Odisha notifies amended real estate regulation rules

Complying with the assurance made to Orissa High Court, the State government on Monday notified the Odisha Real Estate (Regulation and Development) Amendment Rules 2022. The new rules have been notified by the Housing and Urban Development department after suitable modifications to the existing Odisha Real Estate (Regulation and Development) Rules 2017.

Officials said the gazette notification of the amended rules intends to ensure smooth implementation of the RERA Act for the government and also to make its compliance easier for all stakeholders including promoters and buyers.

As per the amendments, the promoter will have to abide by the time schedule for completing the project as disclosed at the time of registration with the authority. Any imposition or increase of development charges after the expiry of the deadline of a project will not be charged from the allottees.

Besides, the allottees will also have the right to visit the site to assess the extent of development of the project and his/her apartment or plot. The amendment rules also clarify that the promoter will hand over the common areas of the project to the association of allottees after duly obtaining the occupancy certificate from the competent authority as provided in the Act.

In the absence of any local law, the promoter will hand over the necessary documents and plans including common areas to the association of allottees or the competent authority, as the case may be, within 30 days after obtaining the occupancy certificate. Besides, a number of other modifications have been made in the rules to streamline the agreement for sale of houses and make the rules compliant with the Real Estate (Regulation and Development) Act, 2016.

RERA activists who welcomed the amended rules said attempts have been made to bring clarity on the transfer of common areas to the association and give due importance to the occupancy certificate. They, however, suggested that the power to resolve disputes in the agreement should be brought before the RERA Authority and not adjudicating authority as mentioned in the rules.

The State government in the last week of August had assured the High Court to bring the amended ORERA Rules without four weeks.The notification of the amended rules assumes significance in view of the ban the court had imposed on the registration of sale deeds relating to apartments and flats without conforming to provisions of the RERA Act.

Source: https://www.newindianexpress.com/states/odisha/2022/sep/13/odisha-notifies-amended-real-estate-regulation-rules-2497717.html

MahaRERA orders developer to deduct 2%, not 10%, of the price of apartment for cancelled booking

The Maharashtra Real Estate Regulatory Authority (MahaRERA), in a recent order, directed the developer of Kalpataru Avana, a luxury real estate project in central Mumbai, to deduct 2 percent of the total price of flats, and not 10 percent, for cancellation of booking by homebuyers.

The ratio mentioned in the letter of intent (LOI) signed between homebuyers and Kalpataru Limited, the developer, was 10 percent. MahaRERA said the proportion mentioned in one of the clauses of the LOI appears to be unreasonable.

MahaRERA received six separate complaints from individuals and a company in August 2020, seeking directions to the developer to refund the entire amount paid by them along with interest and compensation under section 18 of the Real Estate (Regulation & Development) Act, 2016.

The complainants said they had not signed a sale and purchase agreement, but an LOI in 2015 which was effectively an allotment letter under settled case law.

Although no date of possession was mentioned, a period of three years had been cited as a reasonable date for completion of projects in previous rulings, the homebuyers said.

They said they had informed the developer they wished to withdraw from the project and requested a refund along with interest and compensation in July 2020. The developer got the occupation certificate for the flats in October 2021.

In response, Kalpataru filed six complaints in February 2021, seeking directions from MahaRERA to the buyers to execute an agreement for sale and purchase under section 13 of RERA and also to pay the remaining amount due to the developer with interest.

MahaRERA did not find merit in the complaints, saying the buyers had already decided to withdraw from this project and approached the authority for cancellation of their booking, alleging violation of various provisions of RERA.

MahaRERA said the developer had filed complaints after the buyers had filed theirs. In such a scenario, the buyers cannot be forced to remain in the project and execute the agreements, it ruled.

“Clause no. 20 of the said LOIs mentions the forfeiture of 10% of the total consideration value of the said flats. However, … the said booking application form provides that upon cancellation of the said flats, the promoter is entitled to forfeit 2% of the total consideration of the said flats,” MAHARera said.

It added: “Such forfeiture clause as mentioned in the LOIs appears to be unreasonable, after commencement of RERA and even it does not seem to be in consonance with the recent MahaRERA Order No. 35 in August 2022, issued with respect to the prescribed format of allotment letter, which permits the promoter to forfeit 2% amount.”

