Majority of Delhi realtors are avoiding RERA registrations of the projects

Since Delhi is primarily a low-rise building market, local builders renovate the property and sell the floors independently for as much as Rs 30 crore each.

Earlier, Section 3(2) (a) of RERA provided for an exemption from registration if the land proposed to be developed was less than 500 square meters or the number of apartments proposed to be developed did not exceed eight. Many developers in posh colonies in Delhi have been avoiding registrations using this loophole.

BS Vohra, a right-to-information activist, said that the situation remains the same after the order as there is no one to look over the construction activity. Even when the plot size exceeds 500 square meters, some under-construction buildings in West-end, Vasant Vihar, Anand Lok, and Panchsheel Park are being developed without RERA registration.

Vohra said that the RERA should ensure that the rule is being followed after making it mandatory. The RERA chief could not be reached for comment.

The entire city of Delhi has registered only 81 projects, which is the lowest number in the country. Several builders in South Delhi with plots ranging from 800-1,000 square meters have not registered their projects with the RERA.

The convenor of the CII-Delhi sub-committee on real estate, urban development, and infrastructure, Harsh V Bansal said, “We need to push for organized development in Delhi. There are no major projects in Delhi while Noida and Gurgaon are benefiting from organized development”.

The Delhi RERA had threatened to impose a fine that could be up to 10% of the estimated cost of the real estate project if it was not compliant with RERA guidelines.

The registration procedure should be transparent with regard to the funds received from the purchasers, the completion and conveyance of the property in favor of the allottees, and the assurance that the project has received the required approvals and sanctions.

Many properties in Delhi’s posh colonies are worth Rs 20-100 crore. Older people and NRIs make up the majority of the previous owners who either sold or worked with developers.

The RERA had said in its order that the authority also suggests the general public to avoid investing in any residential or commercial real estate project.


Failed to deliver house, Gurugram RERA orders promoter to refund full amount with interest

The Real Estate Regulatory Authority, Gurugram directed the promoter of a housing project ILD Grand at sector 37C to refund the amount of Rs 72 lakh with interest to the allottee, who wants to withdraw from the incomplete project.

The project was launched in 2008-09 but it is still incomplete.

According to a statement issued by RERA Gurugram, directions to refund the amount were issued by the RERA court on January 6, however, the statement in the regard by the authority was issued on January 18.

“City-based promoter of a real estate project ILD Grand at Sector 37C will have to refund the full amount to its allottee. The Authority directs the promoter to return the amount received of Rs 72,09,911 with interest at the rate prescribed under the Rule 15 of the Haryana real estate (regulation and development) Rules 2017,” the statement said on January 18 quoting the order.

“Arguments heard, refund is allowed and a complaint now stands disposed of,” the court said in the order.

There was no immediate response available from the developer.

The Authority also said that the promoter is responsible for all obligations, responsibilities, and functions under the provisions of the Act.

The order further said that the promoter apparently has “failed to complete or was unable to give possession” of the unit in accordance with the terms of the agreement for sale.

“Accordingly, the promoter is fully liable to the allottee, as the allottee wishes to withdraw from the project, to return the amount received by him in respect of the unit with interest at such rate as may be prescribed,” said the order.

During the argument, the counsel for the respondent confirmed that the occupation certificate of the project is not yet applied as the construction work is not complete.

The builder has recently been granted financial assistance under the SWAMIH fund to complete the project by December 2023, the statement said.

“But the allottee is not interested in continuing with the project and is exercising the statutory rights under Section 18(1) of the Act for a refund of the deposited amount along with interest in view of the failure of the respondent promoter to complete the unit much after the due date of possession which has elapsed almost five years ago,” the court noted in its order.

The due date of possession as per the agreement for sale was August 2017 – failing what the complainant allottee approached RERA in February 2019 for relief.

Prior to this, the RERA Gurugram had in September 2022 asked the ILD promoter to complete the project or face punitive action.

Finding non-compliance with RERA orders the Authority Chairman KK Khandelwal had warned the developer of sending promoters to jail.


Karnataka RERA has no jurisdiction over project granted ‘partial OC’ before enactment of RERA: Karnataka HC

The Karnataka High Court (HC) has quashed an order passed by the Karnataka Real Estate Regulatory Authority (KRERA) that asked the developer, Provident Housing, to refund the entire booking amount to the homebuyer after the sale agreement was mutually cancelled following a dispute over the title of the land.

In the judgement, the HC allowed the writ petition filed by the developer and quashed the order for the refund that KRERA had issued in September 2020: “The judgment/order dated 30.09.2020 passed by the Karnataka Real Estate Regulatory Authority, Bangalore, stands quashed.”

