Reality of RERA - Difficult to uncork!

INTRODUCTION 

Parliament has enacted Real Estate (Regulation and Development) Act, 2016 (RERA) which has come into effect from 01.05.2017. The objects of RERA on paper are laudable. If enacted in its intent and spirit, it can be a boon for the consumer, who has been so far exploited by the unscrupulous builders and developers. The moot question is “if enacted in its intent and spirit”. The all powerful developers’ lobby has already prevailed upon several States. The result is that most of the States, empowered to frame Rules and Regulations for implementation of RERA have diluted the main teething effects to protect the consumer.

To develop, regulate and promote the real estate sector in an efficient and transparent manner, to protect the interest of consumers in real estate sector and draw a balance between the interest of the consumers and the developers, RERA has all such ingredients and objects. The real estate agents, involved in a real estate project are also for the first time a part of this statutory legislation.

Each State shall enact its own Rules and Regulations for effective implementation of RERA. In Maharashtra, real estate is now regulated by RERA, read with the Maharashtra Real Estate (Regulation & Development) (Regulation of real estate projects), (Registration of real estate agents, rates of interest and disclosures on website) Rules, 2017 (Rules, 2017), Maharashtra Real Estate (Regulation & Development) (Recovery of Interest, Penalty, Compensation, Fine payable, Forms of Complaints and Appeal, etc.) Rules, 2017 (Mah. Recovery/Appeal Rules) and Maharashtra Real Estate Regulatory Authority (General) Regulations, 2017 (Regs.). The wisdom of State Legislature in enacting two sets of Rules is indeed a mystery! The entire set of two Rules could have been condensed in one set of Rules and titled Maharashtra Real Estate (Regulation & Development) Rules, 2017.Besides, the Act, Rules and Regulations as enacted are not user friendly. Even with the search light, it is difficult for a promoter/allottee to trace the required hidden provisions. RERA therefore with its Rules and Regulations has been uncorked hereunder.

Repeal of the Maharashtra Housing (Regulation & Development) Act, 2012 [MH (R&D) Act] and Maharashtra Ownership Flats Act, 1963 (MOFA):

The MH (R&D) Act is repealed [Sec.92] w.e.f. 01.05.2016. Sec.56 of the MH (R&D) Act had repealed MOFA w.e.f. 08.07.2014. By virtue of Sec.6 of the General Clauses Act, 1897, with the repeal of MH (R&D) Act, MOFA stands repealed. But, in view of savings clause under Sec.56 of MH (R&D) Act, all matters and acts done under MOFA continued to be regulated by the provisions of MOFA.However, with the enactment of RERA as the Central Act, henceforth all matters under MOFA will be treated under RERA as under Article 254 of the Constitution of India, the Central Act will prevail and will have supremacy on the State Act. Section 89 of RERA provides that provisions of RERA shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Thus, RERA will prevail.

Under Sec.88 and Rule 23, RERA shall be in addition to and not in derogation of provisions of any other law for the time being in force and Rule and Regulations made thereunder. It is therefore a complementary legislation.

Jurisdiction of Civil Court ousted:

No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Authority or the Adjudicating Officer or Appellate Tribunal is empowered to determine under the Act. No injunction shall be granted by any of the court [Sec.79].

Cognizance of offence:

No court shall take cognizance of any offence punishable under the Act except on a complaint in writing made by the Authority. No court inferior to that of Metropolitan Magistrate or a Judicial Magistrate of the First Class shall try any offence punishable under RERA [Sec.80].

REGISTRATION OF REAL ESTATE PROJECTS

New Projects:

In planning area: Every promoter before advertising, marketing, booking, selling or offering for sale or inviting persons to purchase in any manner any plot, apartment or building in the real estate project, or part of it, in any planning area, whether commercial or residential, shall register the project with the Real Estate Regulatory Authority under RERA [Secs.2(e), 2(f) & 3(1)].

Beyond the planning area: For the projects which are developed beyond the planning area but with the requisite permission of the local authority, the authority may by order, direct the promoter of such a project to register the same with the authority [Second proviso to Sec.3(1)].

