cpc

Promoter's compliances and obligations under MahaRERA

All provisions of Real Estate (Regulation and Development) Act, 2016 (Act) have come in force in Maharashtra on 1st May 2017 and we are seeing the change in Real Estate Sector; inducing transparency and fair practices by the developers.

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has been the benchmark RERA Regulatory Authority in India and has lead the way for RERA Compliance in the State of Maharashtra. From creating the first RERA website in the country enabling registration of project online, to the introduction of Conciliation and Dispute Resolution Forum, MahaRERA has is truly a benchmark in India.

With such an efficient Maha RERA Authority, it is expected from the Promoters to duly comply with the compliances and obligations under the Act. Following are some of the major compliances expected from the promoters:

Registration

As per Section 3, it is mandatory for a promoter to register under the Act if he wishes to advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, in any real estate project 1 or part of it, in any planning area 2.

However, Section 3(2) provides for exemption to register under the Act, if the following conditions are fulfilled: [3]

  • 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; or
  • where the promoter has received completion certificate for a real estate project prior to commencement of this Act;
  • if the project is having a 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 case may be, under the real estate project.

The Maha RERA project registration fee is 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.

Judicial Precedents pertaining to Registration of Real Estate Project:

Parag Pratap Mantri (Complainant) Vs. Green Space Developers (Respondent) Final Order passed against Complaint No. CC005000000000135, dated 5th February 2018,

Order or Circulars pertaining to Registration of Real Estate Project:

Circular No.6/2017, MahaRERA/Secy/File No. 27/ 113/2017, dated 4th July, 2017 - Clarification regarding Project Registration Process

On failure to register the project under the provisions of the Act, the promoter 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.

RERA Separate Bank Account (SBA)

  • Under Section 4(2)(l)(D) of the Act, the promoter shall submit a declaration, supported by an affidavit, stating that 70% of the amounts realized for the real estate project from the allottees, from time to time, shall be deposited in a SBA to be maintained in a scheduled bank [4]to cover the cost of construction and the land cost and shall be used only for that purpose.
  • Under Rule 5 of the Maharashtra Real Estate (Regulation and Development) (Registration of real estate projects, Registration of real estate agents, rates of interest and disclosures on website) Rules, 2017 (MahaRERA Rules), for the purpose of amount to be withdrawn from time to time by the promoter from the SBA in respect of each real estate project to cover the cost of the project, the Promoter shall submit required three certificates to the scheduled bank operating the SBA.
  • The above compliance is relaxed by MahaRERA by issuing Circular No. 03/2017, MahaRERA/Secy/File No. 27/ 79/2017, dated 7th June, 2017, under which the promoter shall submit a self declaration in the format as annexed to the Circular, to the Scheduled Bank operating the SBA once every quarter.
  • Order or Circulars pertaining to Operating of SBA of Real Estate Project: Circular No. 03/2017, MahaRERA/Secy/File No. 27/ 79/2017, dated 7th June, 2017 - Self Declaration to be submitted by the Promoters to the Bank.
  • On failure to comply with the provisions pertaining to operation of SBA, the promoter shall be liable to a penalty which may extend up to 5% of the estimated cost of the real estate project as determined by the Authority

Quarterly Updates

Under Section 11 of the Act, it is the duty of the promoter to quarterly up-to-date:

  1. the list of number and types of apartments or plots, as the case may be, booked;
  2. quarterly up-to-date the list of number of garages booked;
  3. quarterly up-to-date the list of approvals taken and the approvals which are pending subsequent to commencement certificate;
  4. quarterly up-to-date status of the project and such other information and documents as may be specified by the regulations made by the Authority.