The project had obtained two partial occupancy certificates from the Bengaluru Development Authority (BDA) in 2015 and 2017.

The HC judgment said that KRERA had no jurisdiction over projects granted partial occupation certificate (OC) before the enactment of the RERA Act.

The court found that by the time the Act came into force, the construction was no longer an ongoing project.

The order defined an ongoing project as, “An ongoing project would mean where the development of a project is going on, for which a completion certificate has not been issued.”

“The issuance of occupancy certificates, albeit partial, before the Act came into force is not in dispute. Therefore, the project loses its character, as an ongoing project in terms of Rule 4 of the (KRERA) Rules,” the order added.

“Therefore, the determination by the Authority was without jurisdiction and if it is an act without jurisdiction, it is non est in the eye of the law, and if it is non est in the eye of the law, it is rendered unsustainable and requires to be obliterated,” the order said. A non est order is one that can be ignored.

Advocate H Kumar, who argued in favour of the homebuyer, said, “The court has not taken into consideration the fact that partial OC is sufficient to exempt from registration (meaning that this is an ongoing project). Prima facie, the court has not dealt with the matter in depth.”

The case

In September 2014, homebuyer Shyama Shetty booked an apartment at Provident Sunworth. However, in March 2017, Shetty decided to cancel the agreement on the ground that the land had not been legally acquired by the developer.

Shetty said that the state government wanted to take possession of the land his apartment stood on in Venkatapura village in Kengeri Hobli, and the developer moved the HC for a stay on the matter.

In June 2016, the HC ordered interim relief and directed the state government and the developer “to maintain status-quo,” the court order accessed by Moneycontrol showed.

“Despite several requests, the developer did not provide me with letters from the competent authority concerning the acquisition of land. Nor did they reply to my queries,” Shetty added.

Subsequently, on Shetty’s request, the developer cancelled the agreement and refunded Rs 17.5 lakh out of around Rs 24 lakhs Shetty had paid. The developer kept about Rs 6.8 lakh as cancellation charges and taxes, including GST.

At this point, the homebuyer moved the KRERA seeking relief and a refund of the money the developer had deducted.

KRERA findings

KRERA noted that the developer had received the partial OC in March 2017, before the enactment of RERA in the state.

However, KRERA noted per a Haryana RERA order in 2018 it was confirmed that the domain of the authority extended to projects that had not been registered. “Accordingly, the projects that have not been registered but are registrable, in case of violation of Section 3, come within the domain of the authority and the authority is well within its power to initiate legal proceedings,” the Haryana RERA order said.

The order further added that if a complaint in such a case was not entertained by the authority against an unscrupulous promoter/developer, it would “frustrate” the purpose of the Act to provide relief to homebuyers.

KRERA noted that the developer had transacted with the homebuyer even after the RERA Act was enacted in the state. “Hence the cause of action to file this complaint was alive even after the coming into force of this Act. The question of maintainability as contented by the developer has no basis,” the order stated.

KRERA concluded that the developer had returned a major portion of the amount but withheld a part of it while failing to give reasons for the same. Additionally, the order asked the developer to return the due amount within 60 days.

Karnataka HC findings

Karnataka HC cited the Supreme Court (SC) judgment in Newtech Promoters and Developers vs the State of Uttar Pradesh (UP) to clarify the “ongoing” status of a project. The SC order said that in cases where only the issuance of a completion certificate was pending, the legislature intended that even those projects have to be registered under the RERA Act.

The Newtech judgment further added that Section 3(2)(b) of RERA Act specifically excludes projects where a completion certificate has been received before the commencement of the Act and which need not be registered under the Act.

The Karnataka HC added that, “With regard to the explanation of ‘ongoing project’ under the rules which exempts the application of the Act, since a partial occupancy certificate was issued prior to coming into force of the Act, the complaint was not maintainable before the Authority.”

Thus, the court concluded that, “The order passed by the Authority is without jurisdiction and a nullity in law.”

Diverse judgements on similar cases

Right to Information (RTI) activist and Bangalore City Flat Owners’ Welfare Association President Anil Kalgi cited an observation in the order that read, “If the Authority had no jurisdiction to pass the order, the developer’s petition (against paying the refund) becomes maintainable.” Kalgi added: “The interpretation of this can be diverse. The HC order did not expand on the validity of the partial OC. If the project was complete, why was a partial OC obtained? The homebuyer can appeal again,” he added.

