FAQ

FAQ

Yes. A project is exempted from registration under RERA if:
• Land proposed to be developed is less than 500 sq.mt. (inclusive of all phases), or
• No. of apartments less than 8 (inclusive of all phases), or
• Received Completion Certificate from the Competent authority i.e. plan sanctioning authority prior to the commencement of the Act, or
• For the purposes of renovation or repair or re-development does not involve marketing, advertising, selling or new allotment of any apartment, plot or building, as the case may be under the real estate project
For Ongoing projects (Projects that have not received the Completion Certificate on the date of commencement of the Act), Promoters should make an application to the Authority within 3 months from the date of commencement of the Act.
The Act does not have any provision stating that ongoing Projects have to stop sales or construction till getting the registration. The responsibility of the Promoter of ongoing project is to apply for registration within three months. The rules may clarify the same, however, we advise caution in this regard.
The period of the Registration will be the period as declared by the Promoter for the completion of the Project in the Affidavit submitted along with the Application for Registration to the Authority.
It has been made compulsory for the Authority to grant Registration to the Promoter for the period declared by him and Authority.
Registration is of the Project/Phase and hence the provisions of the Act are likely to be applicable to all units of the Project/Phase.
No. Promoter has to register the Project before he starts any form of advertising or selling the units and not after getting the building plan sanctioned / commencement certificate.
Hence a promoter can start his construction, complete his show flat, excavation and any other construction he desires and then register the project under RERA.
RERA empowers any aggrieved person to file a complaint with the Authority, which will include a person who has an agreement executed before the project is registered with the Authority. Hence yes, such allottees / persons can approach RERA Authority for redressal for grievances or compensation. The terms of such agreements shall be in force and may be invoked for claiming compensation or any other relief before the Authority.
A promoter can approach the Authority & apply for extension of the date of completion of the project, under FORCE MAJUEREas explained under RERA.
Also the Authority may in reasonable circumstances, without default on the part of the promoter, based on the facts of each case, and for reasons to be recorded in writing, extend the registration granted to a project for such time as it considers necessary. However in aggregate this shall not exceed a period of one year.
The complaint for revocation of registration can be filed by:
a) Any person
b) Recommendation of the Competent Authority (Local Government / Planning Authority etc.)
The Authority can also revoke the registration suo-moto.
Registration can be revoked by the Authority after being satisfied of:
• Default in respect of any obligation under the rule, regulation or any provision of the Act
• Violation of any of the terms or conditions of the approval given by the competent authority
• Involvement in unfair practice or irregularities (See next Question for meaning)
• Indulging in fraudulent practices
• The practice of making any statement, whether in writing or the visible representation which
  • falsely represents that the services are of a particular standard or grade
  • represents that the promoter has approval or affiliation which such promoter does not have
  • makes a false or misleading representation concerning the services
• The promoter permits the publication of any advertisement or prospectus whether in any newspaper or otherwise of services that are not intended to be offered
• The promoter indulges in any fraudulent practice
• The Authority shall bar the promoter from accessing its website
• It will specify the promoter’s name and photograph in the defaulters list
• Inform the Authorities in other states and union territories about such revocation
• Freeze the separate bank account where 70% amount is deposited
• On consulting with the State Government, the Authority may ask the association of allottees or the competent Authority or any other promoter to complete the remaining work in the said project
• May pass any other orders it deems fit
Presently the layout or building plans sanctioned by the competent authorities like PMC, PCMC or PMRDA do not mention individual phases. Phases are decided by the developer himself. Therefore the developer can define the phases. Please note that the phases should be clearly defined along with all necessary infrastructure as well as amenities to be provided with that phase. Incase a developer shows amenities of the full project with the first phase, all the amenities will necessarily need to be completed as promised within the time. In this situation it will be necessary to state in the documentation that the amenities provided include the rights for future phases to also use the same amenities.
This issue needs to be taken up with the competent authorities as & when it frames the regulations in this regard. The Regulations that shall be framed by the Authority will provide clarity on this.