Order or Circulars pertaining to Quarterly Update of the Real Estate Project:

  1. Circular No. 08/2017, MahaRERA/Secy/File No. 27/ 132/2017, dated 17th July, 2017 - Standard Operating Procedure for Updating Registered Projects and Revising / Correcting Information with respect to Registered projects and Registered Real Estate Agents.
  2. Circular No. 14/2017, MahaRERA/Secy/File No. 27/ 548/2017, dated 1st November, 2017 - Amendment to the Circular on Standard Operating Procedure for Updating Registered Projects and Revising/Correcting Information with respect to Registered Project and Agents.

On failure to quarterly update the project under the provisions of the act, the promoter shall be liable to a penalty which may extend up to 5% of the estimated cost of the real estate project as determined by the Authority.

Certifications

Under proviso to Section 4(2)(l)(D):

  1. 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;
  2. the amounts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project;
  3. 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 by such chartered accountant and it shall be verified during the audit that the amounts collected for a particular project have been utilised for the project and the withdrawal has been in compliance with the proportion to the percentage of completion of the project.

The Maharashtra Real Estate Regulatory Authority (General) Regulations 2017 provides for various formats of the certificates to be obtained from Architect, Engineer and Chartered Accountant.

Following are the list of Forms provided under the Regulations pertaining to compliances required under Section 4(2)(l)(D):

  1. Form 1 - Architect's Certificate, to be obtained for the purpose of registration, withdrawal of money or SBA, quarterly update.
  2. Form 2 - Engineer's Certificate, to be obtained for the purpose of registration, withdrawal of money or SBA, quarterly update.
  3. Form 3 - Chartered Accountant Certificate, to be obtained for the purpose of registration, withdrawal of money or SBA, quarterly update.
  4. Form 4 - Architect's Certificate to be obtained on completion of each building/ wing/ project.
  5. Form 5 - Annual Report on Statement of Accounts to be obtained from a Chartered Accountant who is a Statutory Auditor of the Promoter.

 Order or Circulars pertaining to Certifications required under the provisions of the Act:

  1. Circular No. 1/2017, MahaRERA/Secy/File No.27/ 109/2017, dated 31st May, 2017 - Clarification regarding “License No.” of Engineer
  2. Circular No. 5/2017, MahaRERA/Secy/File No.27/ 109/2017, dated 28th June, 2017 - Clarification regarding Operating Designated Bank Account
  3. Circular No. 7/2017, MahaRERA/Secy/File No.27/ 115/2017, dated 4th July, 2017 - Clarification on CA Certificates

On failure to obtain the required certificates under the provisions of the act, the promoter shall be liable to a penalty which may extend up to 5% of the estimated cost of the real estate project as determined by the Authority.

Agreement for sale

  1. Under Section 13(1) of the Act, a promoter shall not accept a sum more than 10% of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force.
  2. Further, Rule 10(1) of the MahaRERA Rules r.w.s 13(2) o the Act, provides for a Model form of Agreement (Annexure A of the MahaRERA Rules)
  3. Furthermore, the MahaRERA Rules, states that nothing in Rule 10(1) shall be deemed to prevent the promoter to modify the model form of Agreement for Sale provided that such agreement is in conformity with the provisions of section 13(2) of the Act and the rules and regulations made there under.

Formation of Society

Under Section 11(4)(e) of the Act, the promoter shall enable the formation of an association or society or co-operative society, as the case may be, of the allottees, or a federation of the same, under the laws applicable.

Further, as per Rule 9(1) of the MahaRERA Rules:

  1. Where a Co-operative Housing Society or a Company or any other legal entity of allottees is to be constituted for a single building not being part of a Layout; or in case of layout of more than one building or a wing of one building in the layout, the Promoter shall submit the application in that behalf to the Registrar for registration of the Co-operative Housing Society under the Maharashtra Co-operative Societies Act, 1960 or a Company or any other legal entity, within three months from the date on which 51% of the total number of allottees in such a building or a wing, have booked their apartment.
  2. Where a Promoter is required to form an Apex Body either as a federation of separate and independent Co-operative Housing Societies or Companies or any other Legal Entities or as a Holding Company of separate and independent Co-operative Housing Societies or companies or any other Legal Entities, then the Promoter shall submit an application to the Registrar for registration of the co-operative society or the company to form and register an Apex Body in form of Federation or Holding entity consisting of all such entities in the Layout formed as per clause (i) of sub-rule (1) of rule 9 (1)(i) herein above. Such application shall be made within a period of three months from the date of the receipt of the occupancy certificate of the last of the building which was to be constructed in the Layout.