In Karnataka, several courts and KRERA orders have challenged the validity of partial OCs, as according to BBMP (Bruhat Bengaluru Mahanagara Palike) Byelaws, 2003, partial OCs can only be granted for certain floors in a project. This has also been laid down in a 2013 HC order in the case of IBC Knowledge Park on Bannerghatta Main Road, Bengaluru.

Pointing to a March 11, 2022, Karnataka HC ruling in Total Environment Building vs. Verghese Stephen, advocate Chaitanya SG said that there was no concept of a partial OC under RERA. Additionally, “The HC has ruled that no person shall occupy a building until a complete OC has been granted,” he explained.

Advocate Vittal BR, added: “Diverse judgements on similar issues will tend to confuse homebuyers, and more importantly, the future legal discourse. The SC clearly states that similar cases must be treated alike.”

Chaitanya said that under RERA Act Chapter II (3), whether a construction was an “ongoing project” or not was decided by a completion certificate. “The central Act does not refer to an OC for defining an ongoing project. The central RERA Act lays down model rules on the basis of which states notify their own rules. In which case, can states dilute or override central rules?” he added.

It is unclear whether in the case of Provident Sunworth the partial OC was obtained for certain floors or the entire project.


MahaRERA Allows Extension Of Property Registration Without Majority Consent

To ensure that delayed real estate projects are completed, the Maharashtra Real Estate Authority (MahaRERA) has allowed developers to apply for extension of property registration without the need for consent of 51 percent of homebuyers.

Developers will be required to state the reason why registration should be extended without such consent. MahaRERA also asked developers to declare their interest in multiple real estate projects during registration, a step that would help homebuyers to take an informed decision.

MahaRERA, in its order, said developers do not get consent homebuyers’ consent often despite being willing to complete an unfinished project. The order states: “It has been noted with concern by the Authority that in matters regarding extension of project registration under Section 7 (3) of the Act when promoters are seeking consents from the concerned association of allottees consisting of a majority of allottees who have booked their plot or apartment or building in the real estate project, the consents are not being provided for the following reasons (not exhaustive).”

The three reasons mentioned in the order include homebuyers’ concern that their complaint to the Authority would be dismissed, that relief would not be forthcoming if the consent is given and lack of confidence that the developer would complete the project. When homebuyers do not consent to the renewal of registration, it stops the developer from executing a project. This, the order said, is not in favour of homebuyers.

Developers shall submit the consents as obtained from the allottees irrespective of the number of such consents along with reasons why the required percentage of consents from allottees could not be obtained and why the application for extension should be considered without the required 51% consent.

Developers have been asked to additionally submit an explanatory note, setting out the grounds and reasons for the delay in completion of the real estate project as well as setting out the need for a grant of extension along with documents supporting such grounds and reasons. The promoters were also asked to state the steps they would take to complete the project within the extended period sought.

The order adds, “Application of extension of validity of the project registration shall be accompanied with the prescribed fees calculated in the manner as stated in Rule 7 (3) of the Rules. The grant of extension of the project validity shall not affect/jeopardise the rights accrued in favor of the allottees who have booked their plot, unit or apartment, or building in the said real estate project as the case may be for which extension of project validity is sought.” Experts say the order may be in good faith, but it can be challenged in a court of law.


Soon, West Bengal Real Estate Projects Will Be Registered with RERA

West Bengal’s newly established property regulator anticipates that all existing projects in the state would be registered under the Real Estate (Regulation & Development) Act, 2016 within three months, relieving buyer worries about completion timelines and quality.

Not-yet-completed projects promoted, advertised, and sold without Real Estate Regulatory Authority (Rera) licences are among those required registration with the West Bengal Rera.

The state regulatory chapter commenced operations around 18 months after the Supreme Court invalidated the state’s own law, the West Bengal Housing Industry Regulation Act of 2017. (WBHIRA). In February of 2014, the Supreme Court ordered the state to immediately adopt Rera.

“According to the guidelines set out by the WBRera authorities, within three months after the creation of the Rera authority in the state, all projects in the state that were previously promoted without licence and have yet to be finished must be registered.

2022 homeowners grouped under the name of the Forum for People’s Collective Efforts (FPCE) wrote to the chief minister in August, requesting that he intervene and deliver the required directives to make Rera and the Real Estate Appellate Tribunal operative under the central Act.

It had highlighted concerns around unregistered launches, extra money collecting, and “diversion.”

It is a positive beginning and will inspire trust in homebuyers. However, the web site is not yet operational, and a method for filing complaints online will assist homebuyers in the future, according to a worried individual.