Promoter on receiving Login ID and password is required to create his webpage and enter all the details of the project including –
• Registration details
• Quarterly up-to-date list of number and types of apartments or plots and garages booked
• Quarterly up-to-date list of approvals taken and pending subsequent to commencement certificate
• Quarterly up-to-date status of project
• Such other informationand documents as may be specified by the regulations made by the Authority
a) If Allotee retains the apartment –he can claim compensation from the Promoter if he has suffered loss or damage
b) If Allottee cancels– refund entire investment plus interest and compensation (Note: It seems for cancellation, showing allottee suffered loss is not required)
In our view, only advertisements of the Project require prior registration of the project. Advertisement of the promoter which do not mention the project do not seem to require registration.
Advertisement of large projects which will have many phases should be done with utmost care. As per the strict interpretation of the Act, Developers will find it difficult to show the full layout if it is not registered. E.g. out of 10 buildings if only 4 are registered, technically it is a default to “advertise” the balance 6 buildings.
If a project is registered in multiple phases under RERA, then the RERA Registered Numbers for all the Phases should be displayed on the Advertisements for the entire Layout.
The Promoter is required to make available the following information at the time of booking and issue of allotment letter:
• Sanctioned plans, layout plans, along with specifications, approved by the competent authority, by display at the site or such other place as may be specified by the regulations made by the Authority
• Stage wise time schedule of completion of the project, including the provisions for civic infrastructure like water, sanitation and electricity
The promoter cannot accept any sum more than ten percent of the cost of the apartment or plot or building as the case may be, 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 agreement for sale under any law for the time being in force.
Yes, the agreement for sale has to be in such form as prescribed and shall specify the particulars of development of the project and includes the specifications of the developments works, payment modes, date of possession etc.
• Carpet area to be mentioned. Carpet area as defined by RERA.
• Rate of interest to be paid by the promoter or allottee in case of defaults
• Date of possession (with due regard to contingencies)
• Change in defect liability clause
• State wise completion of project including provisions to be made by promoter
• Formation of Society / Association of Allottees
As per RERA the Promoter can sell only ‘garage’ which is clearly defined to state an area that is used for parking and has walls on three sides. RERA has does not have provision enabling the developer to sale car parks. It is noted that “Open Parking” and “Common basements” have been included in definition of Common Areas. Common Areas have to be handed over the Association of Allottees e.g. Society.
Communication to a customer by an authorised agent can be treated as an advertisement, which is binding on the promoter. Hence we need to execute an agreement with the agent specifying all the details of project with a condition that the agent shall not communicate / commit anything not mentioned in such agreement. Also the agent can be asked to join the agreement as a Confirming Party.
RERA puts an obligation on a promoter to obtain consent ofeachallottee, if he wants to change the building plans for the phase that is registered. If a subsequent phase is not put up for sale, it need not be registered and hence the promoter can change the plans of the subsequent phases without obtaining consent of the allottees from current / ongoing phases.
RERA protects the interest of all the Allottees; including those who have executed an agreement before the project is registered under its provisions. Hence if the promoter wants to change the building plans post registration, then consent of all pre-registration allottees shall be required as well.
Changes to larger townships will be of two types:
a) Change in Plans, Layouts etc. of the Phase / s which have been registered will need permission of 2/3rd allottees of each Phase.
b) Change in plans, layouts etc. of phases that are not registered will not require consent of allottees of Phases that are registered if such change is not affecting the Plans of the registered Phases. E.g. if Change in layout of Phase 2 leads to change in common areas, road etc. of Phase 1 then consent of allottees of Phase 1 will also be required
In our view, changes to Phase 2 which is not registered will not require consent of allottees of Phase 1 if the layout of the entire project submitted at the time of registration of Phase 1.
A promoter should meticulously plan the first phase & common areas and then declare the individual date of handing over possession of the first phase & common areas. RERA does not restrict declaration of separate dates for the phases & common areas.However each phase along with the development works shall have to completed and handed over to the allottee within the time frame defined by the promoter for that project.
Carpet area is basically now the net usable area of an apartment including area under internal walls.
It does not include the area under the external walls, areas under service shafts, exclusive balcony, verandah or an exclusive (attached or overhead) open terrace. However, the carpet area will include area under the internal partition walls.
The estimated cost of a real estate project means the total cost involved in developing the project and includes land cost, taxes, cess, construction and development cost. The promoter is under obligation to withdraw amount from the separate account only in proportion to percentage of the completion of the project. The amount he is allowed to withdraw shall vary with “estimated cost of the project”.