In August 2022, MahaRERA issued an order prescribing the number of days and amount that can be deducted in case of cancellation of a booking. According to the order, no amount can be deducted for cancellation within 15 days of booking, 1 percent of the cost of the unit for cancellation between 16 days and 30 days, 1.5 percent between 31 days and 60 days and 2 percent after 61 days.

An email query sent to Kalpataru elicited no response.

“This ruling will be of assistance to allottees if a higher rate of deduction for forfeiting the consideration amount is mentioned in the allotment letter,” advocate Trupti Daphtary said.

Advocate Nirav Jani, a partner at Vigil Juris, said: “MahaRERA has further legislated contractual terms between the parties wherein the allottee (home buyer) will only be penalised up to 2 percent of the consideration in case of default by allottee as well. The ruling rewrites the contract previously executed between the parties. This may be an impediment for parties to enforce clauses which have been agreed between the parties and arrive at a commercial understanding.”

Source: https://www.moneycontrol.com/news/business/real-estate/maharera-orders-developer-to-deduct-2-not-10-of-the-price-of-apartment-for-cancelled-booking-9138651.html

Pre-Rera era Supertech towers demolished, but have things changed under the new regime?

If media reports are to be believed, after the Real Estate Regulation Act (RERA) came into being, all the government officials have become careful in sanctioning building plans, builders are now fearful of the law and the judiciary is trusted as more proactive than reactive.

A fellow panelist at a TV debate emphasised that Supertech twin towers violations are pre-Rera realities. The market has changed a lot in the post-Rera world. Really? I wonder where. Are we talking about some other part of the world?

To be sure, Supertech demolition is not the first such landmark judgment that has been shaping the industry narrative. In 2014, the Competition Commission of India had slapped a Rs 630 crore fine on DLF. However, it is not about one or two defaulters but the ecosystem that supports perpetrators and definitely not the victim – the homebuyers. The C-SAT score of Indian real estate (as per Track2Realty survey) slipped from 20 (out of 100) in 2011, to 18.

All the reforms like RERA, GST, Benami Transactions and demonetisation, etc are reforms only on paper. Nothing has changed on the ground for the hapless homebuyers.

Policy interventions have only made the builders smarter in dodging the bullet. For example, one of the builders in Greater Noida West is forcing buyers to sign an advance consent that the builder is free to make any future changes in the FAR and layout. Any resistance by the homebuyers is silenced with the builder’s wrath and the two-third (needed to vet it) succumb before the mighty builder. One aggrieved homebuyer who approached the consumer commission against the unfair contract is running from pillar to post for speedy justice.

Another builder I know threatens the buyers that if they dare approach Rera against any delay or default, he will make life miserable by delaying the possession of dream homes for years with multiple counter litigations. Salaried homebuyers burdened with both rent and the EMIs can’t challenge the builder in lengthy and costly litigation. This has been a question that even the Supreme Court pointed out in its judgment against Supertech Twin Towers.

I met a harassed homebuyer who wanted to sell his under-construction apartment due to a health emergency at home. The builder refused transfer and said that he could buy back only at the same rate at which he had sold the unit four years back. So all the appreciation benefits go to the builder but the interest burden is the liability of the buyer. The exploitation doesn’t end here. Once the apartment was bought back, the buyer with a critical health emergency at home was asked to wait for the refund till the builder sells off the same unit to someone else. You are trapped in the builder’s net!

You buy a toothpaste for Rs 50 and can criticise the brand on social media if you did not like it. But you can’t criticise the builder who sold the house worth at least Rs 50 lakh with your lifetime earnings. If you do, the builder sends a statement “our legal team is looking into your issue; it is a case of defamation”. One builder has it in his Builder Buyer Agreement that anything not liked by the buyers has to be settled through an arbitrator and the buyer ceases to have any right to amplify the issue on social media. Who will be the arbitrator if the project is delayed or falls short of the buyers’ expectations? It will be appointed by the company (builder) only.

So, is the industry narrative that the landmark judgment would help reform the murky world of Indian real estate correct?

I continue to wonder when and where the wave of reforms swept the business of real estate in this part of the world. A homebuyer is trapped in the builder’s net the moment he pays the token amount. Thereon, he has no choice but to succumb to the builder’s wishes.

