Builders’ Association of India Chairman says RERA is a dedicated authority

The Builders’ Association of India (BAI) on the Supreme Court’s recent judgement allowing homebuyer for compensation uphelding the consumer court’s order stated that Real Estate Regulatory Authority (RERA) is formed only to resolve real estate related matters. Anand Gupta, Chairperson of housing and RERA committee of BAI said, “RERA has been doing a great job. The RERA act was approved by the Parliament of India in 2016 and from 2017 it was implemented. After 70 years, such authority was formed where builders and homebuyers can seek justice.” RERA was established to expeditiously hear the real estate matters unlike other civil courts that listen to several other matters, he asserted.

Meanwhile, he also stated, “Of course, homebuyers will have an option to approach the various courts of law and with this judgment, now it is clear that consumer court can also pronounce on real estate projects where the possession has been delayed or homebuyer seeking a refund. Though the platform was open earlier too but this judgement now specifically cites that homebuyers can reach consumer forums with their complaints.

Instead of doing so, the SC in its judgement could have directed the parties to approach RERA and if not satisfied then further to appellate tribunal, HC among others, Gupta explained.

The matter is about a Housing Scheme “The ESFERA” in, Gurgaon, launched by the builder (Appellant) sometime in 2011, and all the original complainants — Anil Patni and others booked their respective apartments by paying the booking amounts and thereafter each of them executed Builder Buyer Agreement.

However, even after four years, there were no signs of the project getting completed. In the circumstances, the homebuyer approached the consumer commission that ordered the builder to pay Rs 50,000 as compensation. However, the builder approached SC wherein, it upheld the order to be paid by the appellant in respect of each of the consumer cases, over and above the amounts directed to be made over to the complainants and shall form part of the amount payable by the appellant to the complainants.

Source: https://www.freepressjournal.in/mumbai/builders-association-of-india-chairman-says-rera-is-a-dedicated-authority

Haryana RERA penalises several realtors for malpractices

Chandigarh

Acting tough, the Haryana Real Estate Regulatory Authority has penalised several colonisers for indulging in malpractices.

The RERA bench, headed by its Chairman K.K. Khandelwal and member S.C. Kush, on Tuesday took action against the promoters of various companies in the wake of complaints by allottees.

In proceedings against CHD Developers, Ireo Private Ltd, Landmark Apartments Private Ltd, Siddhartha Buildhome Private Ltd, Vatika Ltd, Tashee Land Developers Private Ltd and Tulsiani Constructions and Developers Private Ltd, it ordered attachment of the bank accounts to the extent of Rs 7 crore along with the movable properties of their directors.

An order has been given to issue a bailable warrant against the directors of Prime Time Infra Projects Private Ltd for not complying with the orders of the authority.

During the hearing pertaining to execution petitions, the authority observed that Clarion Properties Ltd has committed a gross violation of Section 3 of the Act by not registering its project with the authority.

It directed to issue a show-cause notice against the developer for non-registration of project under Section 59, which states that “the promoter shall be liable to a penalty up to 10 per cent of the estimated cost of the real estate project” and if the promoter continues to violate the provisions of Section 3, he shall be punishable with imprisonment for a term up to three years or with fine further up to 10 per cent of the estimated cost of real estate project, or with both.

Stringent action has been taken against the promoter in the complaints against Supertech Ltd, with the authority ordering it to pay Rs 5 crore to the allottee for delay in handing over of possession by the promoter.

A hefty cost of Rs 130,000 was imposed on Supertech Ltd for not filing reply within the stipulated time and the fine has been paid, which will be disbursed to the allottees.

Khandelwal, in a statement, said that such actions against the defaulting promoters would not only help providing an environment of growth and development of the real estate sector but would also assist the allottees in gaining and preserving their trust in the authority for quick redressal.

Source: https://realty.economictimes.indiatimes.com/news/regulatory/haryana-rera-penalises-several-realtors-for-malpractices/78914563

No new projects if old ones pending: Haryana-Rera

The Gurugram bench of Haryana Rera on Friday issued a notice to blacklist and debar a real estate company, Empire Realtech, and its promoter CHD Developers from launching any new project till ongoing ones are completed. It’s the first time the regulator has taken such a tough measure as delays in delivery of homes have turned into a chronic problem both in the city and other parts of NCR’s struggling but massive real estate sector.