Planning area: Any area designated for future planned development under Town and Country Planning. It means planning area, development area or a local planning area or a regional development plan area [Sec.2(zh)].

Projects in phases: Phase of the project means the building or buildings in a project in respect of which occupancy or completion certificate has not been received [Expln.I to Rule 4(1)]. Phase may consist of a building or a wing of the building in case of building with multiple wings or defined number of floors in a multi-storied building/wing [Rule 2(1)(p)]. Where the real estate project is being developed in phases, the promoter shall obtain registration for each phase separately [Expln. to Sec.3(2)(c)].

Exempted categories: The exempted categories are:

(i) where area of land proposed to be developed does not exceed 500 sq. mtrs. [Sec.3(2)(a)];

(ii) where number of apartments proposed to be developed does not exceed 8, inclusive of all phases [Sec.3(2)(a)];

(iii) where the promoter has received the completion certificate for a project before 01.05.2017 [Sec.3(2)(b)];

(iv) where the purpose is renovations or repairs or redevelopment which does not involve marketing, advertising, selling or new allotment of any apartment, plot or building under the project [Sec.3(2)(c) & Expln.(i) to Rule 3(6)].“Redevelopment scheme” means a scheme interalia providing for allotment of apartments in respect of rehabilitation or redevelopment of slum areas, old or dilapidated buildings (whether cessed or not), or cluster of buildings as may be approved by relevant competent authority [Rule 2(1)(q)];

(v) where only structural repairs of existing building are being undertaken by or through any Public Authority or as per requirement under any law, rules or regulations of the State Government or directions of any Competent Authority [Expln. (ii) to Rule 3(6)].

Application for registration of projects:

Every promoter shall make an application to the authority for registration of the real estate project in Form ‘A’ in triplicate or by submission of web-based application for registration of projects [Sec.4(1)(3) & Rule 3(3)]. On submission of the web-based application, no application shall be required to be made in Form ‘A’ [Rule 3(4)].

Documents and Disclosures: The promoter shall enclose the documents as set out in Sec.4(2) and furnish the information and further documents as required under Rule 3(2) and Rule 3(8). The promoter shall additionally disclose/upload the annual report on the statement of accounts in Form-5 to the Regulations duly certified and signed by Chartered Accountant, who is the statutory auditor of the promoter’s enterprise, who shall certify the particulars as set out in Expln.1 to Reg.4. In the event of false or incorrect information in Form-5, in addition to penal actions, the authority shall take up the matter with regulatory body of professionals for dis-memberment. The required declaration shall be in Form ‘B’ [Rule 3(6)] supported by an affidavit signed by promoter with particulars as set out in Sec.4(2)(l) (A) to (F).

All disclosures shall be made available on the website of the authority except for details as provided under Sec.4(2)(b),(e),(g),(h),(i) and (l) and details as provided under Rule 3(2) [Rule 20(1)]. The exceptions shall not apply to promoters who has in accordance with Sec.11(1) entered all details of the proposed project as provided under Sec.4(2) and Rule 3(2) in all the fields for public viewing in the webpage created on the website of the authority. Such information shall be updated at the interval of every quarter [Rule 20(2)]. The Authority shall ensure adequate measure to ensure cyber security of its website back-up and observe provisions of the Information Technology Act, 2002 and Right to Information Act, 2005 [Rule 22]. The owner/director will be responsible for the information uploaded on RERA website. RERA website is https://maharera.mahaonline.gov.in. Developer will have to be careful while uploading the data as it cannot be changed easily.

Fees: The promoter shall pay a registration fee calculated on the area of the land proposed to be developed at the rate of Rs.10 per sq. mtr. subject to a minimum of Rs.50,000 and a maximum of Rs.10 lakhs. The fees shall be paid through NEFT or RTGS system or any other digital transaction mode [Rule 3(5)].

Withdrawal of application: The promoter may apply for withdrawal of application before expiry of 30 days period of its submission to authority. In such a case, the administrative charges of Rs.5,000 shall be retained by the authority and the remaining amount of registration fees shall be refunded to the promoter within 15 days through RTGS or NEFT system or any other digital transaction mode [Rule 3(7) & Reg.47].

