A Real Estate project can be advertised after registration with concerned real estate regulatory authority subject to compliance of the necessary directions as per the provisions of The Real Estate (Regulation and Development) Act, 2016 (RERA).
(1) The advertisement materials under RERA may include any materials describing the details of project which is marketed and advertised through any medium / mode –
(i) Short Message Service (SMS),
(ii) e-mails, hoardings,
(iii) prospectus, brochures,
(viii) social media platforms,
(ix) websites and/
(x) or any other forms of media.
(2) As per Section.11 (2) of RERA and as per the standard rule of practice of advertisement of real estate projects, it is recommended that the Promoter to adhere to the following guidelines to advertise the real estate project:
(i) Registration Number of the project must be displayed prominently in the advertisement materials apart from –
(ii) Website address of the Real Estate Regulatory Authority must be included.
(iii) All the pictures with any information in the advertisement materials must be clear and near actual without any false, misleading information.
(iv) Testimonials must be original and genuine.
(v) The Specifications as promised under the advertisement materials shall form part of Agreement for Sale.
(vi) The information being provided through advertisement materials should not contravene any provisions of the RERA – Sec 12
(vii) The project website has to updated periodically based on the progress of the development.
(viii) The Disclaimers must be appropriate and should not deny the responsibilities and duties and thereto contravene the provisions of RERA.
(3) Also prior to advertisement and marketing of the project by the Channel Partners and Agents, they should be registered with Real Estate Regulatory Authority and only thereafter they shall be entitled to advertise and market the project following all the guidelines as aforementioned.
(4) Marketing managers, Customer Relationship Managers, Sales Managers and Agents should be aware of the provisions of the RERA.
Further, Many state Authority has issued guidelines for advertisement of real estate projects, few are as below –
a. Andhra Pradesh Real Estate Regulatory Authority authorized stamp and where it must be shown in the advertisement materials of a real estate project. Please visit the following website of Andhra Pradesh Real Estate Regulatory Authority https://www.rera.ap.gov.in/RERA/Views/AdvertisementGuidelines.aspx for more details and information
b. TAMILNADU REAL ESTATE REGULATORY AUTHORITY
http://www.tnrera.in/# under Orders and Circulars
c. MAHARASHTRA REAL ESTATE REGULATORY AUTHORITY
d. Bihar Issued the guidelines
e. Punjab Public Notice on Advertisement
ADVERTISEMENT OF REAL ESTATE PROJECT –
DO’S AND DONT’S – note by CA.Vinay Thyagaraj – firstname.lastname@example.org
(5) Note that, in case of any veracity in the advertisement materials causing any loss and damage to the allottees / purchasers, then allottees / purchasers shall be compensated and are entitled to withdraw from the project wherein entire amounts has to be refunded with applicable interest and compensation. At such instance, the authority under Section.61 of RERA is also entitled to levy a penalty of upto 5% of the total project cost.
(6) The promoters can adhere to recommended guidelines as aforementioned, these guidelines are as per the provisions of the RERA and as per the standard rule of practice of advertisement. Please note that the concerned Real Estate Regulatory Authorities may come with standard guidelines.
(7) The Promoters must be very diligent while drafting the contents, disclaimers in the advertisement materials and not to make any false representations.
(8) Proper disclaimers may come to rescue in case of disputes or litigations, hence promoters are advised to mention the disclaimers by taking assistance of professionals
(9) Many a times the entire / part of the project may be promoted by the channel partners, DSA’s etc., All applicable guidelines under RERA shall applicable to those channel partners / agents / brokers – Sec 9, Sec 10 of the Act apart from Sec 12
(10) Promoters shall educate the such channel partners, brokers, agents before they appoint them to market, promoter the Real estate project
(11) Every marketing collaterals printed, distributed by such channel partners, brokers, agents shall be duly vetted by promoters before they print, distribute
(12) Penalties are huge under RERA for non-compliance. In march 2018, Maha RERA levied penalty of Rs.50.00 lacs on the promoter stating the RERA Registration displayed is not Prominently shown. Similar instances were found in other states also.