Haryana RERA penalises five builders in Gurugram for delayed delivery

The Gurugram bench of the Haryana real estate regulatory authority (HRERA) has imposed penalties of Rs 25 lakh each on five builders after they failed to deliver their housing units to buyers on time. The regulator, however, allowed the realtors’ RERA registration certificates to remain in force with new timelines for completion of their projects.

As per the official statement, Identity Buildtech Private Limited has been fined for not completing its project Ansal Highland Park at Sector 103 within the declared timeline of June 2022. In this case, the authority has allowed the RERA registration to be in force till May 2024.

Similarly, a penalty of Rs 25 lakh has been imposed on BPTP Limited for not completing its project Park Terra at Sector 37-D, Gurugram. The deadline for this project, which was April 2022 earlier, has been extended till April 24.

Another developer Advance India Projects Limited has been penalised for its failure to complete the construction of Zen Residences -1 group housing project at Sector 70-A, Gurugram, the statement said.

Also, a penalty of Rs 25 lakh has been imposed on KLJ Realtech Private Limited for not completing the construction of its commercial project KLJ Square at Sector 83, Gurugram within the declared timeline of June 2021.

While allowing the RERA registration to remain in force for Spaze Towers Private Limited for its project Ishan Singh Commercial at Sector 78, Gurugraam, till December 2025, the authority has imposed a penalty of Rs 25 lakh on the realtor. The project was to be completed by 2020-end, it added.


H-Rera fines developer ₹2.5 crore for selling plots in unregistered project

The Gurugram bench of the Haryana Real Estate Regulatory Authority (H-Rera) on Wednesday said it has imposed a penalty of ₹2.5 crore on Brahma City Private Limited, a real estate promoter, for violating provisions of the real estate (regulation and development) Act of 2016.

H-Rera observed that the developer sold the plots without registration of project in violation of Section 3 of the Act 2016, for which penal proceedings were begun by the authority. It also observed that the promoter made the conveyance deeds of the plots in the unregistered areas of the project on different dates.

While examining the documents during a hearing on November 21, the authority observed that the promoter sold as many as 219 plots without getting the project registered with H-Rera, a serious offence of the Act, 2016.

“For violating the provisions of Rera, the authority has decided to impose a penalty of ₹2.50 crore on the promoter for not applying for registration of its ongoing project within time allowed and allowing sale of plots in violation of the provisions,” said the H-Rera order of December 9.

A statement released by the authority on Wednesday said the order includes a warning to the promoter not to violate the provisions of the Act, directing the promoter to deposit the penalty within one month of the issuing of notice.

“In case the promoter fails to deposit the penalty as imposed by the authority, it will be recovered as arrears of land revenue and further proceedings will be initiated against the promoter under Section 63 of the Rera Act, 2016,” said the order.


Orissa HC seeks clarification on flats’ registration

The Inspector General of Registration (IGR), Odisha on Wednesday clarified before the Orissa High Court that the restrictions imposed on registration of apartments will not be applicable to projects which had received completion certificates from competent authority prior to May 1, 2017, the date of commencement of the Real Estate Regulatory Authority (RERA) Act 2016.

IGR had on July 14 issued a public notice stating that the restrictions will not be imposed on any project ‘completed’ before implementation of RERA Act 2016. But the court had asked the IGR to properly clarify the word ‘completed’ as it can lead to ambiguity. IGR Jyotiprakash Das gave the clarification in an affidavit.

Taking note of it, the division bench of Chief Justice S Muralidhar and Justice MS Raman directed the IGR to notify the clarification again promptly as a ‘corrigendum’ and give wide publicity so that the ambiguity attached to the word ‘completed’ in the public notice issued on July 14, 2022 is dispelled.

The court was hearing a PIL filed by a Bhubaneswar-based apartment owner Bimalendu Pradhan challenging the validity of the Odisha Apartment Ownership (Amendment) Rules 2021 on the ground that it is contrary to provisions of the RERA Act, 2016. Advocate Mohit Agarwal argued on behalf of the petitioner. In an interim order on May 12 the court had directed the IGR to strictly ensure that the sale deeds registered hereafter abide by the RERA Act and rules thereunder.


Haryana RERA asks developers to seek upgradation in RERA Act

Haryana RERA Chairman KK Khandelwal called upon real estate developers and builders to come together to seek modifications and upgradation in the real estate act so that it’s loopholes, if any, get rectified and both industry leaders and homebuyers stand to gain.

Khandelwal was addressing the day-long NAREDCO Haryana Real Estate Summit 2022 & Buyer-Seller Interface held on November 29 at Gurugram.