Source: https://www.moneycontrol.com/news/business/real-estate/pre-rera-era-supertech-towers-demolished-but-have-things-changed-under-the-new-regime-9101321.html

Homebuyers write to Mamata to implement RERA within 30 days

An association representing homebuyers has written to Bengal chief minister Mamata Banerjee urging her to take necessary steps to make real estate law RERAfunctional in the state within one month.

The Forum For People’s Collective Efforts (FPCE), an umbrella body of homebuyers, has expressed concern over real estate law RERA still being non-functional in Bengal, leaving buyers at the mercy of the builders.

FPCE president Abhay Upadhyay, who is also a member of central advisory committee, RERA, wrote a letter on August 16 to the chief minister over the long wait for the implementation of The Real Estate (Regulation and Development) Act, 2016 (RERA) in Bengal.

In May last year, the Supreme Court had struck down the Bengal government’s law WBHIRA for regulating the real estate sector, saying it was “unconstitutional”. Upadhyay’s letter was also marked to Supreme Court justice D.Y. Chandrachud, who had passed the judgment, and union housing and urban affairs minister Hardeep SinghPuri.

After the top court setback, the Bengal housing department on July 26, 2021, notified the rules laying down the legal framework for setting up the Real Estate Regulatory Authority.

However, it is yet to become functional for the want of a chairman and members. Moreover, the formation of the Appellate Tribunal; creation of web pages; and setting up of other infrastructure needed for the early enforcement of RERA has also not been done yet. “I am confident that once the matter is brought to the notice of the chief minister, things will fall in place. The state has done everything to comply with the SC directive. Only the operationalisation of the Authority and Appellate are pending,” Upadhyay said this morning. According to RERA rules, the chairperson and other members of the Authority shall be appointed by the appropriate (state) government.

Source: https://www.telegraphindia.com/business/homebuyers-write-to-mamata-banerjee-to-implement-real-estate-law-rera-in-bengal/cid/1881590

MahaRERA order to allow developers to cut over 2% amount from buyers in booking cancellation

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has issued a revised order that will pave the way for developers to increase the deduction amount in case of a booking cancellation, which was earlier capped at 2 percent.

In July, MahaRERA had issued an order prescribing the number of days and amount that can be deducted in case of cancellation of a booking. According to this, no amount could be deducted for cancellation within 15 days of booking, 1 percent of the cost of the said unit between 16 days to 30 days, 1.5 percent between 31 days to 60 days and 2 percent for cancellation over 61 days.

In this context, the MahaRERA in the July order had stated, “The Table in Clause 9 of the allotment letter prescribes the minimum period (number of days) within which the booking can be cancelled and the upper limit of the percentage of the amount to be deducted in case the allottee desires to cancel the booking.”

The order added, “The promoter may if the promoter so chooses, 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, in the allotment letter prescribed.”

However, in a revised order dated August 12, 2022, in relation to model allotment letter and model agreement for sale, the MahaRERA has not mentioned about developers being able to increase the number of days or decrease deduction amount, in case of cancellation of booking.

Additionally, the MahaRERA has said that if the developers want to add any points in case of deviations it should highlight the same with different colour.

In this context, the MahaRERA order states, “If promoters choose to execute with an allottee an allotment letter that is not in accordance with the proforma of the allotment letter as approved by the Authority in its meeting held on 24.06.2022, than the deviations/modifications in the proforma of the allotment letter as proposed by promoters shall be highlighted in different colour.”

The same has to be uploaded by the developer along with a deviation sheet mentioning/indicating therein the deviations/modifications while seeking registration of the real estate project so as to enable the allottees to make an informed decision, said MahaRERA in its order.

Explaining the significance, Chartered Accountant Aditya Zantye who practices with MahaRERA, said, “The MahaRERA’s revised order of August 12, 2022 has basically in a way paved the way for developers considering differing circumstances of different properties offered for sale to deduct more than 2 percent in case of cancellation of booking by highlighting the deviation or change in different colour.”

Zantye added, “A similar order issued in July 2022, allowed developers to decrease the deduction amount, however, the revised order now does not speak about decreasing and nor bars any increase. So, by this developers can charge more than 2 percent for cancellation by highlighting it in different colour. In a way, it is a good move considering litigation might come down by this. Also, more than 10 percent booking amount is in any way not permitted.”