Ongoing projects:

The Act also applies to the projects that are ongoing as on 01.05.2017 and for which the occupancy or completion certificate has not been issued. Such a promoter shall also get such a project registered within a period of three months from 01.05.2017 [First proviso to Sec.3(1)] and shall submit application for registration of each such phase of the project [Rule 4(1)] with disclosures as required under Rule 4(2) and Rule 4(3).The promoter shall construct and develop the project in accordance with the sanctioned plans, layout plans and specifications as approved by the competent authorities [Sec.14(1) & Rule 4(4)]. At the end of 90 days, the promoter shall not advertise, market, book, sale or offer for sale or invite persons in any manner, any plot, apartment or building unless he registers such independent phase as a separate real estate project [Second proviso to Rule 4(4)]. During the three months’ period, the developer can continue to sell the flats in ongoing projects, but after the period is over, the developer cannot sell the flats in ongoing projects unless the project is registered under RERA [First proviso to Sec.3(1)].

Registration:  The registration shall be granted in Form-C within a period of 30 days with registration number, including a Login Id and password for accessing the website of the authority and to create his web page and to fill therein the details of the proposed project. If the application does not conform to the provisions of RERA or the Rules or Regulations thereto, the registration may be rejected in Form-D for reasons to be recorded in writing [Sec.5, Rule 6(a)(b) & Rule 8(1)].

Extension of registration: The registration granted may be extended by the authority in Form-F on the application of the promoter made in Form-E with an explanatory note setting out the grounds and reasons for delay in completion of the project with a fee calculated at Rs.10/- per sq. mtr., on the area of land proposed to be developed, subject to minimum of Rs.50,000 and a maximum of Rs.10 lakhs [Sec.6 & Rule 7].

In case of delay due to force majeure, the authority may at its discretion waive the fee for such extension. The authority may extend the registration for such time as it considers necessary, which shall in aggregate, not exceed a period of one year.

Revocation of extension: The authority may revoke the registration on breaches committed under clauses (a) to (d) of Sec.7(1), or on receipt of a complaint or suo-moto or on the recommendation of the competent authority. Revocation of extension of registration shall be in Form-D after giving the party a reasonable opportunity of being heard. The intimation thereof shall be given to respective competent authority and statutory authorities [Sec.7 & Rule 8].

Effect of revocation: Upon lapse or revocation of the registration, the authority shall:

(a) debar the promoter and specify his name in the list of defaulters on its website;

(b) facilitate the remaining development work to be carried out by competent authority or by the association of allottees or in any other manner, provided that the association of allottees shall have the first right of refusal for carrying out the remaining development works;

(c) direct the bank holding the project bank account, to freeze the account;

(d) issue such directions as deemed necessary [Secs.7(4) & 8].

Deemed registration: If registration is not granted within 30 days, the project shall be deemed to have been registered. The authority shall within a period of seven days of the expiry of the said period of 30 days provide registration number and a Login ID and Password to the promoter for accessing the website of the authority and to create his webpage to fill therein the details of the proposed project [Sec.5(2)].

Validity of registration: The registration shall be valid for a period declared by the promoter for completion of the project/phase thereof [Sec.5(3)].

Penalty: If any promoter does not get his project registered, he shall be liable to a penalty which may extend upto 10% of the estimated cost of the project as determined by the authority and if he continues to violate the provisions of registration, he shall be punishable with imprisonment for a term which may extend upto three years or with fine which may extend upto a further 10% of the estimated cost of the project, or with both [Sec.59].

If any promoter provides false information in the submission of application for registration, he shall be liable to a penalty which may extend to 5% of the estimated cost of the real estate project as determined by the authority [Sec.60].

PROMOTER

Who is a promoter: Promoter is:

(i) a person who constructs an independent building consisting of apartments for the purpose of selling the same;

(ii) a person who develops a land into a project for the purpose of selling;

(iii) any development authority or public body which constructs buildings on its own land for allottees or for disposal by the Government or owns plots placed at the disposal of the Government;

(iv) an Apex State Level Co-operative Finance Society which constructs buildings for its members or for the allottees;

(v) any other person who constructs any building or apartments for sale to the general public or who acts himself as a builder, coloniser, contractor, developer or estate developer or by any other name including power of attorney holder of the owner of the land on which building or apartment is constructed or plot is developed for sale [Sec.2(zk)].

