Beware; Registration with RERA doesn’t mean the project is authentic……

The basic object of the Real Estate Act (REA) was to ensure accountability towards allottees, protect their interest, infuse transparency, ensure fair-play and reduce frauds & delays. However, it seems promoters and builders have decided to challenge the competence and power of the Real Estate Regulatory Authority ( RERA) established under REA.RERA also has seem to have succumbed to builders tactics or does n’t have enough infrastructure to verify the validity documents provided by Builders. As far as Maharashtra RERA ( MahaRERA) is concerned many builders have not provided authentic documents to it while registering their projects and MahaRERA also has not verified those. Even then many builders and promoters have successfully obtained registration certificate from MahaRERA.

Some Builders have either not uploaded their photo or uploaded such photo on MahaRERA website

Already Maharashtra RERA rules have been diluted and now builders are not providing authentic and full information and that that has caused a serious question of authenticity of projects even after they obtain the RERA registration. It is a different thing that after complaint MahaRERA may take action on defaulting builders but obtaining information from builders was difficult for consumers. That has not been made easy by REA in Maharashtra. Even after obtaining information, understating and analyzing it is the huge task. Then forget about complaining about it to the RERA.

The reasons may differ but various authorities in Maharashtra always refrain themselves from any accountability, causing serious damage to basic objectives of proactive Acts. Be it The Registration Act, The Right to Information Act, Maharashtra Right to Public Services Act or Maharashtra Land Revenue Code. MahaRERA seems to be no exception for that and reason is the builders and promoters don’t want REA to succeed and want their illegitimate right to cheat consumers intact.

Some builders and promoters have either not uploaded commencement certificates or approved building plants or uploaded such  documents on MahaRERA website

There may be the possibility that MahaRERA may not have adequate infrastructure to verify the authenticity of the documents that builders provide, but it is its responsibility ensure that all the documents required to be submitted under REA are provided. Many builders either have not provided mandatory information or have provided illegitimate, irrelevant or unreadable information. Even then they have received registration certificates. It is now the consumer’s duty to obtain the legitimate documents from MahaRERA,  analyse it and then lodge the complaint if any.

Some builders promoters have not uploaded building plans on MahaRERA website

As per REA builder promoter has to provide and publish

(a)    a brief details of his enterprise including its names and photographs of the promoter;

(b)    a brief detail of the projects launched by him, in the past five years details of cases pending, details of the type of land and payments pending;

(c)    an authenticated copy of the approvals and commencement certificate

(d)   the sanctioned plan, layout plan and specifications of the proposed project or the phase thereof, and the whole project as sanctioned by the competent authority;

(e)    the plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof including firefighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy;

(f)     the location details of the project, with clear demarcation of land dedicated for the project along with its boundaries including the latitude and longitude of the end points of the project;

(g)    proforma of the allotment letter, an agreement for sale, and the conveyance deed proposed to be signed with the allottees;

(h)    the number, type and the carpet area of apartments for sale in the project along with the area of the exclusive balcony or verandah areas and the exclusive open terrace areas apartment with the apartment, if any;

(i)      the number and areas of the garage for sale in the project;

(j)     the names and addresses of his real estate agents, if any, for the proposed project;

(k)    the names and addresses of the contractors, architect, structural engineer, if any and other persons concerned with the development of the proposed project;

However in Maharashtra Real Estate Rules promoters and builders have been exempted from publishing details provided under clauses (b), (e), (g), (h), (i) and (l). Taking full advantage of diluted rules and working of MahaRERA , promoters and builders have suppressed lot of vital information.

This is the expired stamp paper used for self-declaration, The information provided on this paper is also bogus

AS per REA for on-going projects three months period from the date of commencement of the Act for applying for registration. However, some promoter builders have taken this as an amnesty scheme to revive their dead projects. Some builders who have started their projects 15 – 20 years back and supposed to complete it before 2005 have now given a proposed date of completion of the project year 2022. That means the project if completed will take 22 years to complete.

This Project was supposed to be completed in the year 2005, commencement certificate was given  first 2001, Now proposed the date of completion is 2022

Every commencement certificate or plan have the limitation period. After expiry, these documents have to be re-validated. However, some builders have uploaded an expired document on MahaRERA website. As well,  as per REA builders, promoter builder builders have to provide and publish along with brief details of the projects launched by him, in the past five the payments pending. However hardly any builder has complied with it.

