By Shreya Govil

Abstract

This piece does a comparative analysis of RERA Delhi and Mumbai with the aim to understand the features of both. This highlights the possibility of both acts interacting with each other in a mutually beneficial manner and resolving the issues each act might be facing.

Introduction

The Real Estate sector in India has flourished in recent years. However, it was unregulated. There were no preventive laws with respect to consumer protection, which affected the growth of the sector. The Real Estate (Regulation and Development) Act was enacted in 2016 with the aim to establish a Real Estate Regulatory Authority, to promote proper regulation of the Real Estate Sector. It aims to work in a transparent and efficient manner and to protect the interest of the Consumers by providing speedy disposal of disputes arising in the real estate sector. This article explores the features of RERA specifically in Maharashtra and Delhi.

Features of MahaRERA

Registration of property is very important under MahaRERA. All real estate projects and agents must be registered. It extends safety to all customers, allottees, real estate agents, and promoters involved in a real estate transaction. Only registered projects can be advertised.

All information related to the project is to be submitted and should be always accessible to the buyers. Moreover, buyers have the power to question each step involved in both development and promotion. This leads to transparency in regard to the sale of flats, plots, and buildings. Under Rule 4 of the Maharashtra Real Estate Regulatory Authority (General) Regulations 2017, the promoter is to upload all the details relevant to the project on his webpage on the website of the authority. The same is mentioned in Section 11 of the RERA Act. Every ongoing project which has not received an occupation certificate shall be registered within the period of three months from 1st May 2017. Upon receiving the application, the authority shall grant registration within the period of 30 days.

Any delays in the completion of the project would be handled stringently. In cases of delay where the buyers do not want to withdraw from the project, the builders are required to compensate the buyers by refunding the deposited money with a stipulated rate of interest for every month till completion and handing over of the property. Maha RERA has fixed the down payment to 10%, thus making it impossible for developers to funnel funds collected from buyers and redirect them to some other projects. Non-compliance to these provisions can lead to imprisonment of up to 3 years and a penalty.

With the aim to increase accountability, the developers are mandated to deposit 70% of all funds paid for a project into a single account. And these funds can only be used for the construction or acquisition of land or other associated costs.

In case there is any dispute, Section 31 of the RERA Act and Rule 6 of the Maharashtra Real Estate (Regulation and Development) Rules, 2017 can be used by an aggrieved person who has any interest in the registered property. As per Rule 24 of Maharashtra Real Estate Regulatory Authority (General) Regulations 2017 any proceedings with respect to the complaints filed. MahaRERA may direct the matter to be heard by a single bench either of the chairperson or any member of the Authority. Section 29 of the Act provides that the complaints must be disposed of within sixty days from the date of filing the same. If the complaint is not dealt with within the specified time period, then RERA must record its reasons for the same.

In regard to matters under sections 12, 14, 18, and 19, if the aggrieved chooses to move from Consumer Forum to RERA it can be done under the proviso of section 71. The matter can be filed with the adjudicating officer under the act. The same was held in the Emaar Mgf Land Ltd Co & Anr V. Aftab Singh, where the court held that the aggrieved party seeking redressal against a builder can come under the Consumer Protection Act and under the RERA act.

Section 32(g) of RERA provides that state RERA can take measures to facilitate amicable conciliation of disputes between promoters and allottees through dispute settlement forums. This helps both parties save cost and time on litigation.

However, sometimes, RERA Rules can favor developers over homebuyers. In Maharashtra, builders of ongoing projects are to submit details of only their last sanctioned plan, giving them scope to not reveal details of changes or delays with respect to the original plan and promise.

RERA Delhi–

RERA Delhi also shares similar provisions to the MahaRERA. Other than the RERA Act the National Capital Territory is also governed by the Delhi Real Estate (Regulation and Development) (General) Rules, 2016. All projects must be registered, and the KYC of the promoters must be done. There are different slabs of the registration fees which the promoter has to pay. The real estate agents must also be registered with RERA and shall submit the registration application with the registration fees. As per section 3(2), the following projects do not require to be registered under the RERA Real Estate Bill: (a) Area of land not more than 500 sq. meters or number of apartments not more than 8. (b) Promoter received completion certificate before enforcing of Act. (c) projects for the purpose of renovation or repair or re-development and do not involve marketing are not required to be registered.

The RERA Act has some penal provisions for Promoters and Agents – Non-Registration of a Project by promoters is punishable with a fine of 10% of the estimated cost of the building. While the agent is punishable with a fine of Rs. 10,000 per day or 5% of the total cost of the building.

For the existing projects that have not received the completion certificate, the promoter is to deposit in a separate bank account, 70% of the amount realized from allottees, which have not been utilized for the construction of the project or the land cost for the projects. Section 13(1) of the Act prohibits the promoter from taking more than 10% of the cost of the apartment without entering into a written agreement for sale, duly registered.

Lack of registration has been a major problem in Delhi where only 81 projects were registered. Non-registration makes it hard for RERA to safeguard the rights of the buyers as the authority has no jurisdiction over unregistered projects. In the Mohammed Zain Khan v. Maharashtra Real Estate Regulatory Authority & Ors. case it was held that complaints against unregistered projects would be entertained or dealt with in the same manner as complaints against registered projects. Following this, Maha RERA started to entertain complaints against unregistered projects. Authority also has the power to hold promoters of unregistered projects liable for non-compliance with the obligations of promoters under Maha RERA. For example, in case of complaints of delay of an unregistered project, action can be taken by RERA as it has jurisdiction. These developments in Maha RERA can help in resolving the problem being faced by Delhi RERA and expand the ambit of safeguards available to the buyers. Most of the provisions under Maha RERA and Delhi RERA are the same thus developments like these play a very important role in improving the quality of justice as they complement one another. Therefore, helping each other in perfecting the Act while maintaining its essence.

Image Source: Google Images

About The Author

Shreya Govil is a student at Jindal Global Law School. Their areas of interest are constitutional law, gender studies, and Human rights law.