RERA has a power to impose penalties on the promoter for various violations of any provision of the act, rules or regulations. This penalty is directly based on the “estimated cost of the project”.
The Promoter has to rectify the following defects which are brought to his notice within five years of handing over the possession to the allottee:
a) Structural
b) Any other defect in workmanship
c) Defect in quality or provision of services
d) Defect in any other obligations of the promoter as per Agreement for Sale
This period of 5 years shall continue even after conveyance of the project.
The promoter has to rectify the defect without any charge with thirty days after they are brought to his notice.If the promoter does not rectify the defect the allottee will be entitled to compensation.
Promoter has to obtain all such insurance as notified by the State Government. So insurance will be compulsory only after the Notification is issued by the State Government. The Act says that the State Government can prescribe various types of insurance including but not limited to
a) title of the land and building as a part of the real estate project; and
b) construction of the real estate project.
The promoter is liable to pay the insurance premium before transferring the same to the allottee / association of allottees. The documents related to insurance will have to be handed over to the association of allottees when the same is formed.
In the absence of any local laws, the Promote has to ensure that an association of allottees is formed within three months of majority of allottees having booked their apartment in the project.
In the absence of any local laws, the Promoter has to enter into a registered conveyance deed in favor of the association of allottees within three months of date of issue of the occupancy certificate.
The period of registration granted by the Authority can be extended in case of force majeure i.e. events beyond the control of the promoter.
Force majeure explained in RERA is a case of:
a) war,
b) flood
c) drought
d) fire
e) cyclone
f) earthquake or
g) any other calamity caused by nature affecting the regular development of the real estate project.
In most States, extension fees need not be paid in case the extension is due to force majeure.
Yes the Authority can extend the period of registration by upto 1 year in all for a Project if:
a) it satisfied that there are reasonable circumstances for the extension based on facts of each case
b) there has been no default on the part of the promoter
c) it has to record the reasons for extension in writing
If the Authority has to grant multiple extensions, the total period of all such extensions cannot exceed one year.
Yes. The Promoter can transfer or assign the project to a third party. However if he is transferring his majority rights and obligations in the project it is subject to following conditions:
a) Prior written consent of two-thirds of the allottees excluding the promoter
b) Prior written consent of the Authority
Such transfer shall not affect the allotment or sale by the erstwhile promoter
The new promoter will have to independently comply with all the conditions of the Act, Rules and the obligations under the Agreements for Sale entered into by the erstwhile Promoter.
The period of registration of the project will not be extended due to such transfer and the new promoter will be responsible for consequences due to breach of the Act, Rules or Agreement for sale or delay in the project.
Ensuring perpetual clear title of land even after handover without any time barring is one of the stringent provision of RERA. Developers will have to take due care at the time of buying the land of title search and due diligence to avoid / minimize such claims in the future.
Also we expect that Title Insurance should be available in the time to come as the Government will have to take some action on that front due to provision in RERA.
Compensation is an amount adjudged by the Adjudicating Officer in case of a complaint filed by an allottee / purchaser. This amount has to be paid to the allottee / purchaser. Penalty is an amount decided by the Authority or Appellate Tribunal in case of violation of any of the provisions of the act, rule or regulation under RERA. This amount is to be paid to the Authority or the Tribunal.
It seems that the Promoter cannot claim compensation from the allottee since the provisions related to Duties of the Allottee mention payment of only interest in case of delay and default.
However the Promoter can file an application with the Authority for the default by the allottee and Authority can levy a penalty if it finds that there is a default of the Act, Rules or regulations e.g. not participating in formation of society, not taking possession within two months of obtaining of occupancy certificate etc. are obligations cast by the Act on the allottee and their contravention can invite a penalty upto five percent of the cost of the apartment and a further penalty and even imprisonment in case of continued default.
Yes. The Authority has a power to call for any information about any issue falling under its scope. The Authority can even appoint an officer to conduct an inquiry & submit a report in such a case.
RERA does not impart any powers to the Authority to influence the project approval process. However, the RERA Authority can recommend to the state government about the single window clearance system or establishment of a robust grievance redressal mechanism.
Yes. Any person, who is aggrieved by any order of the Authority or the adjudicating officer, can prefer an appeal with the Appellate Tribunal, within 60 days from the date of receipt of such order.
