FAQ-The Real Estate (Regulation and Development) Act, 2016 (RERA)

There remains confusion among most of the people regarding applicability of RERA Act on Ongoing projects and also with regard to power of state Govt to exclude such Ongoing project or to dilute some of the provisions of the Act in Favor of builders.

In this regard, I am attaching herewith some most frequently asked Question which I hope will be able to clarify many doubts. 

 

(1)       Is the Real Estate Act applicable to Ongoing/Existing Real Estate projects?

Yes, as per section 3(1) of the Act, ongoing / existing projects, which have not received completion certificate are covered under the Act. The said section is reproduced below:

“……Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act……”

Clarification: Completion Certificate (by whatever name called) means completion of entire project and not individual apartments.

(2)       From when is this Act expected to commence? Is there any specific date?

The RERA Act was assented to by the President of India on 25th March, 2016 and was notified in the Gazette of India for public information on 26th March, 2016. However, commencement of specific sections of the Act will be done in a step by step manner. First the sections regarding making of Rules and the establishment of the Authority and the Tribunal will be notified. After that the sections regarding duties and responsibilities of all the stakeholders will be notified. The entire process will take around 12/18 months.

(3)       Does this Act need consent / ratification from State Governments to be applicable in states?

No, as RERA is not a Constitutional Amendment Act affecting the States, no consent / ratification, by whatever name called is required. States are bound to implement the Act according to the timelines provided therein.

(4)       Can State Governments change / alter any section of this Act to favour Builders in their State even by passing motion in respective Legislative Assemblies?

No, the State Governments cannot make any modification, deletion, alteration etc. of any of the provisions of the RERA Act. They have to implement all the 92 sections of the Act.

(5)       Most of states have their own Apartment Ownership Act. What is the scenario, in case there is clash / differences between RERA and State Apartment Ownership Act?

First and foremost, Apartment Ownership Act have a different jurisdiction. They come into operation after the handing over of possession and is aimed at managing the associations of buyers in regard to matters like maintenance of common areas, elections, monthly charges etc.

However, if by any chance there is any conflict between a State law and RERA, RERA provisions will prevail. The Constitution is very clear on this issue, as RERA is a Central law.

Comments   

 
0 #2 Anil Sahni 2016-08-28 17:33
HUDA (Haryana Urban Development Authority) had announced an Affordable Housing Scheme in 2014. Most builders, under the scheme, allotted flats to applicants against an advertisement, between July and December 2015. The time for completion, on each project, is four years.

HUDA, as per scheme, can forfeit the bank guarantee submitted by developer, apart from withdrawal of some concessions in EDC, in case of delay in completion of project, but there is no provision for payment of interest to buyer.

Now, as the projects shall be completing in the second half of 2019 or later and Haryana State Regulator will also be appointed by then, will these projects be also covered under RERA and the buyers be allowed interest for delay in completion of project at the same rate as allowed to Developer i.e. 15% per annum?

 
 
0 #1 Pranay 2016-05-17 11:58
Thank you Abhay for a very informative article and i think this will definitely be a very good thing for home buyers and will go a long way in regulating the industry. I was reading a lot on this subject and in another blog (https://www.easylaw.in/documents/highlights-of-real-estate-regulation-and-developmen) i was a bit confused, cause it is not clear if projects under construction (where lot of buyers are facing issues like delays, etc) will also be covered by these new laws?

 

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