A person who constructs and the person who sells are the different persons but both of them shall be deemed to be promoters and shall be jointly liable [Expln. to Sec.2(zk)].

Restrictions on and functions and duties of a promoter:

(i) General: Promoter shall perform his functions and duties as spread out in several provisions of the Act. His responsibilities start right from registration of the project till handing over of possession and execution of conveyance in favour of the allottees.

(ii) Website: The promoter shall create his webpage on the website of the authority and enter all details as set out in clauses (a) to (f) of Sec.11(1) of the proposed project in all the fees for public viewing [Sec.11(1)].

(iii) Records: He shall prepare and maintain all details as may be specified from time to time by Regulations made by the Authority [Sec.11(6)].

(iv) Till the new project is registered, its units cannot be marketed [Sec.3(1)].

(v) Advance payment and agreement for sale: A promoter shall not accept more than 10% of the cost of the apartment, plot or building as an advance payment or an application fee from a person without first entering into a written agreement for sale with such person and register the same [Sec.13(1)]. The written agreement shall be in the form as at Annexure-A to the Rules. The agreement for sale shall specify the particulars of development of the project including the construction of the building and apartment along with specifications and internal development works and external development works, the dates and manner of payments and the date on which the possession is to be handed over, the rates of interest payable by the promoter to the allottee and by the allottee to the promoter in case of default and all other particulars as provided in the model form of agreement. The promoter may modify the model form of agreement provided such agreement is in conformity with the Act, Rules and Regulations [Sec.13 & Rule 10].

(vi) Deposit of amounts: 70% of the amounts realised by the promoter from the allottees of the real estate project from time to time shall be deposited in a separate account to cover cost of construction and land cost and shall be used only for that purpose. The promoter shall get his accounts audited within six months after the end of every financial year [Sec.4(2)(l) (D)].

(vii) Withdrawal of amounts: The promoter shall withdraw the amounts from the separate account to cover the cost of the project in proportion to the percentage of completion of the project, after it is certified by an Engineer, an Architect and a Chartered Accountant. The promoter shall submit such three certificates to the scheduled bank working out the proportion of the cost as set out in Rule 5(i).

For the ongoing projects, the withdrawals would be as set out in Rule 5(ii) reckoning the cost of completion of percentage of the project and of land cost as set out in Explns.I and II to Rule 5(ii). The cost of construction for purposes of withdrawal shall be worked out as set out in Expln.III to Rule 5(ii) and in case of rehabilitation scheme, the cost shall be as set out in Expln.IV to Rule 5(ii).

(viii) The promoter shall cancel the allotment only in terms of the agreement for sale [Sec.11(5)].

(ix) Advertisements/Prospectus: Promoter shall ensure veracity of the advertisement or prospectus mentioning prominently website address disclosing all details of the project, etc. [Sec.11(2)].

(x) Sanctioned plans and layout: The promoter shall construct and develop real estate projects in accordance with the sanctioned plans and layout plans and specifications as approved by the competent authority. The promoter developing a project will be entitled to aggregate and contiguous land parcel through acquisition of ownership and title or by receiving development permission, including for re-development project. In such a case, the promoter may also obtain phase-wise approvals from the relevant competent authorities. He shall adhere to sanctioned plans and project [Sec.14(1) & Rule 4(4)].

(xi) Change of plans and layouts: Plans and layouts can be changed only with the approval of 2/3rd of the buyers. If the project is delayed or deviates from original plan, buyer can ask for his full money back with interest [Sec.14(2)(i)(ii) & third proviso to Rule 4(4)].

(xii) Rectification of structural and other defects: If a structural defect or any other defect in workmanship, quality or provision of services is brought to the notice of the promoter within a period of 5 years from the date of handing over possession by the allottee, it shall be the duty of the promoter to rectify such defects without further charges within 30 days. In the event, the promoter fails to rectify such defects within 30 days, the aggrieved allottee shall be entitled to receive appropriate compensation [Sec.14(3)].

