CREDAI advises home buyers to purchase only in RERA-registered projects

The CREDAI (Confederation of Real Estate Developers’ Associations of India) has asked the Telangana Government to keep tabs on the extremely unhealthy and illegal practices by some real-estate players that are luring gullible customers into buying spaces in unviable projects.

Asking the Government to strengthen the RERA (Real Estate Regulatory Authority) to curb these practices by initiating stringent punishment against the players that are cheating the people.

“Some real-estate operators and some others without having any experience in the business are coming out with attractive schemes and offering to sell undivided share of land even before securing approvals,” P Rama Krishna Rao, President of CREDAI Hyderabad, has said.

The leaders of CREDAI have gathered here on Friday to caution the public about the unhealthy marketing strategies of some realestate players.

“They are selling such products at a nominal and discounted price to lure innocent home-buyers and investors. The cost at which they are selling the properties is not sufficient to cover the cost of construction,” he said.

He alleged that the proceeds were not being on the projects. “Sometimes the projects do not get launched or get delayed indefinitely due to many legal and statutory issues, putting the purchaser at a huge risk,” he said.

Ch Ramchandra Reddy, Chairman of CREDAI Telangana, said that the realestate market in the State continued to be resilient and robust post the Covid-19 waves unlike other cities in the country.

“The developers should not sell plots or flats to prospective purchasers without getting RERA registration. Purchases made in projects without RERA registration are risky for the buyer,” he said.

Source: https://www.thehindubusinessline.com/news/real-estate/credai-advises-home-buyers-to-purchase-only-in-rera-registered-projects/article37704417.ece

Govt asks local bodies to upload construction permissions to their websites, link them with MahaRERA

To prevent fraudulent practices on the part of builders and developers, the Urban Development Department of the Maharashtra government Thursday directed all local bodies to upload permissions granted for commencement of construction and occupancy to builders for new and upcoming residential and commercial projects on their website and integrate them with the Maharashtra Real Estate Regulatory Authority (MahaRERA) before March 31, 2023.

These permissions are in the form of Commencement Certificates (CCs) that allow builders to start construction of a building and Occupancy Certificates (OCs) permitting residents to move into the building once the construction is complete.

In case the local bodies do not have websites for this purpose, the Urban Development department directed them to design and activate the websites and integrate them with MahaRERA before March 31, 2023. Meanwhile, all local bodies have been directed to email the permissions to MahaRERA. The local bodies will have to communicate updates in the permissions to RERA each time. A government resolution to the effect was issued by the Urban Development department on Thursday.

“In case of Mumbai, Brihanmumbai Municipal Corporation (BMC) already has a mechanism to publish these permissions online and integrate it with RERA,” an official said.

Last year, it had come to light that builders in Kalyan Dombivali constructed buildings without requisite permissions from the local bodies and sold apartments in these buildings by creating fraudulent documents of permission. A senior official said, “These documents are submitted to RERA with a self-declaration from the builder, who submits an affidavit. However, until now, there was no way for RERA to verify if these documents are original. If a fraudulent document is submitted with the signature of the concerned authority, it is taken as an original permission.”

“RERA wrote to the Urban Development department last year requesting it to develop a mechanism where documents can be verified, following which these provisions were made,” the official said.

Source: https://indianexpress.com/article/cities/mumbai/govt-local-bodies-construction-permissions-websites-maharera-8464551/

MahaRERA brings transparency into Real Estate Sector

The aim of the MahaRERA mechanism is to bring transparency in the sector to help the homebuyer, its chairperson Ajoy Mehta said on Saturday.

He was speaking at a function organized by National Real Estate Development Council (NAREDCO) on ‘RERA Updates and Insights’ in Navi Mumbai.

“Only when the real estate industry survives will the homebuyer gain. We will hold workshops organised by MahaRERA and NAREDCO to help developers gain clarity over compliances,” he said.

While builder and NAREDCO vice-chairperson Niranjan Hiranandani said MahaRERA must speed up the process of giving approvals, Sanjay Dutt of Tata Realty and Infrastructure said institutional funds were flowing into the real estate industry at a good pace.

The industry is likely to attract investments of Rs 3 lakh crore over the next three to four years, Dutt claimed.

The Real Estate Regulatory Authority has helped the real estate sector gain respect due to regulations and professionalism, including the option for exit through deregistration of a project, NAREDCO president Rajan Bandelkar said.

Meanwhile, Sanjay Deshmukh, MahaRera nodal officer for lapsed projects, urged developers to improve the quality of the uploaded data.

“Around 75-80 per cent of participants were falling short on quarterly filing timelines,” he said. PTI COR BNM BNM

Source: https://theprint.in/india/maharera-brings-transparency-into-real-estate-sector/1381736/

MahaRERA offers exit option to realtors, but with conditions

The Maharashtra Real Estate Regulatory Authority (MahaRERA) on Friday issued an order laying down conditions that include protecting the rights of homebuyers.

The developers can now deregister their real estate projects themselves.

MahaRERA Secretary Dr Vasant Prabhu, in the order, cited instances where promoters who have registered their projects are unable to commence and complete the construction, or have commenced the construction but are not in a position to complete the construction.