Further, developers have welcomed the revised order by MahaRERA issued on August 12.

Manju Yagnik, Vice Chairperson, Nahar Group and Sr. Vice President, NAREDCO Maharashtra said, “This is a brilliant move by RERA which would further increase the transparency in the real estate sector while simultaneously empowering the end consumer. The fact that the developers would need RERA’s approval for any changes made to the sale agreement and the allotment letter should provide the consumer’s much-required relief.”

Yagnik added, “This would give the homebuyers maximum possible information on every aspect of the project and would also reduce future litigation processes if any. This standard draft would prevent multiple discrepancies between the developer and the consumers and would further streamline the home buying process.”

Meanwhile, the Maharashtra Real Estate Appellate Tribunal (MREAT) in its recent ruling had said that Real Estate Regulatory (RERA) Act doesn’t allow a property developer to forfeit money from the amount paid by a buyer if they cancel a purchase. It added that the RERA Act is silent on the point of permissible deduction if the buyer unilaterally cancels a booking for whatever reason.

Source: https://www.moneycontrol.com/news/business/real-estate/maharera-order-to-allow-developers-to-cut-over-2-amount-from-buyers-in-booking-cancellation-9046871.html

Cumballa Hill resident gets refund with interest for 8-year delay in project

The MahaRERA appellate tribunal has ordered an Indiabulls subsidiary to refund the entire amount paid by a South Mumbai resident for a flat near Khalapur, along with interest for eight years and costs, for failing to hand over possession long after the agreed deadline.

Pradip Mehta, a resident of tony Cumballa Hill, had booked a flat for Rs1.17 crore in the Indiabulls Savroli 1 project near Khalapur in July 2014. The project was being developed by Sylvanus Properties, a wholly owned subsidiary of Indiabulls.

Mehta said the developer attracted buyers by showing a rosy picture of the project with a twelve-hole golf course and a 50,000 sq ft clubhouse.

He made an initial payment of Rs 17 lakh and said the developer had promised possession by February 2018.

However, when the Real Estate Regulatory Authority (RERA) Act came into force, the developer unilaterally changed the possession date to February 2019 while registering the project with MahaRERA, the regulator for Maharashtra.

The developer missed that deadline, too. According to Mehta, the project remains incomplete.

The developer argued that no agreement for sale had been executed and no possession date agreed to. The company said unilateral exits by buyers from a project would result in huge losses to the developer. It said such unilateral exit when there is no violation of RERA provisions by the developer ought to result in forfeiture of the amount paid under clause 16(c) of the law.

But the tribunal did not find any substance in these arguments and said the buyer was eligible for a full refund with interest from July 2014 till the date of realization of the amount under section 18 of the RERA Act.

Advocate Nilesh Gala, who represented Mehta, described the order as significant since the tribunal had ruled in favour of the buyer despite the developer claiming there was no agreement for sale.

“The significance of the order is that a developer cannot forfeit the payment or deduct money for no fault of the buyer,” Gala said. “While the model allotment letter issued by MahaRERA prescribes some deductions for cancellation of booking, there is no such provision in the act is what the judgment states.”

Moreover, he pointed out, even if there is no explicit agreement on the date of possession, other factors can be considered to ascertain it. The Savroli 1 project has been delayed for a long time and the developer has sought many extensions from MahaRERA.

Mehta had first approached MahaRERA for compensation of Rs5 lakh for the developer’s failure to provide the promised amenities, a refund of the amount he had paid with interest from July 2014, and Rs1 lakh towards litigation costs.

MahaRERA did not offer him any relief and simply directed the developer to execute a sale deed. It also said that if the buyer still wanted to exit the project, the developer could retain a portion of the amount paid. Aggrieved, Mehta moved the tribunal.

Sylvanus argued before the tribunal that the buyer had produced no document indicating a date of possession and the booking was made before the RERA Act came into force.

The company said a buyer has to pay at least 20% of the total sale amount before an agreement can be executed and registered, something Mehta had failed to do despite repeated reminders.