(xiii) Transfer of rights: Without the 2/3rd written consent of the allottees and the prior written approval of the Authority, the promoter shall not transfer or assign his majority rights and liabilities in respect of the project to a third party [Sec.15].

(xiv)  Insurance: Promoter shall obtain all such insurances as may be notified in respect of title of land and building and construction of the project [Sec.16].

(xv)   Registration of legal entity: Within the specified period, the promoter shall submit the application to the Registrar for the registration of co-operative society or a company or any other legal entity within three months from the date on which 51% of the total number of allottees have booked the apartment [Sec.11(4)(e) & Rule 9(1)].

(xvi)  Execution of conveyance: Promoter shall execute a registered conveyance deed of the apartment, plot or building, within three months from the date the allottees in such plot have paid full consideration to the promoter, in favour of the allottee along with the undivided proportionate title in the common areas to the association of the allottees or competent authority, with the necessary documents and plans. Promoter shall, in case of a single building project, execute a registered conveyance deed within three months from the date of occupancy certificate or 51% of the total number of allottees have paid full consideration to the promoter if no period for conveying the title is agreed upon. In case of a building or a wing of a building in a layout, the conveyance shall be executed within one month from the date on which the co-operative society or company is registered or within three months from the date of issue of occupancy certificate, whichever is earlier, if no period is agreed upon. However, the promoter shall continue to have the rights and entitlement to advertise, market, book, sale or allot to person any unsold apartment or building and development of common areas. If the promoter fails to convey the title, the legal entity shall be entitled to have a unilateral deemed conveyance executed in their favour [Sec.11(4)(f), Sec.17 & Rule 9(2)].

(xvii)  Possession: The promoter shall handover the physical possession to the allottees and the common areas to the association of allottees. In the event, promoter fails to complete or is unable to give possession in accordance with the terms of agreement and if the allottee wishes to withdraw from the project, he shall be liable to return the amount received by him to the allottee including compensation. Such a refund and compensation shall be made by the promoter to the allottee within 30 days from the date on which such amount becomes due and payable to the allotttee as provided in Rule 19. In the event, the allottee does not opt to withdraw from the project, the promoter shall be liable to pay interest for every month of delay till the handing over the possession [Proviso to Sec.18(1)].

(xviii) Compensation: Promoter shall compensate the allottee in case of any loss caused due to defective title of the land within a period of 30 days from date on which such refund along with applicable interest and compensation becomes due and payable to the allottee [Sec.18(2)(3) & Rule 19].

(xix)  Penalty: Promoter is liable to a penalty for non-registration of a project under Sec.3, for providing false information under Sec.4 and for contravening any other provision of the Act, Rules or Regulation under Secs.59, 60 & 61 of the Act and for failure to comply with orders of Authority or Appellate Authority under Secs.62 & 63.

Registration of Real Estate Agent (REA):

A real estate agent is a person who negotiates or acts on behalf of one person in a transaction of transfer of his plot, apartment or building in the real estate project, by way of sale, or transfer to another person and receives remuneration or fees for services rendered as commission or otherwise and includes property dealers, brokers, middlemen by whatever name called [Sec.2(zm)].

Registration and fees: A real estate agent facilitating the sale or purchase of any plot, apartment or building in a registered real estate project, or part of it,which is being sold by the promoter in any planning area, shall get himself registered forthwith and in any case prior to engaging in any activity relating to marketing, advertising, sale or purchase of any plot, apartment or building. The application for registration shall be in Form-G with the documents as set out in Rule 11(2). An individual shall pay a fee of Rs.10,000 and in case applicant, other than an individual, shall pay fee of Rs.1 lakh. The fees shall be paid through NEFT or RTGS system or any other digital transaction mode [Sec.9 and Rule 11(1) to (4)].

Grant of registration: The authority may within 30 days of receipt of application issue registration certificate in Form-H [Rule 12(1)] and provide registration number to the applicant within seven days [Rule 12(3)]. The Authority shall grant a single registration to the real estate agent for the entire State or Union Territory as the case may be or reject the application [Sec.9(3)(a)]. Registration granted shall be valid for a period of five years [Rule 12(4)].

