Category: HI & RERA

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has introduced standardised allotment letters for developers in a bid to bring in transparency and minimise buyer-seller disputes.

The newly introduced allotment letter would require developers to mention the date of handing over the possession of the booked property, percentage of charges levied on cancellation of booking, parking allotment and other details.

MahaRERA officials said that a standard allotment letter has been readied in a bid to bring in uniformity and safeguard the interest of flat buyers and developers.

The allotment letter prescribes the minimum period within which the booking can be cancelled and the upper limit of the percentage of the amount to be deducted in case an allottee desires to cancel the booking.

“The promoter may increase the number of days within which the booking can be cancelled as well as decrease the percentage of the amount to be deducted in the event of cancellation of the booking,” the letter stated.

Developers need to upload the allotment letter or the amended form of allotment letter at the time of applying for registration of the real estate project, said officials.

In case of non-compliance of the same, the application for registration of the project shall be liable to be rejected.

All MahaRERA developers would have to follow the model allotment letter or face action, stated consumer activists.

There is a provision in the MahaRERA that if a developer fails to follow the notification circular, then the real estate authority could slap a fine up to 5% of the project cost.

The same would be applicable to developers in the event of their not accepting the model allotment letter format, said Ramesh Prabhu, activist and chairman of the Maharashtra Societies Welfare Association.

Earlier, there used to be no mention of the cost of a flat in the allotment letter, but now, as per the model allotment letter, the builder has to mention the value of the property. According to the model allotment letter, in case of cancellation of a flat booking after 60 days, a developer can only charge a maximum of 2% of the cost of a flat as forfeiture fees.

Advocate Manjunath Kakkalameli told TOI that the standardised allotment letter would save flat buyers from legal loopholes. “Earlier, there were some issues with allotment letters as they did not meet the provisions and rules of MahaRERA and buyers had a trying time getting possession of their flats. This model letter will bring in transparency and help in reducing legal hurdles,” he said.

Some builders have expressed concern that small developers may avoid MahaRERA registration. “While big builders in metro cities will abide by the rules, developers in smaller cities and districts may not adhere to the model allotment letter,” said a leading builder in the state.

Source: http://timesofindia.indiatimes.com/articleshow/92626283.cms

The validity of MahaRERA registration of over 4,500 real estate projects in the state with more than 3,50,000 flats has lapsed, as per the official MahaRERA website. However, there is no mechanism in place to check if these projects are continued to be marketed, despite promoters being barred from selling the flats. In view of this, experts have called for a special vigilance cell.

Advocate Godfrey Pimenta, who practises in MahaRERA, said, “As per MahaRERA, in the past 5 years, 36,000-odd real estate projects were registered and the registration of about 4,500 or 12 per cent of the projects have lapsed. It is estimated that around Rs 80,000 crore is stuck in such projects.”

Association of Allottees

“In RERA, there’s a provision for takeover of stalled projects by Association of Allottees or flat buyers. Last week, retired IAS officer Sanjay Deshmukh was appointed to lead a team of experts to guide on solutions to revive the stalled projects. It would be advisable to refer all cases of stalled projects under Sections 7 & 8 of RERA to this particular team so that hearings get priority. Secondly, some mechanism, such as a vigilance cell, should be in place, otherwise developers will continue to sell flats at such lapsed projects to unsuspecting buyers. Thirdly, the team under Deshmukh will need legal sanctity to enforce recommended solutions,” Pimenta added.

CA Ramesh Prabhu, founder of MahaSEWA, said, “Though it is a requirement of RERA for promoters to facilitate registration of Association of Allottees on booking of more than 50 per cent flats, only few promoters take such initiatives. And even if allottees want to register the association, the list of allottees is not made available by the promoters under the confidentiality of data. Thus, the association of allottees becomes a non-starter.”

“The order of MahaRERA regarding Revival of stalled projects requires that more than 50 per cent of allottees in the projects should register an Association of allottees and file an application under section 7 and 8 of RERA to take over the project for completing the balance work. So far, we have not seen any proactive steps initiated by MahaRERA. We have recently known that Sanjay Deshmukh, a retired IAS officer, has been engaged by MahaRERA to initiate necessary steps to revive and complete the stalled projects. This is a welcome move,” said Prabhu.

Lapsed Projects

Advocate Vinod Sampat, founder and president of Flat Users Residents Welfare Association, said, “One sector where MahaRERA intervention is urgently required is lapsing of real estate projects. To a certain extent, the problem can be sorted out by appointing a special vigilance cell with powers to regularly scrutinise complaints pertaining to lapsed projects. The need of the hour is to install an element of fear in the minds of builders.”

Advocate Nilesh Gala from Practitioners Welfare Association said, “As per the circular issued by MahaRERA, if the validity of the registration expires then the promoter will not be able to register any Agreement for Sale as the sub-registrar has to check the validity of the certificate issued by MahaRERA for the project.” Estimated amount stuck in such projects is around ₹ 80k cr.

