RERA claused

[GopiRaman Alok]

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Important RERA Clause:

Hi All,

Many of us might not had information handy when they are trying to get benefits of RERA (specially clause wise) so I had documented few... Please take a copy of it and then try to negotiate or represent your case in RERA authority. 

RERA:

1) Carpet Area:

According to the RERA, carpet area is defined as ‘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’.

Definition on Carpet Area as quoted in Section 2(K) of Real Estate ( Regulation and Development) Act, 2016 ---

"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.

2) RERA silent feature as of UR RERA portal

•It establishes the State Real Estate Regulatory Authority as the government body to be approached for redressal of grievances against any builder. 

•This law vests authority on the real estate regulator to govern both residential and commercial real estate transactions. 

•This law makes it mandatory for developers to post all information on issues such as project plan, layout, government approvals, land title status, sub-contractors to the project, schedule for completion with the State Real Estate Regulatory Authority (RERA) and then in effect pass this information on to the consumers.

• The maximum jail term for a developer who violates the order of the appellate tribunal of the RERA is three years with or without a fine. 

• Currently, if a project is delayed, then the developer does not suffer in any way. Now, the law ensures that any delay in project completion will make the developer liable to pay the same interest as the EMI being paid by the consumer to the bank back to the consumer 

• The developer cannot make any changes to the plan that had been sold without the written consent of the buyer. 

• Every project measuring more than 500 square metres or more than eight apartments will have to be registered with the RERA. 

3) Rate of interest:

   A) As per the Explanation to section 2(za) the rate of interest payable by either the promoter or the allottee shall be the same. 

   B) Section 18 of the Act provides for provisions as regards various situations in which the allottee would be compensated by the promoter due to delay in completion of the project etc.

4) Open Car Parking:

Section 2(n) defines ‘common areas’ to include ‘open parking areas’, thus open parking areas cannot be sold to the allottees.

5) community and commercial facilities:

Section 2(n) defines ‘common areas’ to include ‘community and commercial facilities’, thus they are an integral part of the project, to be handed over to the Association of Allottees.

6) difference between the term ‘completion certificate’ and ‘occupancy

certificate’

Section 2(zf) and section 2(q) respectively, define ‘occupancy certificate’ and ‘completion

certificate’. Occupancy certificate relates to the occupation of the apartment/building,

which has provision for civic infrastructure such as water, sanitation and electricity and is

habitable. Completion certificate relates to the completion of the entire project certifying

that the project has been developed according to the sanctioned plan, layout plan and

specifications, as approved by the competent authority.

7) Does the Act cover ongoing / incomplete projects?

As regards the ambit of the Act, there is no distinction between an ongoing project and a future project, i.e. both ongoing / incomplete projects and future projects are covered under the Act.

Section 3(1) first proviso provides that promoters of ‘all ongoing projects which have not received completion certificate will need to register their project with the Regulator Authority, within 3 months of its commencement’.

8) Which projects are exempt from the ambit of the Act?

As per section 3(2) the following projects do not require to be registered under the Act:

(a) where the area of land proposed to be developed does not exceed five hundred square meters or the number of apartments proposed to be developed does not exceed eight, inclusive of all phases;

(b) where the promoter has received completion certificate for a real estate project prior to commencement of this Act;

(c) for the purpose of renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the

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case may be, under the real estate project.

9) ‘escrow account’ or a ‘separate account’?

Section 4(2)(l)(D) provides that the promoter shall maintain a ‘separate account’ for every project undertaken by him wherein seventy percent of the money received from the allottees shall be deposited for the purposes of construction and land cost. The account has to be self maintained and is not an escrow account requiring the approval of the Authority for withdrawal.

Section 4(2)(l)(D) clearly provides that the funds can only be used for construction and land cost.

10) functions and responsibilities of the promoter after 43. registration of the project with the Authority?

As per section 11 of the Act, the promoter is required to update all project information as furnished at the time of application (as provided under section 4) on the website of the Authority. In addition, section 11 also provides for certain information, which needs to be regularly (quarterly) updated by the promoter, in order to make an informed choice by the buyer.

In addition, the promoter is required to carry out all the responsibilities as envisaged under section 11 at various stages of development of the project and upon its completion.

11) Agreement for Sale: ---Possession date is binded to promoter 

As per section 13(2) the appropriate Government is required to specify through Rules the ‘Agreement for Sale’ to be entered into between the promoter and the allottee. This Agreement is binding on the parties, however, internal flexibility could be provided in the said Agreement for Sale, for determination / insertion of other provisions as decided between the parties.

12) Can the promoter modify / amend the sanctioned plans or project specifications 48. after having been approved by the competent authority and disclosed to the allottees?

As per section 14 of the Act the promoter can only modify / amend the sanctioned plans or project specifications, after the approval of the competent authority and its disclosure to the allottees, in case of minor additions or alterations.

However, in case of major modification / alteration, the promoter can modify the sanctioned plans or project specification only after having taken approval from two-third of the allottees. In addition, for arriving at the number of two-third allottees, the number of apartments held by the promoter will be excluded. Also, irrespective of the number of apartments held by an allottee he/she shall only be entitled to one vote.

13) What is the period for which the promoter is liable for any structural defects etc. in 49. the project / apartment etc.?

As per section 14(2) the promoter shall be liable for 5 years form the date of handing over of possession to the allottee towards structural defect or any other defect as specified therein.

14) What is the obligation of the promoter as regards insurance of real estate 51. project?  --- Project must be insured 

As per section 16 the promoter is required to seek an insurance of the real estate project towards title of the land and towards construction of the project.

15) Rights of the allottees

Section 19 provides for the various rights of the allottees. This section specifies various rights which the allottees have against the promoters including those which the promoters are liable to fulfill based on the agreement entered into with the allottees, namely – stage-wise schedule of completion of the project and the services, claim timely possession of the apartment / plot, entitlement to necessary documents and plans etc.

16) What is the time period within which the Authority is required to dispose of any 59. matter that is brought to it for consideration?

Section 29 provides that the Authority should endeavour to dispose of the questions / complaints as expeditiously as possible but not later than sixty days from the date of filing the same. However, where it could not be disposed of during the said period the Authority is required to record its reasons for the same.

17) punishment prescribed for non-registration of a project under the 67. Act?

As per section 59, where under the Act, it is obligatory for the promoter to register a project with the Authority, and the promoter fails to do the same, he shall be liable to a penalty upto ten percent of the estimated cost of the real estate project.

However, in case the promoter consistently defaults or does not comply with the directions / orders of the Authority as regards registration of the project with the Authority, he shall be liable to additional fine of ten percent of the estimated cost of the real estate project or imprisonment upto 3 years or both.

18) What is the punishment prescribed for violation of other provisions of the Act by 69. the promoter?

As per section 61 if the promoter defaults any other provision of the Act or the Rules and Regulations made thereunder, he shall be liable to a penalty upto five percent of the estimated cost of the real estate project.

Thanks

Gopi Raman Alok