Applicability of RERA Act: Can a RERA complaint be filed against an unregistered Project or Agent? 

Last Updated at: January 09, 2020
581

The delay in possession and undue cancellation of promised projects have plagued the real estate industry, and have been a primary concern for potential buyers in the last few years. With projects that may get delayed for over five years, the buyer is left in a very precarious and hopeless position, as the dream of owning a house slowly turns to dust for them. The absence of a mediator, specific rules, swift justice and large corporations on the opposite side, the equation between the buyer and the builder has been very one-sided for a long time. That was, until the emergence of RERA. 

Here’s a look at the instances/cases under which RERA is applicable and how buyers can get justice.

The government came out with the Real Estate Regulation and Development Act, 2016 as a means to stop builders from taking advantage of the loopholes in the older system. But this isn’t to say that the RERA is foolproof. While there are certain misgivings in the Act, state authorities are doing all they can to add more teeth to the rules and make them more beneficial to buyers. As per a recent statement by the Minister of Housing, Hardeep Singh Puri, all projects will fall under the Act as soon as the infrastructure required to adjudicate that many cases become available. This could mean that the applicability of the Act will further extend, helping bring under its cover, all types of real estate projects.

Maharashtra RERA Laws

Here are a few cases as per the Maharashtra RERA council, wherein the Act has been modified.

Small projects 

The Maharashtra Tribunal has decided that projects which have a size of less than 500 sq meters or consists of an apartment with fewer than eight flats do not need to register themselves under the Act. This ruling exempted Geetanjali Aman Constructions from registering or having to pay a fine of Rs 30 lakh.

Covers long-term leases

The Bombay High Court ruled that the Act would extend not just to newly completed or undertaken buildings, but also to long-term leases. Hence, delays in possessions for flats which were booked as per a 999-year lease would also come under the provisions of the MAHARERA Act. Not including such arrangements in the law would jeopardise the entire purpose of the Act, as such leases qualify as a buying of property.

Get Your Property Registered

Complaints against unregistered projects

As per ruling by the Bombay High Court, the Maharashtra RERA will enable buyers to file claims against property developers who have not registered themselves under the Act. This also extends to buildings which have not been registered under RERA even if the agent is a registered one. Such complaints will, however, require the payment of a fee amounting to INR 5000, which may be filed via a form from the Source Information category.

Occupancy certificate

The MAHARERA has also made it mandatory for all developers to provide occupancy certificates within three months of possessions. Failure to provide the document will result in a fine which follows an interest-based system, which the developer must pay all the residents. As Mumbai is a sprawling city with over 10,000 apartments without Occupancy certificates, this ruling will help bring order to the prevalent system.

Force majeure

As per a ruling by the MAHARERA, developers can no longer use the force majeure clause as an excuse for not having the right approvals or for financial crises. Force majeure means unforeseen circumstances that prevent someone from fulfilling a contract. This order came into play in a case which was filed against Lavasa Corporation. The developer had promised buyers that the apartment would be ready for occupation by April 2014 and had taken the payment for it in 2010. Failure to do was blamed on a ruling by the environment ministry. The MAHARERA then went on to order the developer to refund the buyer his or her principal and also pay a fine of 10.65 % interest.

Past projects

The Haryana RERA had ruled that the RERA Act would be applicable to projects which had begun construction before the Bill was passed but finished its development after the law came into force. This gave the RERA the right to adjudicate disputes between the buyer and developer on any project, even ones which began and were completed before the implementation of the Act. The Bench called on Section 11 of the Act which mentions that promoters have to fulfil their promises, as it does not bar plans not listed under RERA. Also, as per Section 34 (f), RERA must ensure that all developers fulfil their obligations to the stakeholders.

Other moves taken by various state authorities such as the inclusion of housing societies as promoters, payment after completion of the project and the removal of developers from a project due to delays have helped buyers find justice easily. As is visible through the examples mentioned above, while the law explicitly does not say that it extends to unregistered projects and agents, several State authorities are extending the Act to such cases, as it does not specifically exclude them either. Hence, it is a legal grey area that State bodies need to set straight in the future for the benefit of the real estate sector.

