Builders’ current process of maintaining a collection account is wrong: UP-RERA

New Delhi

The current process of maintaining a collection account by builders to get all deposits before transferring the mandatory 70 percent of the money into escrow account is wrong, said the Uttar Pradesh Real Estate Regulatory Authority.

The realtors then transfer the remaining 30 percent of the money to third account operated by them for appropriating for purposes other than construction and land cost.

According to the authority, “This practice is apparently wrong. The promoters have to receive all the amount in the Escrow Account and only the money left after utilising 70 percent of the money for construction and land cost should be allowed to be withdrawn for a purpose other than construction and land cost. It is re-emphasized that this 70:30 percent ratio has to be maintained from the inception of the project.”

The above observation was made in a meeting held by UP-RERA officials with chief general managers and general mangers of all the public and private banks. The authority has issued appropriate directions to all the zonal heads and branch managers to comply with the RERA orders.

UP-RERA has also decided to verify all the projects accounts maintained with different banks. “The Chartered Accountants of RERA will be visiting the concerned branches in this regard,” said Rajive Kumar, chairman, UP-RERA.

The authority further said that there cannot be any charge or lien on the separate project account, the bank cannot recover the amount or installment due from the promoter from this account. The bank can have lien on the account to which the promoter transfers 30 percent of the collected money.

“The bank can not insist that in case of loan for the project the promoter should open an account with it and receive all the money from the allottees in this account. Nor can be the bank insist on the promoter to transfer the balance money from the existing project account to new account,” said Abrar Ahmed, secretary, UP-RERA.

As per the provisions of section-4 (2) (l) (D) of Real Estate (Regulation and Development) Act 2016, seventy percent of the amount for a real estate project must be deposited in a separate account to be maintained in a bank to cover the cost of construction and the land cost.

The concerned branch is required to ensure that money is utilized for the specified purpose only and not for any other purposes. The bank must also ensure that the promoter is permitted to withdraw any amount from this account only after he has submitted the certificate from an engineer, an architect and a charted accountant.

Source: www.realty.economictimes.indiatimes.com/news/regulatory/builders-current-process-of-maintaining-a-collection-account-is-wrong-up-rera/70558486

UP-RERA to propose stress fund to complete pending realty projects

Noida

In the first step towards providing some relief to homebuyers, the Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) is set to propose the creation of a stress fund to complete pending real estate projects.

After tabling the proposal at its board meeting in Lucknow, the regulator will open it for suggestions and discussion, after which it is likely to send it to the UP government.

Homebuyers who invested in several projects have been demanding a stress fund to help cash-strapped builders with initial liquidity.

However, their demand has so far not received any response from the state or central government.

UP-Rera members told TOI that given the abysmal financial state of some of the projects in Noida and Greater Noida, it could be difficult for any agency to come on board to help complete construction without financial backing from the government.

“We have created a proposal. However, it will be weighed unanimously by the entire board in Lucknow. While the law takes its course to deal with the injustice by the builders towards the buyers, we, as a real estate regulator, will take a balanced and poised stance. Our objective is to help buyers get their flats. Wherever we can, we will mediate to help completion,” UP-Rera member Balwinder Kumar told TOI.

“Given the huge count of flats that are pending here where builders are in a financial mess, we now want to see if a financial package for completing these flats can be created,” he added. Kumar, however, did not divulge the fine print of the proposal.

Homebuyers cannot start making payments and banks do not offer loans in projects which are in a stalled condition, some have argued.

“The builders have to show at least some sign of construction before buyers can start paying their pending dues on projects, which have come to an absolute standstill. Whichever agency comes forth for the task of completion would need seeding liquidity which the government ought to provide through a stress fund,” Abhishek Kumar, president of the Noida Extension Flat Owners Welfare Association (Nefowa) and also a member of the UP-Rera Conciliatory Committee, said.

In June, the Forum For People’s Collective Efforts, an apex body of homebuyers, had urged the state government to set up a Rs 10,000-crore stress fund for completing pending projects in the next five years. The forum had suggested that the government should strip off personal and company assets of promoters of delayed projects to recover the amount spent for completing the works using this fund.

Source: www.realty.economictimes.indiatimes.com/news/industry/up-rera-to-propose-stress-fund-to-complete-pending-realty-projects/70426054

 

 

Centre plans to set up common online platform for RERA of all states, UTs

NEW DELHI

The Centre has planned to set up a common online platform for the Real Estate Regulatory Authority (RERA) of all states and UTs, a move which will provide an opportunity to home-buyers, builders and authorities to exchange views. Announcing the government’s plan here, Housing and Urban Affairs Secretary Durga Shanker Mishra said that with this platform, the real estate law will become “more strong”.

