In past few years, we observed that there are many reforms has been taken place in large for development and smooth functioning the economy.
One of them, regulation which we are taking up in this article is RERA i.e Real Estate Regulation Act, name itself reflects that this for regulating the Real Estate Transaction.
Now Question arises what are the transaction that covered or rather I say that is been regulated by the Act.
Following Transactions have been specifically excluded from the Registration criteria prescribed by the Authority
– where the area of land proposed to be developed does not exceed 500 square meters
or the number of apartments proposed to be developed does not exceed 8 inclusive of all phases
– where the promoter has received completion certificate for a real estate project prior to commencement of this Act that is 01.05.2017
– Renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project.
For the purpose of this section, where the real estate project is to be developed in phases, every such phase shall be considered a stand alone real estate project, and the promoter shall obtain registration under this Act for each phase separately.
According to going through the above explanation if Developer is exploring the Real Estate Project in a Planning area as defined in Act, then registration of project is Madatory.
Non-Registration of Project may face a Following cases, he would not able to
– Make an Advertisement/Market for Project
– Book/Sale/Offer for sale to prospective Buyers
– Invite Buyer for Purchase
So in the Interest of Project and stay away from Government intervention it is better in a current scenario to first register the project, once all necessary approval from all authority obtained.
Again Question Comes in to mind if Registration requires then “How and What are documents required”?
Section 4 of RERA Act Prescribed the Manner by adhering which every promoter of the Project can make Application for registration of project to the Authority. (Website:- maharera.mahaonline.gov.in) File Application Online.
For the Purpose of Documents it is as easy as by means Authority is just asking proof of documents that Project has approved by the Competent Authority and Obtained necessary Approval for Commencement.
Namely:—
(a) a brief details 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;
(b) 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;
(c) 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;
(d) 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;
(e) the plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof including fire fighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy;
(f) 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;
(g) proforma of the allotment letter, agreement for sale, and the conveyance deed proposed to be signed with the allottees;
(h) 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;
(i) the number and areas of garage for sale in the project;
(j) the names and addresses of his real estate agents, if any, for the proposed project;
(k) the names and addresses of the contractors, architect, structural engineer, if any and other persons concerned with the development of the proposed project;
Along side also Promoter of the project has to give Declaration mentioning that
(A) that he has a legal title to the land on which the development is proposed along with legally valid documents
(B) that the land is free from all encumbrances, or as the case may be details of the encumbrances on such land including any rights, title, interest or name of any party in or over such land along with details;
(C) the time period within which he undertakes to complete the project or phase thereof, as the case may be;
(D) that 70%. of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose:
Provided that the promoter shall withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project:
Provided further that the amounts from the separate account shall be withdrawn by the promoter after it is certified by
1. Engineer In Form 2,
2. Architect in Form 1
3. Chartered accountant in practice in Form 3 (Refer Circular No. 7/2017 dated 4th July,2017)
that the withdrawal is in proportion to the percentage of completion of the project:
Provided also that the promoter shall get his accounts audited within six months after the end of every financial year by a chartered accountant in practice, and shall produce a statement of accounts duly certified and signed in Form 5.
Points After Registering the Project:-
– Quarterly updates the details about progress of the project on the portal for Public view.
– Advertisement of Project
– Not accept more than 10% of amount of sale as Advance with-out entering in to Written Agreement
– Submission of Documents with a bank for withdrawal of Money deposited (Form 1/2/3)
– Uploadation of Form 2A regarding Certificate of Quality Assurance – 01.12.2018
– any other alterations or additions in the sanctioned plans, layout plans and specifications of the buildings or the common areas within the project without the previous written consent of at least two-thirds of the allottees, other than the promoter, who have agreed to take apartments in such building.
– The promoter shall not transfer or assign his majority rights and liabilities in respect of a real estate project to a third party without obtaining prior written consent from two-third allottees, except the promoter, and without the prior written approval of the Authority.
– Formation of Society within 3 Months from the date on which fifty one per cent. of the total number of allottees in such a building or a wing, have booked their apartment..
– Insurance as required by Autority.
– Execution of Conveyance Deed in favor of Allottees with in 3 Month from date of receipt of OC.
– In case unable to deliver then liable for returning of money with Interest as applicable.
Going through all this one things definitely comes in to mind that what if Promoter fail to comply any of the Provision or Regulation or Instruction of Authority,
Offence/Penalty:-
– If any promoter contravenes the provisions of Registration, he shall be liable to a penalty which may extend up to 10%. of the estimated cost of the real estate project as determined by the Authority.
– If any promoter does not comply with the orders, decisions or directions issued or continues to violate the provisions of Registration, he shall be punishable with imprisonment for a term which may extend up to 3 years or with fine which may extend up to a further 10%. of the estimated cost of the real estate project, or with both.
– If any promoter provides false information or contravenes, he shall be liable to a penalty which may extend up to 5%. of the estimated cost of the real estate project.
– Where an Offence under this Act has been committed by a company, every person who, at the time, the offence was committed was in charge of, or was responsible to the company for the conduct of, the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly
Some of the Important Definition necessary to understand:-
“real estate project” means the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, 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;
“completion certificate” means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws;
“occupancy certificate” means the occupancy certificate, or such other certificate by whatever name called, issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructure such as water, sanitation and electricity;
“carpet area” means the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment.
“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;
Registration Fees at the time of application for registration, the promoter shall pay a registration fee, calculated on the area of the land proposed to be developed at the rate of, rupees ten per square meter, subject to a minimum of rupees fifty thousand only and a maximum of rupees ten lakhs;
Author Bio
Hi Parth, a very very useful detailed note on the RERA provisions. Would like to connect with you further on some query at the earliest. Do connect with me. Thanks [email protected]