Rejection: Where application does not confirm to the provisions of the Act or the Rules and Regulations made thereto, after hearing the applicant and recording reasons in writing, the authority shall reject the application and inform the applicant in Form-I [Sec.9(3)(b) & Rule 12(2)].

Deemed registration: If the applicant does not receive within 30 days, any communication about the deficiencies in his application or the rejection of his application, he shall be deemed to have been registered and the authority shall issue a registration number to such applicant accordingly. The registration number shall be displayed at principal place of business and branches and be quoted by the real estate agent in every sale facilitated by him and in all documents relating to the project with the number of registration certificate [Sec.9(4) & (5), Rule 14 and Rule 12].

Exempted category: The public authorities established under Special Local Laws which may sell apartments or buildings or plot under any real estate project through public lottery as per the rules and regulations shall not be required to be registered as real estate agent [Expln. to Rule 12(4)].

Renewal: The registration shall be renewable on application of the real estate agentin Form-J with all updated documents as set out in Rule 11(2)(a) to (i) at least 60 days prior to the expiry of the registration, accompanied with the same fees as applicable in case of new registration. The renewal of registration shall be intimated in Form-K and rejection of renewal, after hearing the applicant, shall be intimated in Form-I. The renewal shall be granted provided the real estate agent continues to comply with the provisions of Rules and Regulations made under RERA. The renewal shall also be valid for a period of 5 years from the date of renewal [Sec.9(6) and Rule 13].

Revocation of registration: Where any registered real estate agent commits breach of any conditions specified under the Act or Rules or Regulations thereto, or where the authority is satisfied that such registration has been secured by real estate agent through misrepresentation of fraud, the authority may, either suo-moto or on an application or complaint from the promoter or allottee, revoke the registration or suspend the same for such period as it thinks fit after hearing the real estate agent. The revocation shall be intimated to the concerned real estate agent in Form-I. In case of revocation, no fresh application shall be made again by real estate agent within a period of six months [Sec.9(7) and Rule 15].

The details and information regarding the real estate agents registered or whose application has been rejected or revoked shall be made available on the website of the authority as provided in Rule 21(a) and (b) respectively. Authority shall ensure cyber security of its website, a back-up in digital form and ensure such website and back-up is updated on the last day of every month  and observe provisions of the Information Technology Act, 2002 and Right to Information Act, 2005 [Rules 21 & 22].

Rights, duties and functions of Real Estate Agents:

Every registered real estate agent shall exercise his rights and perform his duties and functions as set out in Sec.10 and Rule 17, namely:

(i) facilitate the sale or purchase of any plot, apartment or building in registered real estate project, provide assistance to enable the allottee and promoter of each real estate project, to exercise their respective rights and fulfill their respective obligations at the time of marketing and selling, purchase and sale of any plot, apartment or building;

(ii) maintain and preserve books of accounts, records and documents separately for each such real estate project in accordance with Income Tax Act, 1961 or Companies Act, 2013 or under any other law and produce them for inspection if so needed for grant or renewal of registration [Rule 11(5) & 16];

(iii) facilitate the possession of all the information and documents as the allottee is entitled to at the time of booking of any plot, apartment or building [Sec.10 & Rules 16 & 17];

(iv) not involve himself in any unfair trade practice or make any false statement or misleading representation and regulate truthfully the publication of any advertisement, etc.

Penalties: Real Estate Agents are subject to penalties in the event of contravening and failing to comply with orders of Authority or Appellate Authority [Secs.62, 65 & 66].

ALLOTTEES

Rights, duties and obligations of allottees:

The rights and duties of allottee are set out in Sec.19.

Rights: Sec.19(1) to (5)

(i) The allottee is entitled to obtain the information relating to sanctioned plans, layout plans, approvals of competent authority, etc.

(ii) The allottee has a right to know stage-wise time schedule of completion of the project and about the amenities and services as agreed.

(iii) The allottee shall be entitled to claim the possession of apartment, plot or building and the association of allottees shall be entitled to claim the possession of the common areas. If the promoter fails to give possession, the allottee shall be entitled to claim the refund of the amount paid along with interest as provided under Rules 18 & 19 and compensation within 30 days from when refund, becomes due and payable.