Under the Real Estate (Regulation and Development) Act, 2016, all states are mandated to constitute their respective real estate regulator RERA which provides proper protection to home buyers.

“We are working to introduce a common platform where RERA of all states and Union Territories (UTs) can exchange their views. With this, RERA will be more strong,” he said.

According to the ministry, as per the norms of Pradhan Mantri Awas Yojana (Urban), home-buyers will not be able to avail Credit Linked Subsidy Scheme (CLSS) under the mission if real estate project is not registered under RERA.

Under PMAY (U), home-buyers can avail an interest subsidy of upto 2.67 lakh.

Later, Mishra told reporters that on the online platform, any state RERA can study an order of other states in a particular matter. Also, home-buyers and builders can give their views on this issue.

Giving details about real estate projects on the fourth anniversary of PMAY (U), AMRUT and Smart Cities Mission, the secretary said that till now, over 42,000 projects have been registered under RERA while more than 32,000 real estate agents have been registered.

On his part, Housing and Urban Affairs Minister Hardeep Singh Puri said that wherever the central real estate law has been implemented, it has made a “very big difference”.

RERA is a real estate regulator and it gives an opportunity to home-buyers to register their complaint against builders, Puri also said.

Mishra said that 30 states and UTs have notified RERA, but West Bengal has notified its own real estate regulator – Housing and Industrial Regulation Act, 2017 (HIRA).

In July last year, the ministry had sought the opinion of the Law Ministry over West Bengal notifying its own real estate law instead of implementing the Real Estate (Regulation and Development) Act enacted by Parliament.

Source: https://realty.economictimes.indiatimes.com/news/regulatory/centre-plans-to-set-up-common-online-platform-for-rera-of-all-states-uts/69946101

Builders must provide financial plans of projects to Tamil Nadu RERA

CHENNAI

Builders of large housing projects in the state will soon have to convince the Tamil Nadu Real Estate Regulatory Authority (TNRERA) that they have the money to complete them and not leave home-buyers in the lurch midway.

“The basic idea is they should have a financial plan for completing the housing project,” TNRERA chairman K Gnanadesikan told TOI. The real estate regulator has already asked a couple of developers in the city to furnish these details before registering the projects. Developers of projects with 100 units and more must compulsorily present their financial contingency plan to TNRERA.

The TNRERA move comes against the background of several housing projects across the country being abandoned midway due to lack of funds with developers, leaving homebuyers in the lurch. According to the Tamil Nadu Real Estate (Regulation and Development) Rules, 2017, all ongoing housing projects above eight units or more than 5000 square feet should be registered with the TNRERA. The Real Estate (Regulation and Development) Act, 2016, states that 70 per cent of the amount realised from buyers must be deposited in a separate escrow account, which would be released by the banks after completion of each stage of the construction.

TNRERA sources said that some projects come to a standstill at different stages largely due to insufficient funds. This leaves customers in trouble. The financial contingency plans will help to protect buyers’ interests as they will have roadmaps to raise funds through tie-ups with financial institutions.

According to data with ANAROCK property consultants, 8,650 apartment units worth Rs. 5,620 crore launched before 2013 are yet to be handed over to buyers in Chennai.

The Confederation of Real Estate Developers’ Association of India (CREDAI) has welcomed the move. Its Chennai chapter president W S Habib said, “After the implementation of the real estate Act, fly-by-night developers have almost disappeared. The new development will be an extra cover for protecting homebuyers investments,” he added.

Source:https://realty.economictimes.indiatimes.com/news/industry/builders-must-provide-financial-plans-of-projects-to-tamil-nadu-rera/70081576

Rajasthan RERA serves notices to nine developers for violations

JAIPUR

After nearly one-and-a-half year, the Real Estate Regulatory Authority (RERA), Rajasthan, on Wednesday once again swung into action and issued notices to nine developers who were allegedly violating the norms.

The authority cancelled the registration of one project, while it issued show-cause notices to developers for advertising their projects without getting registered under the RERA (Rajasthan).

