Rights & Obligations of Allottees Under Real Estate Act, 2016

Rights And Obligations Of Allottees Under Real Estate (Regulation And Development) Act, 2016

The Real Estate ( Regulation and Development ) Act, 2016 defines “ Allottee” as the person to whom a plot, apartment or building , as the case may be , has been allotted, sold( whether as freehold or leasehold)  or otherwise transferred by the  promoter. It also includes person who subsequently acquires the said allotment through sale, transfer or otherwise. But the definition of “Allottee” does not include a person to whom land or apartment is give on rental basis.

The Rights of allottes  given in Sections 11 to 19 of The Real Estate (Regulation and Development) Act, 2016; which are as follows;

(i) Right of information  [ Section 11(3), 19(1) and 19(2)];

(ii) Right to receive Completion Certificate/Occupancy certificate [ Section 11(4)(b)];

(iii) Right to remedy of approaching RERA against wrongful cancellation of allotment by promoters( Builders and Developers) [ Section 11(5)];

(iv) Right to claim compensation or interest from promoters for breaches of agreement of sale [ Section 12, 14(3) 18, Section 19(4)];

(v) Right to withdraw from the project and claim return of investment with interest and compensation[Section 12, 18(1)] in case of false advertisement or non fulfilment of any conditions mentioned in the agreement;

(vi) Right to claim compensation for the promoters in case of loss caused to allottes due to defective title [ Section 18(2)];

(vii) Right to execution of Agreement for Sale, before payment of 10 % of cost of flat/ apartment/ gala/land etc.[ Section 13];

(viii) Right to receive  title of insurance to be transferred in the name of allottees or association or society of allottees  [Section 16];

(ix)  Right to statutory remedy of filing compliant with adjudication authorities for enforcement of rights;

(x)  Right to execution of registered conveyance deed by the promoters [Section 17(1)];

(xi)  Right to possession [ Section 17(1), 18(1) , 19(10)];

(xii) Right against alteration of project without their consent [ Section 14(1), 14(2)];

(xiii) Right against transfer or assignment of project by the promoters to third party without consent of allottees or association of allottees {Section 15];

(xiv) Right to be charge same rate of interest for default in payment as promoters will be charges in case of breach of any clauses of the Agreement of Sale.

SOME COLLECTIVE RIGHTS TO BE ENJOYED BY THE ALLOTTEES;

(i) Right to occupation/ completion certificate of the project to be acquired by the promoters and handed over to allottees or association or society of allottees , within a period as may be allowed by RERA;

(ii) If project is on lease from town planning authority, then the promoter will hand over the lease certificate in favour of allottees or associations of allottees;

(iii) Right to document of insurance, the promoters of a project are required to execute or take an insurance policy form insurers to insure the project and after completion of the same promoters will transfer the title of insurance in favour of allottees or association of allottees;

(iv) Rights to documents and plans, the promoter will hand over all plans, documents, certificates , drawings, NOC to the allottees or association of allottees after completion of project or at the time of handing over the possession of project;

(v) In case registration of a promoter is revoked by the RERA, then allottees or association of allottees have right to transfer the amount kept in separate bank account by the promoters according to the provisions of The Real Estate (Regulation and Development) Act, 2016.

NOW LETUS CONSIDER ALL POINTS SEPERATELY;

RIGHT TO INFORMATION [SECTION 11(3), 19(1) 19(2)];

Section 19(1) provides that the allottee shall be entitled to obtain information regarding sanctioned plans, layout plans along with specifications approved by the competent authorities, the Agreement of Sale etc., signed by the promoters with competent authorities.

Section 19(2) the allottes are entitled to information regarding stage wise completion of project including provisions of water, sanitation, and electricity and other amenities and services according to the clauses of Agreement of Sale.

Section 11(3) provides that at the time of booking the promoters are bound to provide following information to the allottees;

(a)  Sanctioned plan, layout plan, along with specifications approved by the competent authority, by display at the site or such other place as may be specified by the regulations made by the Authority;

(b)  The stage wise schedule of completion of the project, including the provisions for civic infrastructure like water, sanitation and electricity.