CHD Developers had launched a housing project under Empire Realtech in 2011 – 106, Golf Avenue in Sector 106 – with a promise to offer possession by December 2016. The homes have, however, not been delivered yet. The promoter intimated the revised date for completion to H-Rera as June 30, 2021 at the time of registration in 2016. “But keeping in view the present situation of funds and stage of construction, there is every likelihood of further delay of the project,” observed the bench comprising chairman KK Khandelwal and members SC Kush and Samir Kumar while deciding to issue a notice asking why the company should not be blacklisted and debarred from launching new projects till it completes existing ones.

“The quarterly progress reports have not been submitted by the developers (as required under Rera rules) either,” Khandelwal said. The notice asks why penal proceedings should not be initiated and a penalty that may be up to 5% (Rs 28 crore) of the project cost should not be imposed. “The promoter has been asked to submit a mitigation plan for completion of the project within a month in consultation with the association of allottees. The authority has also given an option to the association of allottees on taking over the project for its completion,” Khandelwal added.

There are 642 units in the project, of which 600 have been sold. Nearly Rs 500 crore has been collected from homebuyers. The promoter has also taken a loan of Rs 150 crore, of which Rs 36 crore is outstanding. The bench said since the promoter had not opened a separate Rera account for the project, instalments paid by homebuyers were received in the bank’s escrow account, and the money deposited in the account was taken away by the lender against the loan. Consequently, there were no funds left for construction.

Source: https://timesofindia.indiatimes.com/city/gurgaon/h-rera-serves-first-debarment-notice-toughens-stance-on-housing-delays/articleshow/78836639.cms

Ladakh notifies RERA rules, ushers in new era in real estate development in UT

Ladakh has become the 34th union territory to have notified the rules under the Real Estate (Regulation and Development) Act leading the way for property development to take place in the region.

“Extremely happy to share that Ladakh becomes the 34th State/UT, which has notified Rules under RERA. It was done on 8 October 2020. It paves the way for implementation of this transformative legislation in the Union Territory, opening new vistas of real estate development journey,” secretary, ministry of housing and urban affairs, Durga Shanker Mishra tweeted.

In August, the union territory of Jammu and Kashmir had notified the rules under RERA becoming the 33rd state/union territory to do the same.

“The move will open up new vistas for the development of the union territory J & K by ensuring efficient & transparent transactions. It will also ensure timely delivery & quality construction of real estate projects,” Mishra had tweeted then.

According to statistics provided by the MoHUA more than 52,000 real estate projects and 40,517 real estate agents have registered under RERA across the country. Nearly 50,000 complaints have been disposed-off by the Real Estate Regulatory Authorities across the country.

Out of this, nearly 57 percent cases or approximately 27,581 complaints were resolved in the last one year alone.

Uttar Pradesh takes the lead with as many as 18,509 cases disposed off by the UP RERA authorities so far, against a mere 5,989 cases a year ago.

Haryana is at a distant second with nearly 9,919 cases disposed of currently as against 3,123 cases in the corresponding period of 2019. Maharashtra’s MahaRERA has so far disposed of nearly 7,883 cases, an analysis by Anarock property consultants has said.

Project registrations have seen a 24 percent annual jump – from 43,208 projects as on July-end 2019 to nearly 53,364 projects presently, the analysis said.

The states with maximum project registrations currently include Maharashtra, Gujarat, Karnataka, Madhya Pradesh, Uttar Pradesh, Telangana and Tamil Nadu.

Following the coronavirus pandemic over 23 states RERA Authorities have so far extended registration of projects by six months and one by nine months following the situation created by the coronavirus pandemic and this has been done to safeguard the interests of homebuyers.