An official source said, “One developer who had proposed a project in Pratap Nagar near NRI colony has allegedly claimed that the land belongs to him. For the same, an affidavit was submitted, while registering the project at RERA. However, a complaint was received against the developer and during examination, it was proved that the land doesn’t belong to him and RERA cancelled the registration.”

To others notices were issued also under Section 35(1) of the RERA Act 2016 to builders for advertisement of project without prior registration. The authority has also directed these developers to stop such illegal actions immediately and explain in writing within seven days. “The developers violated the law as the advertisement, market, book, sale or offer for sale or invite person to purchase in any manner, any plot, apartment or building in the real estate project prior to registration of the sale under the said Act is prohibited,” said the source.

The authorities would impose penalty if these developers are found guilty. “In case the explanation is not submitted within given time, the authorities may take action,” said a source.

Source:https://realty.economictimes.indiatimes.com/news/regulatory/rajasthan-rera-serves-notices-to-nine-developers-for-violations/70068423

Appellate tribunal to be functional soon: Bihar RERA Chairman

PATNA

The appellate tribunal of Real Estate Regulatory Authority (RERA) in state will officially start functioning within the next 15-20 days, RERA (Bihar) chairman Afzal Amanullah said on Tuesday.

Amanullah said the appellate tribunal is headed by Justice (retd) Arun Kumar with two more members. He said the real estate buyers or builders unsatisfied with the RERA judgement can appeal to the tribunal.

Amanullah said all the ongoing registered projects will have to complete their construction work by December 2020. “Of total 654 registered real estate projects, 50% are new,” he said.

“Besides, the accounts and finance team of RERA will now keep a tab on the accounts of builders to ensure that all the money invested by the consumers is being used for that project only. About 70% of the amount realized from the consumers shall be deposited in a separate bank account to be solely used for the particular project,” he said and added: “Builders failing to follow the norms will be penalized.”

Highlighting the achievements of RERA, its member Rajiva Bhushan Sinha said when it came into existence in Bihar in April 2018, only a handful of projects were registered. “Now more than 1,100 builders have applied for registration. Total 438 complaints have been received in the last one year and 322 of them are in the hearing stages while judgement has been delivered in 70 cases,” he said.

RERA member Subodh Kumar Sinha said, “We are not only helping the buyers, but also the builders in getting loan from the banks and meeting other construction-related requirements.”

Source: https://realty.economictimes.indiatimes.com/news/regulatory/appellate-tribunal-to-be-functional-soon-bihar-rera-chairman/70155355

Lt Governor launches Delhi RERA portal

NEW DELHI

Lt Governor Anil Baijal Monday lunched the official portal of RERA Delhi and saying it will promote transparency and accountability in the real estate sector. The Government of India has implemented the Real Estate (Regulation and Development) Act 2016, RERA, to check malpractices in the sector. The Act came into force on May 1, 2017.

“Launched official portal of RERA, Delhi (www.rera.delhi.gov.in). The website will help promote transparency & accountability in real estate sector. Advised to provide an interactive forum for knowledge sharing with other RERAs… I congratulate the RERA team for the initiative,” the L-G tweeted after the launch.

The RERA Act aims to reform the real estate sector in the country, encouraging greater transparency, citizen centricity, accountability and financial discipline.

Source: www.realty.economictimes.indiatimes.com/news/industry/lt-governor-launches-delhi-rera-portal/69966899

Minimum registration fees down by MahaRERA, rural areas to benefit

Pune

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has reduced the minimum registration fees from Rs 50,000 to Rs 10,000 for projects that will enable smaller units, especially in the rural areas, to come under its purview.

The change has been effected in accordance with the amended rules issued by the Maharashtra Housing Department on June 6, MahaRERA officials said.

With the prescribed rate of Rs10 per square metre and the minimum area of plot under RERA being 500 square metre, the minimum charge reduction would ensure that developers with smaller projects are encouraged to register with MahaRERA and no longer pay a blanket charge of Rs50,000, the officials said.

“Many cities, other than the metropolitans, have several small projects that may be spread over a little more than 1,000 sq metre or 1,200 sq metre. If these developers had to register their projects, they would have to pay Rs50,000 irrespective of the area. But the reduced minimum charges would encourage such developers to come forward and register their projects,” a senior MahaRERA official said.

MahaRERA completed two years of its implementation in May this year. The officials said over 21,000 projects have been registered in the state, the maximum in the country. Following this, the authorities have taken initiative to ensure more registrations and have more developers under MahaRERA’s purview.