(iv) The promoter shall handover the necessary documents and plans to the allottee after handing over physical possession [Sec.19(1) to (5)].

Obligations and duties: Sec.19(6) to (11)

(i) The allottee shall be responsible to make necessary payments within the specified time, the share of registration charges, municipal taxes, water and electricity charges, maintenance charges, ground rent and other charges, if any.

(ii) The allottee shall pay interest for delay in payment towards any amount or charges at the same rate as payable by promoter to the allottee under.

(iii) Every allottee shall take physical possession of the apartment, plot or building within a period of two months of the occupation certificate.

(iv) Every allottee shall participate towards the formation of an association or co-operative society and towards registration of the conveyance deed.

(v)  Penalties: For failure to comply with orders of Authority and Appellate Tribunal, allottee shall be liable to penalty as provided in Secs.67 and 68 respectively.

AUTHORITIES

The authorities under RERA are:

A.  Adjudicating Officer:

Adjudicating Officer is appointed under Sec.71 for holding inquiry and adjudging compensation or interest on a complaint, under:

(a) Sec.12 [any person, having made an advance or deposit, suffers any loss or damage by reason of any incorrect, false statement contained in the notice, advertisement or prospectus, or on the basis of any model apartment, plot or building];

(b) Sec.14(3) [where the promoter fails to rectify defects within 30 days of intimation, brought to the notice of the promoter within a period of five years by the allottee from the handing over of possession];

(c) Secs.18 & 19(4) [where promoter fails to complete or is unable to give possession of an apartment, plot or building in accordance with the terms of agreement, for the loss caused to the allottee due to defective title of the land on which project is being developed or developed and such claim of allottee is not barred by limitation; and for the failure of the promoter to discharge any other obligation imposed on him].

Filing of complaint with Adjudicating Officer by any aggrieved person under Sec.31 is in Form ‘B’ and inquiry shall be held by Adjudicating Officer in the manner set out in Rule 7 of Mah. Recovery/Appeal Rules.

Determination of compensation: The Adjudicating Officer shall adjudge the quantum of compensation or interest having due regard to the factors set out in Sec.72.

Determination of interest: The interest shall be the State Bank of India Highest Marginal Cost of Lending Rate plus 2% and if such lending rate is not in use, it would be replaced by such bench mark lending rates which the State Bank of India may fix from time to time for lending to the general public as provided in Rule 18 [Sec.18(1) and Rules 18 & 19].

Enforcement of orders/directions: The Adjudicating Officer shall have power to enforce his orders or directions [Sec.40 & Rules 3 & 4 of Mah. Recovery/Appeal Rules.

Pending complaints: If complaint in respect of any such matter under Secs.12, 14, 18 and 19 is pending before Consumer Disputes Redressal Forum or Commission or National Commission, then with the permission of such Forum or Commission, the person may withdraw the complaint pending before it and file an application before the Adjudicating Officer under RERA [Proviso to Sec.71(1)].

B. Real Estate Regulatory Authority:

(i)  Establishment: Real Estate Regulatory Authority (Regulatory Authority) is appointed under Sec.20. Aggrieved person may file a complaint under Sec.31 in Form ‘A’ and in the manner set out in Rule 6 of Mah. Recovery/Appeal Rules with the Regulatory Authority for contravention of the provisions of RERA, or the Rules and Regulations made thereunder against any promoter, allottee or the real estate agent.

(ii)  Powers: The Regulatory Authority shall on a complaint or suo-moto have power:

(a) to call for information and conduct investigations [Sec.35];
(b) to hold inquiry in the manner set out in Rule 6 of Mah. Recovery/Appeal Rules;
(c) to issue such directions, orders, interim and ad-interim orders as the authority may consider appropriate at any stage of any proceedings [Secs.36, 37, Regs.27, 28, 32, 33 & 34];
(d) to impose penalty or interest upon the promoters, the allottees and the real estate agents [Secs.38, 59 to 63, 65 & 67];
(e) to rectify its orders within a period of two years from the date of the order [Sec.39];
(f) to enforce its orders or directions and for recovery of interest or penalty or compensation [Sec.40, Rules 3 & 4 of Mah. Recovery/Appeal Rules and Regs.38 to 41];
(g) to take up matter with the concerned regulatory body of the professionals of project engineers, engineers or the chartered accountants for necessary penal action against them including dismemberment on account of breaches committed as set out in Expln.2 to Reg.4.