Yes. Any person aggrieved by any order or direction of the Tribunal can make an appeal before the High Court within 60 days from the date of receipt of such order.
No. RERA bars any civil court to hear & try any matter or issue any STAY order, in respect of any matter for which powers are vested with the RERA Authority or the Tribunal. However, one can always approach the High Court with a Writ Petition under article 226 of the Indian Constitution, since the High Court is not a civil court but a constitutional court.
a) The Authority has power to appoint in consultation with the State Government a Judicial Officer who is or has been a District Judge to be an Adjudicating Officer for the
b) The role of the Adjudicating Officer is to adjudge compensation under following sections:
   a. Sec 12: Obligations of the Promoter regarding veracity of advertisement or prospectus. 

   b. Sec 14: Adherence to sanctioned plans and project specifications by the promoter 

   c. Sec 18: Return of amount and compensation 

   d. Sec 19: Rights and duties of allottees
c) The Adjudicating Officer has to hold an enquiry as prescribed by the Rules by giving any person concerned a reasonable opportunity of being heard
d) The Adjudicating officer has to dispose of the application expeditiously and dispose off the same within sixty days. If it is not disposed off then he has to record the reasons for the delay in writing.
e) Adjudicating Officer has to the power to summon and enforce attendance of any person who knows the facts of the case to give evidence or produce documents which in his opinion may be useful for the case
f) After such enquiry if the Adjudicating Officer is satisfied that that the person has failed to comply with the provisions of sections mentioned in (b) above he may direct such person to pay such compensation or interest as he thinks fit according to provisions of those sections.
The Authority can issue an interim order restraining the promoter from carrying on certain act if it is satisfied during an enquiry that an act which contravenes the provisions of the Act, Rules or Regulations:
a) has been committed and continues to be committed
b) is about to be committed
The Authority can pass an order without notice to the promoter restraining the promoter from carrying on such an act until the conclusion of the enquiry or until such further orders by the Authority.
It is to be noted that such interim orders need not pertain to just “Stop Work” but any other retraining order also e.g. stopping sale of apartments, creating encumbrance of the property etc.
Also such interim orders can be passed against the promoter, allottee or real estate agent.
Compounding of offences means the power given to the Court to levy a penalty in the form of a compounding fee instead of sentencing the person to imprisonment.
As per RERA, compounding can be done after punishment with imprisonment is pronounced under the Act the person can before or after prosecution is instituted be compounded by the court.
As per RERA, the sum that the court can levy as compounding fee should not exceed the maximum amount of penalty for the offence so compounded.
Example: If the offence is selling the project without registering the same with Authority, the maximum penalty that can be imposed is 10% of estimated cost of the project. The compounding fee cannot exceed this sum.
As per RERA no Civil Court shall have jurisdiction to entertain any suit or proceedings for which the powers have been given to the Authority or Adjudicating Officer or Appellate Authority.
However the following forums are open for filing of complaints:
a) Criminal Court
b) Consumer Court
A person whose case is pending with the Consumer Disputes Redressal Forum or the Consumer Disputes Redressal Commission or the National Consumer Redressal Commission, established under section 9 of the Consumer Protection Act, 1986, on or before the commencement of this Act he may, with the permission of such Forum or Commission, as the case may be, withdraw the complaint pending before it and file an application before the adjudicating officer under this Act.
RERA is likely to impact the cost as follows:
• Cost of capital required for the project due to ban on prelaunch sale
• Withdrawal from the separate account now has to be in proportion to percentage of completion of the project. Hence swapping of amount between different projects will not be possible.
• Registration fees
• Insurance covering land cost & construction cost
• Defect Liability Period
• Interest & compensation that may be required to be paid to the purchaser
• Penalty that may be charged by the Authority
• Increased documentation with the purchasers, estate agents etc.
• Increased manpower for various compliances under RERA
RERA can be very effectively used to curb unauthorised construction. Although RERA does not directly prohibit a developer from constructing an unauthorised building, it certainly prohibits “sale” of such unauthorised units. Projects with unauthorised construction cannot obtain registration under RERA and hence if a promoter wants to sell his unauthorised flats. Any person (including a promoter) can complain to the Authority about such sale and the Authority can impose heavy penalty and imprisonment to the concerned developer.