The 2016 Real Estate (Regulation and Development) Act, widely known as RERA, heralded a transformative movement towards a real estate sector characterized by enhanced accountability and transparency in India. In the wake of this pivotal legislation, Maharashtra has emerged as a trailblazer with the introduction of its own regulatory body, the Maharashtra Real Estate Regulatory Authority (MahaRERA), which has been instrumental in cementing a transactional framework that embodies both clarity and equity in dealings. The guidelines laid down by MahaRERA have significantly contributed to the establishment of a professional ethos, wherein meticulous care and ethical conduct are not merely advisable but are rigorously enforced.
According to data from the MahaRERA website, a striking number of registrations boast of Maharashtra’s lead: 43,435 projects and 45,839 real estate agents, the highest across Indian states. This article intends to provide an exhaustive exploration of the liabilities—or more precisely, the responsibilities—assigned to promoters under the aegis of the RERA Act, 2016. We specifically hone in on Chapter III, a vital section of the Act that articulates the roles and duties incumbent upon promoters within the real estate sphere.
Our analysis is particularly concentrated on Section 11, with the aim of unpacking its intricacies for our readership’s profound understanding, while also shedding light on the subsequent regulations enacted as a complement to this section.
SECTION 11 is the exclusive Section which deals with Promoter Functions and Duties for the Real Estate Project under Real Estate Regulation Act, 2016. This section is organized into six parts, which can be summarized as follows:
- Quarterly Up to Date of the Project
- Advertisement
- Duties at the time of Allotment of Units
- Responsibilities of Promoter
- Cancellation of Allotment
- Other Details as may be required
Sub Section 1 of Section 11 deals with the Update of Project Details on the RERA Web page and Quarterly Updates. This Sub Section must be Read along with Maha RERA Order No. 18/2021 Dt. 28/07/2021 further read with Order No.33/2022 Dt. 05/07/2022.Extract of the Section is Reproduced for Reference “(1) The promoter shall, upon receiving his Login Id and password under clause (a) of sub-section (1) or under sub-section (2) of section 5, as the case may be, create his web page on the website of the Authority and enter all details of the proposed project as provided under sub-section (2) of section 4, in all the fields as provided, for public viewing, including—(a) details of the registration granted by the Authority; (b) quarterly up-to-date the list of number and types of apartments or plots, as the case may be, booked; (c) quarterly up-to-date the list of number of garages booked; (d) quarterly up-to-date the list of approvals taken and the approvals which are pending subsequent to commencement certificate; (e) quarterly up-to-date status of the project; and (f) such other information and documents as may be specified by the regulations made by the Authority”
Subsection 2 of Section 11 addresses the content of advertisements or prospectuses, emphasizing that all details of the registered project, including the RERA registration number, must be clearly stated.
Subsection 3 of Section 11 Duties of Promoter at the Time of Allotment Should be
- Display all sanctioned plans, layout plans, along with specifications at the Project site.
- Providing a clear schedule with dates for project completion, including infrastructure provisions such as water, sanitation, and electricity.
Subsection 4 of Section 11 provide Responsibilities of the promoter, summarized interpretation are discussed below:
1. Promoter should adhere to all obligations, responsibilities and functions under the provisions of this Act, or the rules and regulations made thereunder
i. To the allottees as per the agreement for sale,
ii. To the association of allottees or competent Authority
till the conveyance of all the apartments, plots or buildings, as the case may be. The promoter is also bound by the warranty against structural defects or other defects for a period of five years, as stipulated under Subsection 3 of Section 14.
2. The Promoter shall be Responsible to obtain the completion certificate or Occupancy certificate and same shall be handed over to Allotees or association of allottees within the timeline mentioned in Section 17
3. The Promoter is required to obtain the lease Certificate if the Project is Developed is Leasehold Land. Here, the Promoter is himself liable for all the dues and charges regarding the respective land.
4. The Developer or Promoter shall be Responsible for providing and maintaining the essential service that too on reasonable charges till the maintenance of the project is taken over by Association of Allotees.
5. The Promoter is responsible for the formation of Association of Allotees or Society or Cooperative Society of the Allotees. Time Period for Formation of Association or Society or cooperative society is three months from the date when Majority (Interpreted as 51%) of the Allottees of the Units is booked on the Project.(Rule 9(1)(i) Maha RERA Rules)
6. The Promoter is required to execute a Registered Conveyance deed of Unit in favor of Allottee along with Undivided Proportion of Title for the Common areas to association of Allottees as per Section 17 of the Act.
7. Developers are required to settle all ongoing financial responsibilities associated with their real estate projects, such as taxes, utility charges, and loan interest, up until the point they transfer ownership to the Allottees or their collective association. However, if developers fail to clear these dues before the transfer, they remain legally obligated to fulfill these financial obligations. This responsibility extends beyond the transfer of property, encompassing any additional penalties incurred and potential legal costs arising from actions taken by creditors or authorities seeking payment.
8. When a developer agrees to sell a property, such as an apartment, plot, or building, through a formal agreement to sale, they must refrain from any further financial encumbrances, such as mortgages or liens, on that specific property after execution of Agreement to sale. This section ensures that the property remains free of any new debts or claims that could compromise the buyer’s interests. If, after entering into the sales agreement, the developer does indeed impose a mortgage or any other form of financial claim on the property, this act will not affect the Allotees rights. Even if there are existing laws that might allow such post-agreement encumbrances, they will not override the buyer’s entitlement as per the agreement to sale. The Section is clear that the Allottee right to the property is paramount and must be upheld, regardless of the developer’s subsequent actions or any conflicting legal provisions.
Subsection 5 of Section 11 provides that the promoter may only cancel allotments in accordance with the terms of the sale agreement, and the allottee may seek redress from the RERA authority if dissatisfied with the cancellation.
Subsection 6 of Section 11 obligates the promoter to maintain any additional details as specified by the Authority in the future.
Conclusion
In summary, Section 11 of the RERA Act, reinforced by MahaRERA’ s guidelines, is instrumental in demarcating the promoters’ duties, advocating for transparency, and protecting the allottees’ rights throughout the real estate transaction process. The comprehensive framework of obligations it establishes—from project reporting to the prohibition of post-agreement encumbrances—underscores a commitment to upholding the allottee’s interest. For industry professionals, a thorough understanding of these provisions is not merely a regulatory requirement but a benchmark of ethical practice, ensuring that the integrity of India’s real estate industry is maintained at the highest standard.
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