(iii) Publication on website: Regulatory Authority shall publish and maintain with details a website of records for public viewing of all registered real estate projects, maintain a data base with particulars of promoters and real estate agents and ensure cyber security of its website [Sec.34(b)(c)(d) and Rules 20, 21 & 22].

(iv) Reference to Competition Commission of India: Where an issue is raised relating to agreement, action, omission, practice or procedure that has an appreciable prevention, restriction or distortion of competition relating to development of real estate project or has the effect of market power of monopoly situation being abused for affecting interest of allottees adversely, the Regulatory Authority may suo-motu make a reference on such issue to the Competition Commission of India [Sec.38(3)].

C. Real Estate Appellate Tribunal:

(i) Establishment: The Real Estate Appellate Tribunal (Appellate Authority) is established under Sec.43 of RERA by the appropriate Government with the prefix of the name of the State or Union Territory as the case may be.

(ii)  Filing of appeal: An appeal to the Appellate Tribunal may be filed by the appropriate Government or the competent authority or any person aggrieved by any direction, decision or order of the Regulatory Authority or of the Adjudicating Officer. The appeal shall be filed in Form ‘C’ and in the manner set out in Rule 9 of Mah. Recovery/Appeal Rules.

(iii) Pre-deposit by promoter: Where a promoter files an appeal, he shall first deposit with the Appellate Tribunal at least 30% of the penalty or such higher percentage as determined by the Appellate Tribunal or the total amount to be paid to the allottee including interest and compensation imposed on him, if any, or with both, before the appeal is heard [Proviso to Sec.43(5)].

(iv)Period of filing and disposal: The appeal shall be filed within a period of 60 days from the receipt of the copy of the direction, order or decision. Endeavour shall be made to dispose of the appeal within a period of 60 days from the date of the receipt of appeal [Sec.44(5)].

(v) Orders and directions: The Appellate Tribunal after calling for records and after examining the legality or propriety or correctness of the order, make such orders, including interim orders, as it thinks fit under Sec.44(3).

(vi) Enforceability of orders and directions: The order passed by the Appellate Tribunal is executable as a decree of civil court [Sec.57& Rule 4 of Mah. Recovery/Appeal Rules].

(vii) Recoveries: The recovery of interest, penalty and compensation shall be in the manner as set out under Sec.40 and Rule 3 of Mah. Recovery/Appeal Rules.

(viii) Powers: The Appellate Tribunal shall not be bound by the procedure laid down in CPC but shall be guided by the principles of natural justice and shall be vested with same powers as are vested in civil court under CPC. The Appellate Tribunal shall have power to regulate its own procedure. It shall not be bound by the Rules of evidence. All proceedings before the Appellate Tribunal shall be deemed to be judicial proceedings [Sec.53]. Appellate Tribunal shall have power to impose penalties on the promoters, allottees and real estate agents under Secs.64, 66 & 68.

D. Appeal to High Court:

Appeal from order of Appellate Tribunal lies to the High Court within a period of 60 days from the communication of the order [Sec.58].

E.  Central Advisory Council:

The Central Government may establish Central Advisory Council to advise and recommend the Central Government on all matters concerning the implementation of RERA, major questions of policy, protection of consumer interest, foster the growth and development of real estate sector or any other matter as assigned by Central Government [Secs.41 & 42].

F. Compounding of offences:

If any person is punished with imprisonment, then either before or after the institution of the prosecution, the punishment may be compounded by the court by accepting a sum of money as is specified in the Table to Rule 5 of Mah. Recovery/Appeal Rules.The sum prescribed shall not, in any case, exceed the maximum amount of the fine which may be imposed for the offence so compounded [Sec.70 & Rule 5 of Mah. Recovery/Appeal Rules].

Uncorked by K.R. Bulchandani, Advocate & Solicitor ably assisted by Avik Sarkar & Amit Nikam, Advocates, team of M/s. Kamal & Co., Mumbai.