Source: https://www.mid-day.com/mumbai/mumbai-news/article/maharera-registration-of-over-4500-real-estate-projects-in-state-lapsed-23233356

Five years since the Maharashtra Real Estate Regulatory Authority (MahaRERA) came into existence in the country’s financial capital, it has received 17,061 complaints against developers, of which it has disposed of 11,287. Of these, more than 50% of the complaints are by homebuyers in the Mumbai Metropolitan Region, MahaRERA chairman Ajoy Mehta tells Moneycontrol’s Mehul R Thakkar. Edited excerpts:

What has been the Authority’s role with regard to enforcement of MahaRERA orders? What is the Authority doing to address the issue?

RERA has three distinct roles, of which the first is that of regulatory oversight, which touches the question of enforcement. Second role is adjudication where a dispute has arisen between the flat buyer, promoter or the plot buyer, followed by overall housing policy…We are bringing in a lot of things to ensure that regulatory oversight is strengthened. The fundamental principle that I am following in strengthening regulatory oversight is transparency. This is because I personally, strongly feel that once a flat buyer and flat seller has an equal amount of information, that is when the buyer will make a correct decision. So we are revamping the regulatory oversight process to ensure all information comes out in the public domain. Once we implement the law correctly, litigation will automatically stop. We need to ensure that the compliances are done properly by promoters.

Are redeveloped/under-redevelopment projects covered under MahaRERA? What is the authority doing to address the problem of projects under redevelopment?

As far as the RERA Act is concerned, it is very clear that those that are under redevelopment are not covered under the Act. But, of course, the sale component of the redevelopment is covered under the RERA Act wherever money is involved. However, where something is given in lieu of something you owned is not covered under RERA. This is what the Act says and as an authority we are the interpreters of the Act…The question of what we are doing to address the problem of projects under redevelopment is best addressed to the government because they are the lawmakers.

How many complaints have been filed in the last five years and how many cases disposed of? What percentage of cases is from the Mumbai Metropolitan Region (MMR), Pune, etc? Which area has witnessed the maximum number of complaints?

A majority of the complaints are from Mumbai or Mumbai Metropolitan Region (MMR). This is followed by Pune… However, now we are putting a lot of things in place so that these complaints come down. Much more than 50% complaints are from Mumbai, but if you see that predominantly they are pre RERA-project complaints, which have now got carried on. Post-RERA, we are not finding much of this happening. As of May 24, 2022, we have around 5,000 complaints pending. We have disposed of more than 11,000 complaints out of the more than 17,000 complaints that we have received till now.

Has the Conciliation Forum formed under the Real Estate (Regulation and Development) Act, 2016 (RERA) and MahaRERA to facilitate dispute settlement between homebuyers and developers benefited buyers? How many cases have been settled over the last few years/ last one year?
The good thing is that this conciliation forum has been very beneficial for buyers. In the first hearing, when the homebuyers come to us, we ask them if they want to go in for conciliation…In the forum, once the buyers get favourable results and consent terms are signed, the matters are resolved very fast. Whereas when we pass an order, one side is happy and the other side is not, which leads to appeals and more litigation So, we are trying to encourage the Conciliation Forum in a big way. Now, we find that nearly more than 60% of the complainants are preferring reconciliation and the success rate of the forum is also very good. Also, we have told people that you go for reconciliation, and if you do not succeed your case is still with us. We are not throwing out their case and they remain in the queue. But while they are in the queue, we tell them to try reconciliation. If you succeed, it is a win-win situation for both the parties… This is resulting in 60% of complaints getting settled in the Conciliation Forum within 90 days.

Have promoters and homebuyers reached settlements in respect of recovery certificates? What does this amount to?

In the last five years, we have issued 751 recovery warrants against developers of around Rs 717 crore. Let me tell you that in following the issuance of recovery certificates, there is a process to be followed before and after. Sometimes people feel that once a RERA order is issued, things will work out immediately. But there is a process to be followed wherein suppose we pass an order saying ‘refund the money’ but the promoter does not refund the money. Later, what we do is we issue a revenue recovery certificate (RRC) to the tehsildar, saying ‘please take this property of X and sell it off and give the money to say Y.’ The minute the RRC goes to the tehsildar, he cannot say now this property is taken over. He has to examine the title of the property. Maybe someone else is the part-owner, and the whole process is followed. These processes take time and they reach a conclusion. However, once you have got the order of RERA in your favour, the wheels of justice have started moving. It will take time but it will reach its destination.

Should the RERA Act be amended to make financial institutions accountable for the completion of projects backed by them?

I will refrain from commenting on where what needs to be amended. This is because I clearly know what my role is, and I am not the lawmaker. It will be very incorrect for me to say what should be amended or what should not be. But only one thing which I tell everyone is please remember RERA is a very young law as compared to others and is just five years old. There are lots of ideas and I feel let us all not rush to the conclusion that my idea is the best idea. This is because when you amend the law, please understand that any law which is amended must stand the test of time. The amendment should stand because we cannot get up tomorrow and say that this amendment is wrong, and we again should do an amendment. More and more we amend a law, it is not a good sign, and it dilutes or does not serve the purpose that you wanted it to serve. But what I am saying is that every law needs to grow, expand, but give it time and thought. Let us not just jump to conclusions because it is a very infant law. Until last year, all the hearings were of pre-RERA (cases), and it is only now that things are taking shape.