Rera

Applicability of RERA Act: Can a RERA complaint be filed against an unregistered Project or Agent? 

581

The delay in possession and undue cancellation of promised projects have plagued the real estate industry, and have been a primary concern for potential buyers in the last few years. With projects that may get delayed for over five years, the buyer is left in a very precarious and hopeless position, as the dream of owning a house slowly turns to dust for them. The absence of a mediator, specific rules, swift justice and large corporations on the opposite side, the equation between the buyer and the builder has been very one-sided for a long time. That was, until the emergence of RERA. 

Here’s a look at the instances/cases under which RERA is applicable and how buyers can get justice.

The government came out with the Real Estate Regulation and Development Act, 2016 as a means to stop builders from taking advantage of the loopholes in the older system. But this isn’t to say that the RERA is foolproof. While there are certain misgivings in the Act, state authorities are doing all they can to add more teeth to the rules and make them more beneficial to buyers. As per a recent statement by the Minister of Housing, Hardeep Singh Puri, all projects will fall under the Act as soon as the infrastructure required to adjudicate that many cases become available. This could mean that the applicability of the Act will further extend, helping bring under its cover, all types of real estate projects.

Maharashtra RERA Laws

Here are a few cases as per the Maharashtra RERA council, wherein the Act has been modified.

Small projects 

The Maharashtra Tribunal has decided that projects which have a size of less than 500 sq meters or consists of an apartment with fewer than eight flats do not need to register themselves under the Act. This ruling exempted Geetanjali Aman Constructions from registering or having to pay a fine of Rs 30 lakh.

Covers long-term leases

The Bombay High Court ruled that the Act would extend not just to newly completed or undertaken buildings, but also to long-term leases. Hence, delays in possessions for flats which were booked as per a 999-year lease would also come under the provisions of the MAHARERA Act. Not including such arrangements in the law would jeopardise the entire purpose of the Act, as such leases qualify as a buying of property.

Get Your Property Registered

Complaints against unregistered projects

As per ruling by the Bombay High Court, the Maharashtra RERA will enable buyers to file claims against property developers who have not registered themselves under the Act. This also extends to buildings which have not been registered under RERA even if the agent is a registered one. Such complaints will, however, require the payment of a fee amounting to INR 5000, which may be filed via a form from the Source Information category.

Occupancy certificate

The MAHARERA has also made it mandatory for all developers to provide occupancy certificates within three months of possessions. Failure to provide the document will result in a fine which follows an interest-based system, which the developer must pay all the residents. As Mumbai is a sprawling city with over 10,000 apartments without Occupancy certificates, this ruling will help bring order to the prevalent system.

Force majeure

As per a ruling by the MAHARERA, developers can no longer use the force majeure clause as an excuse for not having the right approvals or for financial crises. Force majeure means unforeseen circumstances that prevent someone from fulfilling a contract. This order came into play in a case which was filed against Lavasa Corporation. The developer had promised buyers that the apartment would be ready for occupation by April 2014 and had taken the payment for it in 2010. Failure to do was blamed on a ruling by the environment ministry. The MAHARERA then went on to order the developer to refund the buyer his or her principal and also pay a fine of 10.65 % interest.

Past projects

The Haryana RERA had ruled that the RERA Act would be applicable to projects which had begun construction before the Bill was passed but finished its development after the law came into force. This gave the RERA the right to adjudicate disputes between the buyer and developer on any project, even ones which began and were completed before the implementation of the Act. The Bench called on Section 11 of the Act which mentions that promoters have to fulfil their promises, as it does not bar plans not listed under RERA. Also, as per Section 34 (f), RERA must ensure that all developers fulfil their obligations to the stakeholders.

Other moves taken by various state authorities such as the inclusion of housing societies as promoters, payment after completion of the project and the removal of developers from a project due to delays have helped buyers find justice easily. As is visible through the examples mentioned above, while the law explicitly does not say that it extends to unregistered projects and agents, several State authorities are extending the Act to such cases, as it does not specifically exclude them either. Hence, it is a legal grey area that State bodies need to set straight in the future for the benefit of the real estate sector.

Rera

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