Source: https://www.moneycontrol.com/news/business/real-estate/ladakh-notifies-rera-rules-ushers-in-new-era-in-real-estate-development-in-ut-5952301.html

Unprecedented! In a first MahaRERA fines homebuyer for payment delay to builder

The Maharashtra Real Estate Regulatory Authority (MahaRERA) in an unprecedented case, has asked a homebuyer to pay penalty in the form of interest to the developer for delay in payment. This is contrast to usual directives from the authority to developers to pay penalty for delayed possession to a homebuyer.

According to a report in the Economic Times, SMP Namrata Associates, a developer, complaint against a home buyer for not making payment despite several demand letters.

The homebuyer had entered into an agreement with the developer to buy an under-construction apartment in Pune and the same was registered in August 2019. According to the builder’s complaint, the homebuyer had not made any payment despite several demand letters between August and December 2019.

The homebuyer then in January 2020 sent a legal notice to the builder for non-allotment of car parking space. This, along with an increase in GST charges, was cited by the homebuyer as reasons for not making payment to the developer, the business daily mentioned.

The developer then approached MahaRERA to seek its directions for cancellation of the agreement and forfeiture of the amount paid by the buyer at the time of booking.

The homebuyer had claimed that the complainant being a promoter cannot file a complaint against the allottee as there is no provision under RERA to file such complaint.

MahaRERA member, Vijay Satbir Singh opined that that the buyer being an allottee is liable to make payments in accordance with the terms and condition of the sale agreement, the publication mentioned.

The authority is of the view that in case of any default on the part of allottee or the promoter, either party would be entitled to seek interest for such a default as prescribed by the Real Estate (Regulation & Development) Act, 2016.

Source: https://www.timesnownews.com/business-economy/industry/article/unprecedented-in-a-first-maharera-fines-homebuyer-for-payment-delay-to-builder/663475

Bombay HC directs developer to pay Rs 5 cr for delay in property hand over

Mumbai

The Bombay High Court has directed real estate developer Renaissance Infrastructure to pay Rs 5.04 crore as compensation to a person who had not been handed over his property in Mumbai even after a delay over 80 months. A single bench of Justice S C Gupte on September 25 upheld the orders of the Maharashtra Real Estate Regulatory Authority and the RERA Appellate Tribunal that had ordered for the compensation amount to be paid to the purchaser.

The developer had approached the HC, challenging orders of RERA and the RERA Appellate Tribunal passed in January this year. As per the HC order, the purchaser bought six plots of land and some warehousing buildings from the developer in December 2009.

According to the sale agreement, the warehousing buildings and plots were to be handed over to the purchaser by March 9, 2010. The agreement also said that if the developer failed to hand over the properties on time, he would be liable to pay the purchaser a compensation amount at the rate of Rs 10 per sq ft per month.

When the developer failed to hand over the property, the purchaser approached the RERA that calculated the compensation amount as Rs 5.04 crore. The Renaissance Infrastructure challenged this order before the appellate tribunal, which asked the developer to deposit 50 percent of the compensation amount as per the RERA Act for entertaining the appeal.

But, when the developer failed to pay the pre-deposit, the appellate tribunal dismissed the appeal. The developer then filed a second appeal in the HC.

In his order, Justice Gupte dismissed the second appeal after holding that there were no infirmities in the orders passed by the RERA and the appellate tribunal. He held that the orders do not give rise to ”any substantial question of law for the consideration of the High Court”.

Justice Gupte said the Renaissance Infrastructure was liable to hand over the property as agreed to. ”Under this agreement, termed as an agreement for sale, the appellant (Renaissance) was bound to hand over possession of the suit premises to the respondent within an agreed period,” the high court said.

It directed the developer to pay Rs 5.04 crore to the purchaser within four weeks.

Source: https://www.cnbctv18.com/legal/bombay-hc-directs-developer-to-pay-rs-5-cr-for-delay-in-property-hand-over-7063901.htm

Real estate body to revive stalled projects in NCR

Lucknow

After its intervention to restart a stalled housing project in Noida, the Uttar Pradesh Real Estate Regulatory Authority (UPRERA) is now contemplating to help resume operations of other stalled projects in the state.

The UPRERA decided to step in after successful restart of the Jaypee Kalypso Court (Phase-II) project which restarted construction work at the site after a wait of nine years, on September 19 as UPRERA facilitated conciliation between the promoter and the allottees.