This, it said, violated section 4 of the Maharashtra Ownership of Flats (Regulation of the Promotion, Construction, Sale, Management and Transfer) Act, 1963, and section 13 of the RERA Act.

But the tribunal noted that as per the registration details submitted by the developer, the company had promised to complete the project by 2017, three years after work on it began.

A buyer cannot wait forever for possession of a flat, it said, particularly when the developer had failed to hand it over despite repeated extensions of the deadline.

Source: https://www.freepressjournal.in/mumbai/mumbai-cumballa-hill-resident-gets-refund-with-interest-for-8-year-delay-in-project

Rajasthan-RERA registers 280 new projects in first half of 2022

The Rajasthan Real Estate Regulatory Authority (Raj- RERA) has registered 280 new projects in the first half of 2022 which is 89% increase in new project registration in comparison to 2021 (January to July).

About 58% of these applications belong to state capital Jaipur and remaining belong to other urban areas of the state. In first half of the 2021, total of 148 applications for registration of projects were received. This year, so far, the Raj-RERA has registered 280 projects.

An official said, “Majority of projects registered 82% are residential including plotting. As demand for the independent houses has increased after Covid-19, the industry is witnessing a steady growth.”

Kota, Udaipur, Alwar and Jodhpur are other top cities in new project registration. Apart from these, applications to register projects were received from Sriganganagar, Sikar, Chittorgarh, Ajmer, Barmer and other part of the state.

“Registration of projects from smaller cities indicates upward trend of group housing and rising impact of real estate regulation among promoters,” added official.

As per the rule, the developers under the mandatory provision of RERA Act 2016 have to register ongoing projects, which are being construction on land up to or more than 500 square metres and total number of units are eight or above.

The promoters are required to make an application to the authority for registration. Raj-RERA reviews the projects and issues necessary guidelines to promoters to ensure time- bound construction in the interest of home buyers. Once the approved information is uploaded on the website, it is not possible to change the original plan without prior approval of the RERA.

A RERA official said, “Under RERA Act, it is mandatory for the promoters to register their real estate project to sell, advertise, market, book or purchase. As consumers and builders are aware about the fact, more registrations are happening. Now, buyers refuse to buy projects without RERA registration. In past, the authority also issued notices to the developers who were violating the norms.”

Source: https://timesofindia.indiatimes.com/city/jaipur/raj-rera-registers-280-new-projects-in-first-half-of-2022/articleshow/93260070.cms

In an unprecedented development, the adjudicating authority of RERA detained a builder under civil prison for 15 days for alleged wilful disobedience.

Developer Who Violated Order Held For 15 Days

In an unprecedented development, the adjudicating authority of RERA detained a builder under civil prison for 15 days for alleged wilful disobedience. The man’s health deteriorated from the shock after which he had to be admitted to a private hospital in Gandhinagar. The builder was taken into the custody by RERA officials and kept in the office in Gandhinagar overnight after he was allegedly found guilty of disobedience.

RERA’s adjudicating authority P R Patel took the stringent action after he found irregularity and that the regulator had granted injunction on sale of seven bungalows built under a scheme called Kedarnath Bungalows, developed by Rajesh Motiyani and his partners in the firm Rameshwar Developers. The authority has also issued notices to the three partners Anil Gidhawani, Anil Vidhani and Kamlesh Makhija.
As per the case details, the firm had purchased land from Ozon Developers for a consideration of Rs 9.15 crore by registering a sale deed on October 21, 2015. The applicants, Ashish Tekwani and others, purchased seven bungalows in the scheme in 2016-17 and paid earnest money to the firm. The project application was pending and the scheme also remained uncompleted. The applicants later filed a complaint before RERA in 2019 over the issue.

During the proceedings, Motiyani declared before the authority that he had no objection if the interim or final injunction would be granted against transfer of the bungalows. He had also declared that he was reconstituting the partnership firm and preparing necessary documents for registration before RERA. The three partners remained absent in the proceedings. On September 12, 2019, RERA passed an order in favour of the applicants and directed the builder to complete the remaining work within six months and hand over possession to them. It was also directed not to sell the seven bungalows or transfer the scheme to anybody else without taking consent of the allottees. The order was not challenged in any higher forum and hence it attained finality.