RIGHT TO OCCUPANCY/COMPLETION CERTIFICATE [section 11(4) (b)]; the promoter is responsible to acquire Completion / Occupancy Certificate from competent authority according to rules and regulations prescribed in this regard.

RIGHT TO REMEDY BY APPROACHING RERA AGAINST WORNGFUL CANCELLATION OF ALLOTMENT;

The cancellation by the promoter can be said to be wrongful only if all these conditions are satisfied;

(i) It is not in accordance with the Agreement of Sale;

(ii) If is unilateral i.e. it not a cancellation by mutual agreement of parties; and

(iii) It is without sufficient cause.

The allottees may approach to the authority for getting remedy against wrongful cancellation of agreement by promoters.

RIGHT TO CLAIM COMPENSATION[ Section 14(3), 18 & 19(4)] the allottees are entitled to get their amount invested with interest and compensation if promoters are not giving possession at the right time or in accordance with the Agreement of Sale or if promoters has been breached any terms and conditions of the Agreement of Sale.

The interest shall be payable at prescribed rate and the compensation will be calculated according to the provisions of Section 19(4) of the Act.

Section 18(1) provides that the allottees will get refund of his investment with interest and compensation if he withdraws himself from the project. In other case if allottee does not withdraw from the project then the promoter will pay him monthly interest at such rate as may be prescribed by the RERA, following conditions need to be fulfilled in this case;

(i) Failure by the promoter to hand over the physical possession according to the terms of Agreement of Sale;

(ii) Where persons makes an advance or deposit on the basis of false or incorrect statement contained in any notice, advertisement or prospectus or model apartment or plot or building[ Section 12].

Section 12, Provides that 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 the Act.

RIGHT TO CLAIM COMPENSATION FOR LOSS CAUSED BY DEFECTIVE TITLE[Section18(2)];  if a project has been developed on a land for which promoter has defective title then any loss caused to the allottees , will be compensated by the promoter and claim of such compensation will not be barred by law of limitation.

RIGHT TO EXECUTION OF REGISTERED CONVEYANCE DEED[Section 17(1)]; the promoter shall execute a registered conveyance deed in favour of the allottee  along with the undivided proportionate title in the common areas to the association of the allottees or the competent authority , as the case may be, and hand over the physical possession of the plot, apartment of building , as the case may be to the allottees and the common areas to the association of allottees or the competent authority , as the case may be in real estate project, and other title documents pertaining thereto within the specified period according to the sanctioned plans as required by the local authority’s rules and regulations.

THERE ARE SOME RIGHTS TO BE ENJOYED BY ALLOTTEES COLLECTIVELY;

1. RIGHT AGAINST ALTERATION OF PROJECT; the promoters without consent of two third numbers of allottees does not carry structural changes in the project.

2. RIGHT AGAINST TRANSFER OR ASSIGNMENT OF PROJECT; 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 or approval of authority.

3. RIGHT AGAINST MORTGAGE OF ANY PART OF PROJECT BY PROMOTER; the promoter without prior written consent of allottees does not mortgage any part of project.

SECTION 8 provides that upon lapse of the registration or on revocation of the registration under the Act, the Authority with consultation of appropriate government take such steps as they deem fit including carrying out the remaining development works by competent authority or by association of allottees or in any other manner, as may be determined by the authority.

OBLIGATIONS OF ALLOTTEES;

(i) Responsibility to pay interest for delay in payment according to Agreement of Sale;

(ii) Responsibility to participate in formation of Association of Allottees;

(iii) Responsibility to take physical possession of the apartment, plot or building as the case may be , within a period of two months of the issue of Occupancy certificate;

(iv) Responsibility in participating in execution of conveyance deed;

(v)  Responsibility to pay penalty for breach of any order of the Competent Authority;

(vi) Penalty for failure to comply with the order of Appellate Tribunal.