There have been allegations that the orders or directions issued by RERA are not complied with by the promoters, and consumers are left to go to the court.

Once you have a RERA order in your favour, something has already started, and it takes time. It takes time because the process of justice takes time. But justice is given and the way we are giving it is by the Conciliation Forum.

What is the pendency rate? How much time does it take to complete a hearing and passing an order in one particular case?

We are having a pendency of 5,000 cases. Until now, we were hearing cases of 2019, and now we have started hearing cases of 2020. Once the first hearing is taken, we are ensuring that we pass an order in, say, three to four months. We are working on ensuring we do not give too much time for simple submission of reply or documents.

What is the one thing that you want to change when it comes to MahaRERA? What is your message to the homebuyers and developers?

My message to buyers is to try out the Conciliation Forum and not to straight away jump into disputes or litigation. If not, please come to us, we are there to give you justice. The homebuyers should make themselves aware of everything, but we also realise that buyers do not have experience. Hence, it is also for us to tell them for which we are trying to put a lot of information in the public domain. We are now also making a standard sale agreement, a standard allotment letter, and they should read that, and make a proper decision. To promoters my message is very clear that they need to put all the information out in the public domain very transparently. They need to understand the risk of the project because every risk converts into time and money. If the project has zero risk, it will certainly get completed on time. Promoters need to see risks and they are supposed to give timelines accordingly. Build in your costs and risks properly into the project and later inform the client… The promoter has all the information about the project, and we are now working (to ensure) that things should come out very transparently and in simple language. We are ensuring we monitor projects continuously. Regulatory oversight is very important for there being no litigation, and for this we need to have improved scrutiny.

Source: https://www.moneycontrol.com/news/india/coronavirus-update-daily-covid-19-positivity-rate-over-3-8676991.html

Bombay high court confirmed an order of the RERA (Real Estate Regulation and Development Act) appellate tribunal directing a builder to first deposit 100% of the interest to be paid to buyers for delay in handing over flats at a project called Wintergreen in Borivali, as a pre-condition to hearing its appeal.

The HC, however, accepting an undertaking by the builder-CCI Projects Pvt Ltd-and gave it 5 months to deposit over Rs 19 crore before the Tribunal, of which Rs 5.5 crore is to be paid in 4 weeks.

The builder said it would in 4 weeks deposit Rs 33 lakh-30% of the Rs 1.1 crore ‘penalty’ to be paid to flat buyers. It will also deposit over Rs 10 lakh towards costs as directed. Failure to meet deadlines will result in dismissal of appeal pending before the tribunal, said Justices Revati Mohite Dere and Madhav Jamdar in their May 6 order.

Senior counsel Vineet Naik with counsel Mayur Khandeparkar for CCI Projects had challenged orders passed by the tribunal under the Rera Act for directing it to deposit 100% deposit “without recording any reasons.” Naik said section 43 (5) of the Act gives the tribunal discretion to seek deposit of at least 30% of the amount and “in many other matters the appellate tribunal has directed deposit of much lesser amount.”

The HC also heard counsel Rui Rodrigues for the Central government and counsel Vinodini Srinivasan with advocate Avinash Pawar for the flat buyers. Srinivasan pointed out that the Act provides for a minimum 30% deposit only of the ‘penalty’ imposed, not other amounts. She said thus pre-deposit of the entire amount before appeal is entertained, is mandatory.

Naik said the project is complete and flats handed over to purchasers. He said the MahaRERA order is only for compensation for delay caused and, therefore, complaints flat buyers should have been dismissed.

Naik also said there were 173 complaints filed by flat buyers, of which 69 are settled and 83 are pending for hearing before the Authority and 19 pending for conciliation. There were 112 appeals before the tribunal, of which 42 appeals are settled and in 53, order of pre-deposit was passed.

Naik then sought some time saying the builder is willing to make the deposit in five months and offered an undertaking to pay the interest deposit in five months and also offered not to create third party rights in four shops at Arcade, Rivali Park in Borivali, worth about Rs 12 crore.

The HC directed that in case of any settlements between builder and flat buyers within five months, the builder would be at liberty to seek modification of its order.

Section 43(5) of the Act envisages the filing of an appeal before the appellate tribunal against the order of an authority or the adjudicating officer by any person aggrieved and where the promoter intends to appeal against an order of authority or adjudicating officer against imposition of penalty, the promoter has to deposit at least 30 per cent of the penalty amount or such higher amount as may be directed by the appellate tribunal. Where the appeal is against any other order which involves the return of the amount to the allottee, the promoter is under obligation to deposit with the appellate tribunal the total amount to be paid to the allottee which includes interest and compensation imposed on him, if any, or with both, as the case may be, before the appeal is to be instituted.

Source: https://timesofindia.indiatimes.com/city/mumbai/bombay-high-court-tells-builder-to-deposit-100-interest-to-be-paid-to-flat-buyers/articleshow/91776238.cms