The reasons could be lack of funds, economically unviable projects, litigations, inter se disputes, family disputes, change in planning, or government notifications. Keeping these projects registered with the authority is not beneficial for stakeholders, the regulatory body has said.

MahaRERA’s conditions for de-registration

Therefore, MahaRERA has now set out conditions for deregistration. Only projects where not a single booking has been received will be considered. In case there are purchasers, the onus to settle the rights of such allottees will be on the affected developer.

Additionally, if a part of the project getting deregistered is affecting the rights of the remaining project, two-third consent from allottees is mandatory while submitting the deregistration application. Aggrieved persons other than the builder can move MahaRERA by lodging a complaint.

Mixed reactions from real estate industry

In the real estate industry, this order has been received with mixed reactions. While realtors have welcomed it as it provides them an exit, the buyers are somewhat unhappy. Purchasers said there is a need to lay down more stringent conditions as the developers are known to not just keep home purchasers but also MahaRERA in the dark by not updating the status of the project. Moreover, the orders passed by the regulator are barely honoured by the real estate fraternity, earning MahaRERA the monicker of a toothless tiger.

Source: https://www.freepressjournal.in/mumbai/mumbai-maharera-offers-exit-option-to-realtors-but-with-conditions

In a first MahaRERA establishes counselling set up for Homebuyers, Developers

In a first, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has established a counselling set up at its Bandra Kurla Complex headquarters to help both homebuyers and developers understand the modalities and operations of the authority.

The move is expected to help homebuyers get better support from the regulator and improve compliance by developers. Through this set-up, homebuyers can resolve their queries regarding the complaint mechanism, while the developer will also be able to clarify several doubts.

The counsellor will have an office on the fourth floor of the MahaRERA office. Homebuyers facing any issues in their projects may want information about the process to seek relief under RERA provisions. The counsellor will be able to explain how to file online complaints, how to monitor the complaints on our portal etc. What is the difference between the conciliation forum which resolves grievances out of court and filing formal complaints etc.

Similarly, developers may also need advice on various aspects as registration of their ongoing project is mandatory. There are multiple forms and compliances. Developers can also seek advice on how to update the information of their ongoing project every quarter as required by the Act, how to manage the money allocated for the project, the statutory audits required etc.

Earlier, the state housing regulator had appointed a nodal officer to monitor the recovery warrants issued for refunds by the Authority. The authority had written to 13 district collectors to provide special assistance to execute these warrants, and the move resulted in the recovery of Rs 100 crore of refund money from errant developers. Similarly, the nodal officer has also issued show cause notices to over 19,000 projects registered with MahaRERA to ensure that the companies update the information about the progress of their projects every quarter as mandated by RERA.

Source: https://www.rprealtyplus.com/news-views/in-a-first-maharera-establishes-counselling-set-up-for-homebuyers-developers-109477.html

UP RERA addresses 88 Percent Complaints

Uttar Pradesh RERA has achieved 88 per cent success in solving the grievances of the people since its inception in 2017. From May 1, 2017 to December 2022, more than 47,000 complaints were registered and about 42,000 complaints have been disposed of. Thus, a total of 88.14 per cent grievances of consumers have been successfully redressed.

Besides, about 12,800 requests of order execution have been received in which compliance of final order was successfully executed 9,900 requests, which is about 77 per cent. This was disclosed in a press statement issued by the RERA here on Friday.

In 2021, about 8,600 complaints were registered and about 8,400 were disposed of. In 2020, about 8890 complaints were registered and about 8670 complaints were disposed of. In 2019, about 12600 complaints were registered and about 12800 were disposed off.

Similarly, in the year 2018, about 8,300 complaints were registered and disposal was done in about 2,500 cases. However, only about 110 complaints were disposed of against 1,650 registered in 2017.

The highest numbers of complaints have been registered against 46,400 promoters, while about 500 complaints have been registered against allottees and about 200 complaints against agents.

As many as 35,900 complaints have been registered in eight districts of NCR, almost 76 per cent of total complaints, and 31,800 have been successfully disposed of.

Gautam Buddha Nagar in NCR and Lucknow district in non-NCR are at the first and second positions respectively with 28,450 and 8,600 complaints, followed by Ghaziabad (6,470), Varanasi (850) and Meerut (800).

Source: https://www.thestatesman.com/india/up-rera-addresses-88-pc-complaints-1503150452.html

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.

Source: https://www.ipropunited.com/news/majority-of-delhi-realtors-are-avoiding-rera-registrations-of-the-projects/

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.

Source: https://www.moneycontrol.com/news/business/real-estate/failed-to-deliver-house-gurugram-rera-orders-promoter-to-refund-full-amount-with-interest-9890531.html

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.

Source: https://www.moneycontrol.com/news/business/karnataka-rera-has-no-jurisdiction-over-project-granted-partial-oc-before-enactment-of-rera-karnataka-hc-9824211.html

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.

Source: https://www.rprealtyplus.com/news-views/maharera-allows-extension-of-property-reg-without-majority-consent-108950.html