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Suravi Mohapatra   13 September 2021

HMDA and RERA approval

I am interested in a property in Hyderabad which has HMDA approval.
The project started in 2010 and it is being built phase by phase. Since RERA act was passed in 2016, the property does not have RERA approval. But the builder is a genuine one and highly reputed. Should I buy it?


 5 Replies

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 )     14 September 2021

registration under RERA is compulsory for any builder who wants to develop a residential or commercial property on land that is more than 500 sq. Meters or the number of proposed apartments in all phases is more than 8.

G.L.N. Prasad (Retired employee.)     14 September 2021

Let the buyer beware is the law, members even without knowing the name of a builder can not suggest/recommend any builder, as the present defaulters are highly reputed builders in Delhi and Mumbai. Personally inspect the progress of construction, interact with those owners occupying in the previous completed phase, and convince yourself.
1 Like

P. Venu (Advocate)     14 September 2021

If the builder is genuine and higly reputed, what is the constraint for him registering under RERA?

G.L.N. Prasad (Retired employee.)     14 September 2021

Fundamentally HMDA approval is a precaution that the builder obtained proper approval. RERA comes into the picture only in case of default but is not concerned with the execution of the project and may serve as insurance for the loss at a later stage. Ultimately the reputation and financial standing of the builder that has to be looked into.
1 Like

Shubham Bhardwaj (Advocate)     17 September 2021

Dear Mr Suravi, Your query is less of legal and more about practicality. The completion of a project does not depend on RERA registration. RERA comes into act only after the builder has defaulted and once there is default by a builder/developer, the chances of him completing it is very less because of many factors which come into play. So how should you decide ? As rightly advised by Shri Prasad, look at the over layout plan of the project and compare it with percentage completed. Further, also see whether the earlier phases were completed in time and if not, how much delay was there in completion of a particular phase. Further, get a copy of the financial of the developer company from Registrar of Companies office (online) and see the financial position. Also see the position of outstanding loan and charges on the project property. Also talk to people already living in completed towers, if any. Other precautionary measure could be opt for construction linked plan. Monitor the progress of the project regularly and pay as per progress. This list is only illustrative and not exhaustive. There are many other things that can be done like see the history of the builder i.e. projects previously under taken by him and completed. A builder who has a history of completed projects would rarely default. Regards Shubham Bhardwaj (Advocate) District & Session Court, Chandigarh Punjab & Haryana High Court, Chandigarh Disclaimer:- Opinion is only for guidance.

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