The Summit was organized by National Real Estate Development Council (NAREDCO), an apex real estate body that works under the Ministry of Housing & Urban Affairs.

While addressing the queries of developers, Khandelwal said that the current RERA act have a few loopholes that have existed for the last five years.

“The RERA Act ensures transparency and establishes faith of the homebuyers in the industry. We are for completion of projects and believe that loopholes, if there are any, should be addressed,” said Khandelwal.

He asked industry leaders to exert their influence under the banner of NAREDCO (National Real Estate Development Council) to the right quarters of the government so that necessary changes are effected in RERA and both buyers and sellers have no problems with it.

“I have been raising the issue of lacunae in the RERA Act for the last couple of years to inspire the industry for necessary corrections during various interfaces with little success, because industry leaders did not follow up the issue with policy makers. That is why changes in the act have not yet happened,” said Khandelwal.

He stressed that the NAREDCO should form an expert and core groups and study the Act in an objective manner and find out what is correct and incorrect in the legislation.

They should then submit recommendations to the government so that corrective measures are initiated.

Among others who were present in the summit included Ranjit Singh, Power Minister, Government of Haryana, Rajan Bandelkar, President NAREDCO and Niranjan Hiranandani Vice Chairman NAREDCO.

Haryana’s Power Minister Ranjit Singh said that the government will try its best to solve the problems of power sector for industry and other developers so that the economic development of the state does not suffer.

“A cabinet meeting would be held in the first week of December, in which permission will be taken to address the issue of power problem in Haryana. A majority of power-related problems would be sorted out to the best of the availability of the power department of the state,” said the minister.

The minister reassured the real estate developers and builders to organise an interface with the government officials of the power sector and apprise them of their problems for quick redressal.

In a statement released after the summit, Parveen Jain, Chairman, NAREDCO said that the goal is to maximise the effectiveness of existing policies and the RERA Act.

“The brainstorming sessions held at the summit surely provide the sector with a road map for the anticipated growth as all policymakers, industry executives, and experts have joined this platform to identify solutions to existing issues and compliances in light of the evolving regulatory landscape,” Jain said.


HC seeks MahaRERA reply on 1.5 yr delay in hearing complaint

The Bombay high court has sought a reply from Maharashtra Real Estate Regulatory Authority (MahaRERA) regarding a homebuyer’s plea that the housing regulator has not taken up her complaint for hearing for the last one and half years.

Homebuyer Geeta Bhavesh Bhanushali had filed a writ petition in the high court after her complaint was not taken up by MahaRERA for hearing.

Lodha and Lodha Advocates, appearing for the petitioner, contended that their client’s grievance was that MahaRERA had not scheduled a hearing of her complaint for the last one and half years.

A bench comprising Justices SV Gangapurwala and SG Dige directed assistant government pleader Uma Palsuledesai, who appeared for the state, to take instructions from MahaRERA and inform the court on the status of the petitioner’s complaint and cite the reasons why it has not been listed for hearing. The court scheduled the next hearing on December 12.

Bhanushali, her husband Bhavesh, and father-in-law Kalyanji Bhanushali are residents of flat no 903 in the B wing of Tirumala Habitat project in Mulund West. They had booked the flat in June 2011 by paying ₹1.12 crore including taxes. Though the agreement for sale promised possession on or before September 30, 2014, the possession was delivered only in September 2019 after a delay of five years, the complainant alleged.

The complainant also alleged that she was shocked when the family received the first property tax bill on November 16, 2019 from the Municipal Corporation it showed flat nos 903 and 904 approved as a single flat. She had approached MahaRERA with a complaint seeking interest on delayed possession and prayers for sub-division of the flat among other grievances.

Over 6000 complaints pending with MahaRERA

In a related development, social activist and advocate Godfrey Pimenta, who represents homebuyers before MahaRERA, wrote to chief minister Eknath Shinde that homebuyers of stalled projects were complaining that hearings before MahaRERA are “unduly” delayed, in some cases, for close to two years.

The letter said there were 38,750 ongoing real estate projects registered with MahaRERA and a total of 19,290 complaints filed with the regulator. Out of these,12,971 complaints were disposed of and 6,319 complaints were yet to be heard.

The letter submitted through Mumbai Suburban Collector Nidhi Choudhari to the CM pointed out that a recent JLL report had estimated that there were 99,000 stalled residential units in MMR, and delays in hearing cases pertaining to Section 7 and 8 of RERA which seek deregistration of a delinquent developer and appointment of a new developer further compound the misery of homebuyers.