be recorded in writing, extend the registration granted to a project for such time as it considers necessary, which shall, in aggregate, not exceed a period of one year.

Application for extension of registration shall not be rejected unless the applicant has been given an opportunity of being heard in the matter.

Section: 7 Revocation of registration

The Authority may, on receipt of a complaint or suomotu in this behalf or on the recommendation of the competent authority, revoke the registration granted, after being satisfied that—

• the promoter makes default in doing anything required by or under this Act or the rules or the regulations made there under;
• the promoter violates any of the terms or conditions of the approval given by the competent authority;
• the promoter is involved in any kind of unfair practice or irregularities.

The registration granted to the promoter shall not be revoked unless the Authority has given to the promoter not less than thirty days’ notice, in writing, stating the grounds on which it is proposed to revoke the registration, and has considered any cause shown by the promoter within the period of that notice against the proposed revocation.

The Authority may, instead of revoking the registration, permit it to remain in force subject to such further terms and conditions as it thinks fit to impose in the interest of the allottees, and any such terms and conditions so imposed shall be binding upon the promoter.

The Authority, upon the revocation of the registration-

Debar the promoter from accessing its website in relation to that project and specify his name in the list of defaulters and display his photograph on its website and also inform the other Real Estate Regulatory Authority in other States and Union territories about such revocation or registration;

Facilitate the remaining development works to be carried out in accordance with the provisions of section 8;

Direct the bank holding the project back account to freeze the account, and thereafter take such further necessary actions, including consequent de-freezing of the said account, towards facilitating the remaining development works in accordance with the provisions of section 8;

• To protect the interest of allottees or in the public interest, issue such directions as it may deem necessary.

Section:8 Obligation of authority

Upon lapse of the registration or on revocation of the registration under the 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

The direction, decision or order of the Authority shall not take effect until the expiry of the period of appeal provided under the provisions of the Act:

In case of revocation of registration of a project under the Act, the association of allottees shall have the first right of refusal for carrying out of the remaining development works.

Section:9 Registration of Real Estate Agent

1. 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 be prescribed.

2. The Authority shall, within such period, in such manner and upon satisfying itself of the fulfilment of such conditions, as may be prescribed—

(a) grant a single registration to the real estate agent for the entire State of Union territory, as the case may be;

(b) reject the application for reasons to be recorded in writing, if such application does not conform to the provisions of the Act or the rules or regulations made there under:

Application shall not be rejected unless the applicant has been given an opportunity of being heard in the matter.

Whereon the completion of the period prescribed under the act, if the applicant does not receive any communication about the deficiencies in his application or the rejection of his application, he shall be deemed to have been registered.

Every real estate agent who is registered as per the provisions of this Act or the rules and regulations made there under, shall be granted a registration number by the Authority, which shall be quoted by the real estate agent in every sale facilitated by him under this Act.

Every registration shall be valid for such period as may be prescribed, and shall be renewable for a period in such manner and on payment of such fee as may be prescribed.

Where any real estate agent who has been granted registration under this Act commits breach of any of the conditions thereof or any other terms and conditions specified under this Act or any rules or regulations made there under, or where the Authority is satisfied that such registration has been secured by the real estate agent through misrepresentation or fraud, the Authority may, without prejudice to any other provisions under this Act, revoke the registration or suspend the same for such period as it thinks fit:

Provided that no such revocation or suspension shall be made by the Authority unless an opportunity of being heard has been given to the real estate agent.

Section:10 Functions of Real Estate Agent

Every real estate agent which is not registered with the Authority shall not facilitate the sale or purchase of any plot, apartment or building, as the case may be, in a real estate project or part of it, being sold by the promoter in any planning area. So, firstly they require to register themselve with the authority

Every real estate agent maintain and preserve such books of account, records and documents as may prescribed.

Every real estate agent not involve himself in any unfair trade practices, namely:—

1. falsely represents that the services are of a particular standard or grade;

2. represents that the promoter or himself has approval or affiliation which such promoter or himself does not have;

3. makes a false or misleading representation concerning the services;

permitting the publication of any advertisement whether in any newspaper or otherwise of services that are not intended to be offered.

Every real estate agent shall facilitate the possession of all the information and documents, as the allottee, is entitled to, at the time of booking of any plot, apartment or building, as the case may be and discharge such other functions as may be prescribed.