There are several other violations made by builders promoters while providing information to MahaRERA . Even then they have got registration certificates but that doesn’t mean the projects are authentic or they have all the required and legitimate documents to start or continue the project. Therefore it is now consumers’ duty to be alert. If you have any query on this subject please write to admin@vijaykumbhar.com

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The Maharashtra Real Estate Rules; Latest victim of Bureaucracy & Builder nexus

Builder bureaucrat nexus makes Maharashtra RERA Rules nightmare for home buyers

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The Maharashtra Real Estate Rules; Latest victim of Bureaucracy & Builder nexus

The Real Estate Act (REA) was brought to protect the interest of consumers in the real estate sector . However literary genius of mantralay have made mockery of it. Literary  genius  are those persons in Maharashtra mantralay who make mockery of good laws by cleverly drafting rules or issuing circulars without any authority. Earlier they did it with The Right to information act and The Right to Services Act. Now their latest victim is The Real Estate Act. The way rules of this act are drafted clearly indicate that these literary genius have acted as stooges of builder lobby.These rules give  an open licence for builders to strangulate innocent real estate consumers.Compared to other states only Maharashtra has given such discretionary powers to the builders.

For English Rules See Page No 89 to 152 

To protect the interest of consumers in the real estate sector the REA mandates the builders and Real Estate Regulatory Authority ( RERA) to publish certain information regarding credentials of builders and their projects on the website .However latest Maharashtra rules give discretionary powers to builder of what to publish and what not to publish.

Most the times  builder creates false picture of their project and cheat innocent flat buyers. To avoid this and to enable consumer to lodge his complaint , section 11 of REA mandates builders promoters  to create their web page on the website of the RERA and enter all details of the proposed project. These details include plan of proposed project, proforma of the allotment letter, agreement for sale, the conveyance deed proposed to be signed with the allottees, drinking water facilities, number, type and the carpet area of apartments for sale etc.As well, section 34 of REA mandated RERA  to publish and maintain a website of records, for public viewing, of all real estate projects for which registration has been given, with such details as may be prescribed, including information provided in the application for which registration has been granted. 

34. The functions of the Authority shall include— 

(b) to publish and maintain a website of records, for public viewing, of all real estate projects for which registration has been given, with such details as may be prescribed, including information provided in the application for which registration has been granted

However contrary to the basic Act clause 20  Maharashtra Real Estate Rules give extraordinary powers to the builders. It says RERA should publish only those things that builders allow them to publish.

20. Details to be published on the website regarding real estate projects.- (1) For the purpose of clause (b) of section 34, the Authority shall ensure that all the disclosures made by the promoters to the authority with regard to the Real Estate project for which registration has been given, shall be made available on its website, except for the following:

(i) Details provided under clauses (b), (e), (g), (h), (i) and (l) of sub-section (2) of

Section 4;

(ii) Details provided under sub-rule (2) of rule 3 of these Rules.

Clauses (b), (e), (g), (h), (i) and (l) of sub-section (2) of Section 4 cover following information

 (b) a brief detail of the projects launched by him, in the past five years, whether already completed or being developed, as the case may be, including the current status of the said projects, any delay in its completion, details of cases pending, details of type of land and payments pending; Prior registration of real estate project with Real Estate Regulatory Authority. Application for  registration of real estate projects.

(e) the plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof including fire fighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy;

(g) proforma of the allotment letter, agreement for sale, and the conveyance deed proposed to be signed with the allottees;

(h) the number, type and the carpet area of apartments for sale in the project along with the area of the exclusive balcony or veranda areas and the exclusive open terrace areas apartment with the apartment, if any;

(i) the number and areas of garage for sale in the project;

(l) a declaration, supported by an affidavit, which shall be signed by the promoter or any person authorized by the promoter, stating:—

(A) that he has a legal title to the land on which the development is proposed along with legally valid documents with authentication of such title, if such land is owned by another person;

(B) that the land is free from all encumbrances, or as the case may be details of the encumbrances on such land including any rights, title, interest or name of any party in or over such land along with details; 

(C) the time period within which he undertakes to complete the project or phase thereof, as the case may be; 

(D) that seventy per cent. of the amounts realized for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose: Provided that 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: Provided further that the amounts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project: Provided also that the promoter shall get his accounts audited within six months after the end of every financial year by a chartered accountant in practice, and shall produce a statement of accounts duly certified and signed by such chartered accountant and it shall be verified during the audit that the amounts collected for a particular project have been utilized for the project and the withdrawal has been in compliance with the proportion to the percentage of completion of the project. Explanation.— For the purpose of this clause, the term "schedule bank" means a bank included in the Second Scheduled to the Reserve Bank of India Act, 1934; 

(E) that he shall take all the pending approvals on time, from the competent authorities; 

(F) that he has furnished such other documents as may be prescribed by the rules or regulations made under this Act; and (m) such other information and documents as may be prescribed.

