Real estate has always been an attractive place for all stakeholders whether in terms of investment, profession, or end-users. The country underwent a massive revolutionary change in 2016 with the enactment of RERA.
It stands for the Real Estate (Regulation and Development) Act, 2016 that is in commencement since 1st May 2017, it is among such few pieces of legislation that has achieved an effective implementation and making its enacting objective reality in a span of just four years. In exercise of the power granted under section 20 of the act, so far there are 21 out of 28 and 3 Union Territories such as Delhi, Chandigarh, Pondecherry out of 8 UTs have set up fully functioning Real Estate Regulatory Authority (RERA) to govern their respective territories.
These authorities are conferred with power to monitor the real estate project of the concerned states. For boosting transparency and effectiveness the act recognizes certain procedural compliance and rights and duties of the key players of RERA that are Allottees (buyers), Real Estate Agents, and Real Estate developers (Promoters/builders).
In order to accelerate equal growth for all stakeholders, the Real Estate (Regulation and Development) Act, 2016 i.e, RERA has conferred certain duties and responsibilities upon its key players in terms of mandatory compliance.
Transparency being the foundation of RERA, it has mandated compulsory registration of the Real Estate Project by the Promoters/real estate developers.
Who is exempted from registering the project?
1. The real estate the project proposed to be built on land not exceeding 500 sq. mtr or where the number of apartments in the project does not exceed 8 inclusive of all phases
2. The completed real estate project in the sense such project that has to receive a completion certificate prior to the commencement of the act
3. The real estate project was undertaken for the purpose of renovation, and redevelopment that does not involve selling or new allotment of apartments, plots, or buildings.
Apart from the above-exempted category of the project, the rest have to acquire registration through the Real Estate Regulatory Authority (hereinafter “Authority”) set up in the concerned state/ UT in order to be eligible for marketing the same.
The registration process is completely online, however, the promoter has to acquire a certain document and information that is to be submitted along with registration requests on the online portal maintained by the concerned authority.
The list of mandatory documents and information is as below:
1. Name, photo of promoter as well as details of his enterprise, its type, registered address, particular of enterprise’s registration
2. Details of previous real estate project launched by the promoter (completed, under development), delay if any, pending litigations, types of land, pending payments etc
3. All approvals and commencement certificates obtained through competent authority concerning the project (including approvals if the project is being developed in phases)
4. Sanctioned plan by the competent authority, layout plans along with specifications & phases
5. Development plan including all proposed facilities
6. Location of the project and details of land demarcated for the same
7. Proforma of the allotment letter, agreement for sale, conveyance deed to be registered with the allottee
8. Apartment details to be offered for sale including numbers, types, carpet area, area of the balcony, area of the verandah, open terrace areas apartments
9. Garage for sale – numbers, and area etc.
10. Real estate agents, their numbers, and address
11. Declaration under section 4(2)(l) [the format of such declaration is provided in Form ‘B’ contained under the Maharashtra Real Estate (Regulation and Development)(Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest, and Disclosures on Website) Rules, 2017 and can be accessed at https://maharera.mahaonline.gov.in/]
12. PAN card
13. Details of chairman, partners, directors such as name, photos, contact number and addresses etc.
14. Legal titled report authenticated by practicing advocate
15. Collaboration/development agreement/ joint development agreement between the promoter and landowner (if the promoter is not the owner of the land)
16. Encumbrances certificate
17. Sanctioned plans containing FSI/TDR and other entitlements, proposed plan, proposed layout plan, proposed and sanctioned FSI
18. Proposed and sanctioned number of buildings/wings, floors
19. Aggregate area in sq. meters, number of covered parking spaces
20. Details of Architecture and Design Standards, Type of Construction Technology, Earthquake Resistant Measures
21. Nature of organization of allottees to be constituted
22. Membership details with MahaRERA registered Self Regulatory Authority
Additional information by the ongoing project:
23. Estimated cost for the completion of the project (Difference of total estimated cost and cost incurred)
24. Balance amount receivable from the sold apartments
25. Balance unsold area
26. Estimated amount proceeds from the unsold apartments
27. Estimated receivables from the ongoing project (addition of points 24 and 25)
28. Amount to be deposited in a designated account with a scheduled bank
The promoter first has to create a login id and password on the registration icon maintained on the authority online portal, after successful login he may proceed with submission of the above-given documents and information. This will be followed by the last and final step of payment of fees that will be calculated on the area of the land proposed to be developed at the rate of, rupees ten per square meter.
Once the application is submitted to the promoter, the concerned authority will initiate action within 30 days, they either grant registration or reject the application request.
If the registration is to be granted, the authority within 7 days of the expiry of 30 days will provide a 10 digit registration number along with login ID and password for accessing the website of the Authority and to create his web page and to fill therein the details of the proposed project. The authority will issue a registration certificate in Form ‘C’ under prescribed under Rule 6(a) of the Maharashtra Real Estate (Regulation and Development)(Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2017.
Whereas if the registration request gets rejected for want of non-confirming with the provision of the act, the same is to be intimated by issuing Form ‘D’ under Rule 6(b) of Maharashtra Real Estate (Regulation and Development)(Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest, and Disclosures on Website) Rules, 2017.
Duty after the grant of registration:
It should be noted mere seeking registration under RERA does not free the promoter from obligation conferred by the act as the true task starts after that.
Once the promoter is in the receipt of Login ID and Password he is required to create his webpage on the authority’s website. Subsequent to that for the purpose of the public viewing the promoter has to specify the below-mentioned details on the webpage:
1. Project registration details such as registration number, validity, etc
Quarterly update of below-mentioned details
2. Details of apartment/plots such as number, types booked
3. List of number of garages booked
4. Approval took that are pending subsequent to the commencement certificate
5. Status of the project pertaining to construction, grant of approvals, etc
6. Quarterly progress report
What is a quarterly progress report?