“In the first and second year of the implementation of the rules, it was noticed that most of the registrations came from the Mumbai Metropolitan Region (MMR) and from cities such as Pune and Nagpur. Not many registrations came from the rural areas of the state. This year, our main focus is to penetrate into these areas,” the MahaRERA official said, as he elaborated the need for the amendments.

The changed rules have also reduced the fees for plotted developments, a move that will bring more projects from the rural areas under MahaRERA. In case of plotted development, the promoters have to pay an extended fee calculated on the area of the land proposed to be developed at the rate of Rs5 per sq meter.

Consumer forums, which have been urging MahaRERA to go ahead with these amendments, said the recent changes in the rules regarding registration of projects were done keeping in mind the ground realities. “Till the other day, the rules had not defined plotted development though RERA also covered plotted developments. Through this amendment, the definition of the plotted development has been added to the MahaRERA rules,” Mumbai Grahak Panchayat president Shirish Deshpande said. He added that bringing down the rate for plotted development from Rs10 to Rs5 per sq metre was “realistic”.

Besides, the conveyance to be done by the promoter is within three months since the arrival of the occupation certificate. The amended rules do not give the developers any options for delay.

“The earlier rule stated that the promoters have to give conveyance once 50% of the homebuyers paid full consideration or within one month from the formation of the society or within three months from the date of occupancy certificate, whichever earlier. This was impractical. The MGP had taken this up with the authorities while framing the original rules. But it was not considered then. However, the amended rules state that the conveyance has to be done within three months from the date of occupation certificate. It makes sense,” Deshpande said.

Confederation of Real Estate Developers Association of India, vice-president Shantilal Kataria said the reduction of minimum fees for registration will benefit the tier two, three and four cities and encourage more developers to register with MahaRERA. He, however, said the conveyance period of three months should have been six months.

Source: www.realty.economictimes.indiatimes.com/news/regulatory/minimum-registration-fees-down-by-maharera-rural-areas-to-benefit/69765872

UP-RERA spots 57 rogue residential projects on outskirts of Lucknow

Lucknow

Take all reasonable precautions before buying your dream house or apartment on the outskirts of Lucknow.

The UP Real Estate RegulatoryAuthority (UPRERA) has identified 57 apartments and housing colonies that have been developed without requisite permission from local authorities and any investment in these projects is not safe, officials have warned.

Satellite images taken by the Remote Sensing Centre (RSC), which on the request of UPRERA is carrying out a survey, have helped identify these rogue projects. So far, the centre has completed 70% survey and identified the 57 along Faizabad, Sultanpur and Sitapur roads. Survey in remaining areas will be completed by the end of June.

The inspection was commissioned in March after two allottees of a housing project lodged a complaint regarding the registration money taken by a builder on Sitapur road. According to Section 13 of the RERA Act, a buyer has to pay 10% of the apartment/house value as registration money. The complainant claimed that the builder was charging 15% instead.

Chairman of UPRERA Rajive Shukla said they later came to know of more than 150 cases in which builders had asked for more registration money. “We also received complaints about builders disappearing after taking the allotment money. That is when we decided to conduct the survey,” he added.

Sources in UPRERA said developers of the 57 rogue projects would be served notices, asking them to seek registration from local authorities such as LDA or zila panchayat, and fullfill all fire safety norms. They will also be directed to return extra money if registration fee charged was more than the prescribed 10% of the apartment value.

Source: www.realty.economictimes.indiatimes.com/news/regulatory/up-rera-spots-57-rogue-residential-projects-on-outskirts-of-lucknow/69765435

UP-RERA to issue show-cause notice to builders with stuck projects

New Delhi

Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has decided that if there is no progress in completion of the residential projects, the authority will issue show cause notice to deregister their projects.

It further said that the notice will also be issued if the builder fails to deliver projects, fails to show his keenness to deliver flats, if the builder does not resume construction and is absconding or in jail.

The authority in the last few days has issued deregistration notices under Section 7 of the RERA Act to seven builders for failing to meet their commitments to buyers covering 14 projects and approx. 4800 residential units.

Their matter is still under active consideration at various stages.

UP-RERA has also sent notices to many developers over bad construction quality and project delays.

Under RERA Act 2016, Section 8 provides an indication that the Authority can provide a platform to take up stressed projects and bring them to completion.

Source: www.realty.economictimes.indiatimes.com/news/regulatory/up-rera-to-issue-show-cause-notice-to-builders-with-stuck-projects/69485164