As per the UPRERA sources, NCR region has witnessed many projects slipping into a limbo making it miserable for the buyers who end up making a huge investment for a house of their own but the projects get delayed as the builders often fail to fulfil commitments made to homebuyers.

According to Rajive Kumar, chairman, UPRERA has been successful in resolving the dispute and restart a stalled project. “Jaypee Kalypso Court project of Jaiprakash Associates Limited has been the first such project that UPRERA had taken up for revival and now the promoter has commenced construction work on the project” added Kumar.

Not only NCR, but the regulatory authority is planning to extend this approach to various other districts also in the state where projects are stalled either due to an impasse between the promoter and the homebuyers or the completion date, as declared by the promoter, has lapsed, including the one-year extension permissible under Section 6 of the RERA Act.

In Lucknow, several housing projects of private developers are stuck for several years. Allottees in the state capital want RERA to intervene to restart these pending projects.

According to RERA officials, based on the audit done by consultant Currie & Brown, it has come to light that around 40 stalled projects in Gautam Buddha Nagar district could restart with the intervention and following conciliatory tactic between the promoter and the buyer. This approach is ideally suited to such projects where the promoter is keen to complete the project but unable to do so either due to expiry of registration of the project with UPRERA or due to differences with allottees.

Source: https://www.newindianexpress.com/nation/2020/sep/22/real-estate-body-to-revive-stalled-projects-in-ncr-2200278.html

K-RERA to penalise realtors for not filing project updates

In a new measure that will ensure compliance of rules by real estate developers, the Karnataka Real Estate Regulatory Authority (K-RERA) has decided to levy penalty on builders for failure to submit quarterly and annual updates.

The Section 11 of the Real Estate (Regulation and Development) Act, 2016 and Rule 15(D) of Karnataka Real Estate (Regulation and Development) Rules, 2017 mandates the promoter to perform certain functions including submission of quarterly updates on the RERA website.

In a circular issued on September 3, the K-RERA said any builder who fails to upload quarterly updates will be levied a penalty of up to Rs 10,000 up to one month of delay and Rs 20,000 per month beyond that.

The delay fees shall be effective from the date of the circular and the promoters shall remit the fees through RERA E-Payment at the time of filing of the quarterly updates as enabled by the Authority on its website, the circular said.

The K-RERA has enabled the facility on its website for online filing of quarterly updates and annual audit for the registered projects.

The K-RERA said it has been observing that many of the promoters are not filing quarterly updates and annual audits on its website within the prescribed time in accordance with Rules 15(D) and Section 4(2)(1)(D), post-registration of their projects.

The Rule 15(D) mandates that a promoter shall upload updates on the webpage for the project, within 15 days from the expiry of each quarter on apartments/plots, garages booked, the status update of each building, floor, internal infrastructure and common areas construction with photographs, details on project approvals received, applied and expected date of receipt, approvals to be applied among others.

The compliance of the new rule, which has come into force from September 3, will enable homebuyers to take a comparative decision on buying a property. Every quarter, the builders are required to submit reports on project status, update, sanctioned plan, details of amenities, facilities that will come up in their project.

Source: https://www.deccanherald.com/business/business-news/k-rera-to-penalise-realtors-for-not-filing-project-updates-883999.html

Should you keep paying EMIs after the builder misses possession date?

Mumbai

In a recent case involving a housing complex, Rivali Park Project in Borivali—now called Wintergreen—the builder contended that buyers making payments after the possession date has passed amounts to them agreeing to the delay. But the Maharashtra Real Estate Regulatory Authority (MahaRera) rejected the developer’s claim that the homebuyers had consented to the delay because they kept paying the instalments despite the chance in possession date.

“As per Rera guidelines, in case of a delay by the developer in completion of the project, buyers may opt for either cancelling the deal and claiming refund with interest, or to continue the agreement and seek compensation for the delay period,” said Mukesh Jain and Associates, a Mumbai-based law firm.