The MahaRERA vide order 18/2021 dated 30.07.2021 in order to implement the Financial Quarter Based Project Reporting System has now made mandatory for all the promoter to submit the quarterly progress report (hereinafter “QPR”) to be submitted within 7 days of every Quarter ends that is the 7th day of July, October, January, and April.
For the purpose of the quarterly update of July, the QPRis to be submitted by 15.08.2021 for all registered projects.
Content of QPR:
As an effort of inculcating accountability and professionalism the authority has provided strict observance of QPR compliance, in the event of failure to the same stringent action is proposed to be taken with the following steps.
Separate account under the Schedule Bank:
The act under section 4(2)(l)(D) requires the promoter to deposit in a scheduled bank, 70% of the amount realized for the real estate project from allottees by maintaining a separate account in such a bank. The amount so deposited could be withdrawn only to cover the construction and land cost of the concerned real estate project and is to be certified by an engineer, architect, and chartered account in practice.
The required certificates from professionals are as below:
1. First, from the project Architect certifying the percentage of completion of construction work of each of the building/wing of the project; (Form 1 under Regulation 3 of the MahaRERA General Regulations, 2017)
2. Second, a certificate from the Engineer for the actual cost incurred on the construction work of each of the buildings/wing of the project; (Form 2 under Regulation 3 of the MahaRERA General Regulations, 2017)
3. Third, a certificate from a practicing Chartered Accountant, for the cost incurred on construction cost and the land cost (Form 3 under Regulation 3 of the MahaRERA General Regulations, 2017)
He is required to get such designated separate accounts audited through a practicing chartered accountant within six months of the end of every financial year (Form 5 under Regulation 4 of the MahaRERA General Regulations, 2017).
Self-declaration to the Bank:
The promoter as additional compliance is required to submit quarterly a self-declaration to the bank wherein he is maintaining the designated separate account. The format of self-declaration is as below:
SELF – DECLARATION
I, Mr./Mrs. promoter of the ongoing project having MahaRERA Registration No. do hereby state and declare on solemn affirmation as under:
I say that 70% amount received from the allottee of the said project is deposited by me in a designated separate account and I am entitled to withdraw the said amount proportionate to the progress in the Real Estate Project.
I say that my withdrawals from my designated separate account No. in the quarter (April-June, July-September, October-December, January-March) of the year are proportionate to the progress of Real Estate Project and for withdrawal of the amount. I have obtained requisite certificates from the Project Architect, Engineer, and Practising Chartered Accountant.
I undertake to produce these certificates for inspection if required by the Bank/MahaRERA Authority.
signed & seal of the promoter.
The MahaRERA circular pertaining to a mandatory self-declaration to the bank can be accessed at https://maharera.mahaonline.gov.in/Upload/PDF/Self_Declaration_by_Promoters_to_Bank.pdf
Membership with the registered Self Regulatory Authority:
It now mandatory for the promoter seeking registration of the project with MahaRERA to acquire the membership of the MahaRERA registered self-regulatory authority who can be group/association/federation of promoters.
The list of registered SRO as below:
1. NAREDCOWEST Foundation
2. CREDAI-MCHI (Maharashtra Chamber of Housing Industry)
3. CREDAI- Maharashtra
4. BuildersAssociation of India Maharashtra State
5. Marathi Bandhkam Vyavsayik Association
6. Brihan Mumbai Developers Association
This registered SRO is assigned with below-mentioned functions and powers and the member-promoter is required to adhere to the same:
1. Ensuring and encouraging members for complying with Act and rules, regulations, orders, circulars made/issued thereunder
2. Carry out awareness and education activities among its members
3. Specify the standard of conduct for its members and implementing the same by its members.
4. Create governing norms which are not be in conflict with Rules, Regulations, Circulars and Orders of MahaRERA.
Statutory Obligations on part of promoter after registration:
Under section 11:
Subsection (2) requires that After obtaining the occupancy certificate and handing over physical possession to the allottees in terms of sub-section (1), it shall be the responsibility of the promoter to handover the necessary documents and plans, including common areas, to the association of the allottees or the competent authority, as the case may be, as per the local laws:
Under section 19:
Obligation pertaining to section 15 transferring real estate project to a third party:
Section 15 requires that obtainment of written consent from 2/3rd allottees and prior written approval of authority is necessary for the promoter so as to transfer a majority of his rights and liabilities concerning the real estate project to the third party.
Pursuant to the said provision the MahaRERA vide circular no. 24/2019 dated 04.06.2019 specified the detailed procedure to be observed by the promoter.
1. The promoter seeking transfer have to apply before authority with the written consent of 2/3rdallottees of the real estate project
2. The application for a change of promoter (prescribed under aforementioned circular) has to be the email to the Secretary, MahaRERA at the [email protected] being aware of potential transfer accruing from enforcement of mortgage
3. Informing all the allottees about the potential transfer
4. Within seven days once the transfer is effected, the financial institution, the creditor has to inform the allottees and Secretary, MahaRERA on [email protected] enforcement of security resulting in transfer
5. Such financial institution/creditor acting as new promoter has to apply for necessary correction in registration details
6. The application for necessary updation of information is accompanied with an undertaking by the new promoter undertaking that he will comply with the obligation concerning the agreement for sale between erstwhile promoter and allottees
The strict compliance under RERA has ensured robust and trustworthy mechanisms that have certainly enhance the confidence of stakeholders.