On failure to form the required legal entity, the Authority shall by an order direct the Promoter to apply for formation of such legal entity or may authorize the allottees to apply for formation of such legal entity.

Further, on failure to form the required legal entity, the promoter shall be liable to a penalty which may extend up to 5% of the estimated cost of the real estate project as determined by the Authority.

Conveyance of Title

Under Section 11(4)(f) of the Act, the promoter shall execute a registered conveyance deed of the apartment, plot or building, as the case may be, in favour of the allottee along with the undivided proportionate title in the common areas to the association of allottees or competent authority, as the case may be, as provided under section 17 of this Act.

Further, as per Rule 9(2) of the MahaRERA Rules, period for Conveyance of Title, by Promoter, to allottees in case of:

  1. Plots - Conveyance within three months from the date the allottees in such plot have paid full consideration to the promoter.
  2. Single Building Project - If no period for conveying the title of the Promoter to the legal entity of the allottees is agreed upon, the Promoter shall (subject to his right to dispose of the remaining Apartments, if any) execute the conveyance within three months from the date of issue of occupancy certificate or 51% of the total number of allottees in such a building or a wing, have paid the full consideration to the promoter, whichever is earlier.
  3. Layout | No Period agreed upon of particular Building/ Wing - the Promoter shall (subject to his right to dispose of the remaining Apartments, if any) execute the conveyance of the structure of that building or wing of that building (excluding basements and podiums) within one month from the date on which the Co-operative society or the company is registered or, as the case may be, the association of the allottees is duly constituted or within three months from the date of issue of occupancy certificate, whichever is earlier.
  4. Layout | No Period agreed upon of entire Layout - the Promoter shall execute the conveyance of the entire undivided or inseparable land underneath all buildings jointly or otherwise within three months from the date on which the Apex Body or Federation or Holding Company is registered or, as the case may be, the association of the allottees is duly constituted or within three months from the date of issue of occupancy certificate to the last of the building or wing in the layout, whichever is earlier.

Order or Circulars pertaining to Certifications required under the provisions of the Act:

  1. Order No. 4, MahaRERA/Secy/File No.27/ 106/2017, dated 27th June, 2017 - Clarification regarding period within which the promoter has to transfer the title by executing conveyance.
  2. On failure to convey the title in accordance with the provisions under the Act and Rules, the Authority shall by an order direct the Promoter to convey the title in favour of such legal entity.
  3. Further, on failure to convey the title, the promoter shall be liable to a penalty which may extend up to 5% of the estimated cost of the real estate project as determined by the Authority.

In light of the various orders passed by the MahaRERA Authority, it is evident that the non-compliance on part of the promoter would not be dealt leniently by the MahaRERA Authority, hence it is expected from a promoter to be fully compliant and to take the RERA in its true spirit.

[1] Section 2 (zn) "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;

[2] Section 2 (zh) "planning area" means a planning area or a development area or a local planning area or a regional development plan area, by whatever name called, or any other area specified as such by the appropriate Government or any competent authority and includes any area designated by the appropriate Government or the competent authority to be a planning area for future planned development, under the law relating to Town and Country Planning for the time being in force and as revised from time to time;

[3] Explanation to Section 3(2): 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.

[4] Explanation to Section 4(2)(l)(D) For the purpose of this clause, the term "schedule bank" means a bank included in the Second Scheduled to the Reserve Bank of India Act, 1934;

 

Tags :
Published in Property Law
Views : 3647









×

Menu

IPC Grand Course     |    x