Even though MahaRera ruled against the builder in this case between CCI Projects Ltd. and homebuyers, saying buyers were eligible to receive interest payment for the delay period, this might not always be the case.

So, does it make sense to keep making payments after the promised possession date passes?

According to Anuj Puri, chairman, Anarock Property Consultants, you may not have a choice.

“Frustrated with the prolonged project delays, many buyers stop payments to developers. However, under the agreement to sale, sellers or developers are well within their legal right to cancel the booking if buyers fail to honour their part of the payment deal. Since each case may be different, a legal person must always advise on such matters,” he said.

Puri added that although MahaRera ruled in favour of the buyers, the exact variables may differ from case to case and not all such cases are equal in the eyes of the law. “Despite Rera being in place across the country, it is still largely work-in-progress. It is very much a case-to-case scenario. Moreover, respective states’ and union territories’ Reras have their own rules and regulations. Therefore, buyers should first seek local legal advice before taking any action,” he said.

According to Anuranjan Mohnot, MD and CEO, Lumos Alternate Investment Advisors Pvt. Ltd, Rera needs to be simplified to protect interest of homebuyers as well as developers.

“To avoid situations like this, Rera should introduce a milestone-based project review instead of just having one parameter of delays with respect to the possession date. This will help buyers to sense serious deviations at an early stage and they can approach Rera for taking proactive steps to avoid major delays,” he said.

Even in states with a fully functional Rera in place, moving the authority in favour of homebuyers might turn out to be a challenge. It can be very frustrating to have inordinate delays in getting possession of your house, but discontinuing payments can cause further complications. Consider the circumstances and seek legal advice to protect your interests as a homebuyer.

Source: https://www.livemint.com/money/personal-finance/should-you-keep-paying-your-emis-after-the-builder-misses-possession-date-11598349480123.html

Developer can’t add extra floor without nod of buyers: Maharashtra real estate regulator

Mumbai

In a major judgment, the Maharashtra Real Estate Regulatory Authority (MahaRera) disallowed a builder last week from carrying out the construction of an additional floor for his project at New Panvel without the consent of the buyers who already bought flats in the building.

The ruling is significant, as builders over the years modified plans and made additions to their existing constructions without taking the buyers into confidence, leaving the latter helpless, as they were promised a completely different structure.

The case was filed by four homebuyers – Deepesh Singh, Sujay Joshi, Nikhil Bare and Vaibhav Ballal – against Ms Neelkanth Constructions, for its Neelkanth Vihar Phase I project at New Panvel.

The complainants alleged that despite receiving the possession of their flats, the developer is yet to form the society and allot parking spaces to the occupants.

Responding to the complaint, Neelkanth Constructions said it wanted to utilise the unused floor space index (FSI). Accusing the complainants of ulterior motives, Neelkanth Constructions contented that after taking the possession of their flats, the buyers cannot stop it from consuming the FSI of the entire land.

The developer said they started the process of forming the society, but the complainants kept obstructing the respondent to extract money from the builder. Hence, the society formation process was stopped. The developer also said that if the complainants do not disrupt the process, it will go ahead with the formation of the society.

However, while hearing the case, the state real estate regulator cited section 14 of the Real Estate (Regulation and Development) Act (RERA) 2016, which mandated that any modification in the building plans, including the construction of additional floors, required the requisite consent of two-third of the allottees.

“With regards to the construction of additional floor to be constructed in the building, MahaRera directs that without the consent of two-third of the allottees, as prescribed under section 14 of the RERA, a respondent would not carry out any construction on site,” MahaRera said in its ruling.

According to housing activist Vinod Sampat, a builder loses his/her right of modification after the first apartment is sold.

“It is binding on the builder to obtain the consent of the buyer, as the latter has booked [the property] based on the plans given by the developer. Any additional construction would be a burden on the homebuyer, and hence, the consent [of the buyer] is required. Even the extra FSI offered later goes to the kitty of homebuyers,” said Sampat

Source: https://www.hindustantimes.com/mumbai-news/developer-can-t-add-extra-floor-without-nod-of-buyers-maharashtra-real-estate-regulator/story-UUiwdRUYGzpeUkIphqooVN.html