When the builder didn’t comply with the order issued by RERA and didn’t give the possession, the complainant filed Execution Proceedings under section 40 of Gujarat RERA Act on March 17, 2021. During the hearing, the builder assured that construction would be completed and the approval of the project would be taken from RERA.

Later, the builder sold the land with all 12 bungalows to one Arjun Khilwani for a consideration of Rs 3.74 crore through a registered sale deed at Naroda sub-registrar office without obtaining prior approval from RERA. The sub-registrar registered the property though the order issued by RERA on September 12, 2019 was conveyed to his office. The authority sought explanation, but he couldn’t give any and he was taken into civil custody for 15 days for wilful disobedience on Monday.

Meanwhile, the court issued show cause notice to the sub-registrar of Naroda ward, Praful Modi, for registering the property despite an injunction granted by RERA over selling or transferring bungalows booked by a complainant. As per RERA law experts, this is the first time such a situation has arisen.

Source: https://www.ahmedabadmirror.com/rera-adjudicator-cracks-the-whip/81840478.html

RERA, Gurugram, has directed the builders to refund homebuyers money in 90 days along with 9.70 % interest following their failure to give possession of apartments and plots in a stipulated time period.

RERA orders 23 builders to refund money to 63 buyers

The Real Estate Regulatory Authority (RERA), Gurugram, has directed the builders to refund homebuyers money in 90 days along with 9.70 % interest following their failure to give possession of apartments and plots in a stipulated time period.

The RERA orders have come in the wake of multiple complaints from the Gurugram-based homebuyers who after losing their hopes to have their units had petitioned RERA seeking a refund of the amount they had paid to builders.

“The authority has ordered to refund deposited amounts to homebuyers after hearing both the parties (builders and allottee) and on finding builders guilty for non-delivery of units as per builder buyer agreements. The builders should not take homebuyers for granted,” KK Khandelwal, RERA chairman, said in a release.

“The builders failed to complete the projects and deliver the promised units to homebuyers within stipulated time even after collecting good initial amounts,” said Khandelwal.

He said in July alone nearly 300 matters were listed before the authority for adjudication. In the 63 cases, the authority adjudicated the matter allowing a refund with interest at the rate of 9.70%. These adjudications pertain to 17 builders and the refund amount is close to ₹50 crore.

The authority has said in case the builders don’t follow the order, the complainant can approach the adjudicating authority for execution of orders.

In another 15 matters, the authority has ordered a refund after a deduction of 10% earnest money. In all 300 matters, the homebuyers largely wanted a refund and that shows the callous attitude of promoters, the authority has observed.

Khandelwal said the authority gets hundreds of complaints on a daily basis in which mostly buyers want a refund or delayed interest.

Source: https://www.hindustantimes.com/cities/chandigarh-news/rera-orders-23-builders-to-refund-money-to-63-buyers-101658442377351.html

State government seeks Odisha RERA help to bring changes to real estate rules

The State government has sought recommendations from the Odisha Real Estate Regulatory Authority (ORERA) to bring necessary modifications to the agreement for sale provision under Odisha Real Estate (Regulation and Development) Rules-2017 in conformity with the RERA Act and its rules.

The government move comes following the order of the Orissa High Court in this regard on June 22. As per the HC order, the State government will also re-examine and bring necessary changes to the format of the ‘agreement of sale’ in the rules in line with the RERA act.

Accordingly, the Housing and Urban Development department has sought recommendations from ORERA in this regard. Sources said necessary amendments are required to remove the difficulties in the existing ‘agreement to sell’ provision prescribed in the ORE (R&D) Rules 2017 which has led to non-registration of the sale agreement by the Inspector General of Registration (IGR).

RERA activists said no clause in the agreement to sale should allow any part of the ‘common area’ to be with builder or even booked or sold to individual buyer as the entire land as well as common area of a project is required to be registered in the name of the ‘Association of Allottees’ formed under the Act.

The agreement to sell also must clearly mention the ‘saleability of Covered Parking’, a tabular format for price breakup, cost of the land, share of land and common areas as well as transaction relating to carpet area.

Source: https://www.newindianexpress.com/states/odisha/2022/jul/13/state-government-seeks-odisha-rera-help-to-bring-changes-to-real-estate-rules-2476037.html