(13) Allottees may hold the promoter’s responsible for delivery of the project as per marketing collaterals shared during the booking / marketing / sales.
e.g, in one of the instance, promoter has shown the Italian marble for the lobby area, however he used low quality granite. Allottees were held the promoter responsible for the same. Promoter end up with removing all such granite and replaced with Italian Marble. This caused approx. Rs. 5.00 Crore costs for redoing the entire lobby work apart from delay in completing and handover to the allottees
Reference of advertisement / promotion in the Act
Sec 2 (a) “advertisement” means any document described or issued as advertisement through any medium and includes any notice, circular or other documents or publicity in any form, informing persons about a real estate project, or offering for sale of a plot, building or apartment or inviting persons to purchase in any manner such plot, building or apartment or to make advances or deposits for such purposes;
Sec (zl) “prospectus” means any document described or issued as a prospectus or any notice, circular, or other document offering for sale or any real estate project or inviting any person to make advances or deposits for such purposes;
Sec 3- Prior registration of real estate project with Real Estate Regulatory 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
Sec 7 – Revocation of registration – Due to
(A) the practice of making any statement, whether in writing or by visible representation which,—
(i) falsely represents that the services are of a particular standard or grade;
(ii) represents that the promoter has approval or affiliation which such promoter does not have;
(iii) makes a false or misleading representation concerning the services;
(B) the promoter permits the publication of any advertisement or prospectus whether in any newspaper or otherwise of services that are not intended to be offered;
Sec 11 – Functions and duties of promoter –
The advertisement or prospectus issued or published by the promoter shall mention prominently the website address of the Authority, wherein all details of the registered project have been entered and include the registration number obtained from the Authority and such other matters incidental thereto.
Sec 12 – Obligations of promoter regarding veracity of the advertisement or prospectus –
Where any person makes an advance or a deposit on the basis of the information contained in the notice advertisement or prospectus, or on the basis of any model apartment, plot or building, as the case may be, and sustains any loss or damage by reason of any incorrect, false statement included therein, he shall be compensated by the promoter in the manner as provided under this Act:
Provided that if the person affected by such incorrect, false statement contained in the notice, advertisement or prospectus, or the model apartment, plot or building, as the case may be, intends to withdraw from the proposed project, he shall be returned his entire investment along with interest at such rate as may be prescribed and the compensation in the manner provided under this Act.
Sec 14 – Adherence to sanctioned plans and project specifications by the promoter
(1) The proposed project shall be developed and completed by the promoter in accordance with the sanctioned plans, layout plans and specifications as approved by the competent authorities
(2) Notwithstanding anything contained in any law, contract or agreement, after the sanctioned plans, layout plans and specifications and the nature of the fixtures, fittings, amenities and common areas, of the apartment, plot or building, as the case may be, as approved by the competent authority, are disclosed or furnished to the person who agree to take one or more of the said apartment, plot or building, as the case may be, the promoter shall not make—
(i) any additions and alterations in the sanctioned plans, layout plans and specifications and the nature of fixtures, fittings and amenities described therein in respect of the apartment, plot or building, as the case may be, which are agreed to be taken, without the previous consent of that person:
Provided that the promoter may make such minor additions or alterations as may be required by the allottee, or such minor changes or alterations as may be necessary due to architectural and structural reasons duly recommended and verified by an authorised Architect or Engineer after proper declaration and intimation to the allottee.
Sec 31(1) – Filing of complaints with the Authority or the adjudicating officer
Any aggrieved person may file a complaint with the Authority or the adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder against any promoter allottee or real estate agent, as the cae may be.
Explanation.—For the purpose of this sub-section “person” shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force.
The form, manner and fees for filing complaint under sub-section (1) shall be such as may be specified by regulations
Penalty for noncompliance –
Sec 59 (1) If any promoter contravenes the provisions of section 3, he shall be liable to a penalty which may extend up to ten per cent. of the estimated cost of the real estate project as determined by the Authority.
(2) If any promoter does not comply with the orders, decisions or directions issued under sub-section (1) or continues to violate the provisions of section 3, he shall be punishable with imprisonment for a term which may extend up to three years or with fine which may extend up to a further ten per cent. of the estimated cost of the real estate project, or with both.
Sec 60 – If any promoter provides false information or contravenes the provisions of section 4, he shall be liable to a penalty which may extend up to five per cent. of the estimated cost of the real estate project, as determined by the Authority.
Sec 61 – If any promoter contravenes any other provisions of this Act, other than that provided under section 3 or section 4, or the rules or regulations made thereunder, he shall be liable to a penalty which may extend up to five per cent. of the estimated cost of the real estate project as determined by the Authority.
Sec 62 – If any real estate agent fails to comply with or contravenes the provisions of section 9 or section 10, he shall be liable to a penalty of ten thousand rupees for every day during which such default continues, which may cumulatively extend up to five per cent. of the cost of plot, apartment or buildings, as the case may be, of the real estate project, for which the sale or purchase has been facilitated as determined by the Authority.
He can be reachable for any clarification at Email ID: email@example.com