And Sub-rule (2) of rule 3 of these Rules cover following 

(a) Authenticated copy of the PAN card of the promoter;

(b) Name, photograph, contact details and address of the promoter if he is an individual or authorized representative; or the name, photograph, contact details and address of the chairman, partners, directors, as the case may be, and the authorized representative in case of other entities.

(c) A copy of the legal title report reflecting the flow of title of the owner or promoter to the land on which development is proposed, with authentication of such title by practicing advocate;

(d) Where the promoter is not the owner of the land on which development is proposed, a copy of the collaboration agreement, development agreement, joint development agreement or any other form of agreement, as the case may be, entered into between the promoter and such owner, reflecting the consent of the owner of the land and authenticated copies of legal title report reflecting the title of such owner, on the land proposed to be developed;

(e) The information relating to the encumbrances in respect of the land where the real estate project is proposed to be undertaken and the details regarding the proceedings which are sub-judice (if any) in respect of such land;

(f) (i) sanctioned plan where the project is being developed along with information relating to the FSI/ TDR and other entitlements which are proposed to be utilized in accordance with the relevant Development Control Regulations for the time being in force, for carrying out such sanctioned plan and the amenities and common facilities (including common areas, parking spaces) to be provided in accordance with the

sanctioned plan;

(ii) the Proposed Plan, Proposed Layout Plan of the whole project and Floor Space Index proposed to be consumed in the whole project, as proposed by the promoter;

(iii) proposed Floor Space Index to be consumed and sanctioned Floor Space Index. In case the sanctioned Floor Space Index is different than what is proposed to be consumed by the promoter, then the proposed Floor Space Index shall be disclosed at the time of registration and as and when the Floor Space Index is sanctioned, the same shall be uploaded on the website of the Authority by the promoter from time to time;

(iv) proposed Number of building(s) or wing(s) to be constructed and sanctioned number of the building(s) or wing(s). In case the sanctioned number of building(s) or wing(s) is different than what is proposed to be constructed by the promoter, then the proposed number of building(s) or wing(s) shall be disclosed at the time of registration and as and when the additional number of building(s) or wing(s) are sanctioned, the same shall be uploaded on the website of the Authority by the promoter from time to time;

(v) proposed number of floors in respect of each of the building or wing to be constructed and sanctioned number of floors in respect of each of the building or wing. In case the sanctioned number of floors is different than what is proposed to be constructed by the promoter, then the proposed number of floors shall be disclosed at the time of registration and as and when the additional number of floors are sanctioned, the same shall be uploaded on the website of the Authority by the

promoter from time to time;

(vi) Aggregate area in sq. meters of the recreation open space;

(vii) The number of covered parking spaces,

(g ) the particulars in respect of Architecture and Design Standards, Type of construction Technology, Earthquake Resistant Measures and the like to be adopted for Buildings and for Common Areas and of amenities / facilities in the Layout Plan of the real estate project;

(h) the nature of the organization of allottees to be constituted and to which the title of such land parcels is to be conveyed and the specific local laws to govern such organization of allottees on completion of real estate project;

(i) the promoter shall also provide such other information and documents, as may be required by the Authority under these rules or the regulations.

If all this information is excluded from publishing , what remains to publish? . And without this information how the consumer is supposed lodge his/her grievance or ask for the justice? .In the nutshell, builders wanted to  keep away consumers from the affairs of REA and  to keep it  the matter between RERA and them only. They have succeeded in it by making rules favorable to them only. 

Another major factor is, as per  REA where the area of land proposed to be developed does not exceed five hundred square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases are not supposed to be registered with RERA. However in Maharashtra rules the way registration fee has been described is quite confusing.It say "At the time of application for registration, the promoter shall pay a registration fee, calculated on the area of the land proposed to be developed at the rate of, rupees ten per square meter, subject to a minimum of rupees fifty thousand only and a maximum of rupees ten lakhs". What does that mean. Does that mean all the projects above  five thousand square meter only are to be register with RERA or even if project is of less than  five thousand square meter he has to pay fee of fifty thousand? .Rules are silent on whether project below five hundred square meter are to be registered with RERA or not. Like wise why the  projects between five hundred and five thousand square meter should bear additional burden of fees. There are thousands of projects fall in this category. (For project of one thousand square meter registration fee should be ten thousand rupees but because of minimum limit of fifty thousand he will have to bear additional burden of forty thousand rupees) contrary to that even if bigger projects like town ships that run in to more that hundred acres will pay much lower amount because of ceiling of ten lakh rupees.

Reduction in penalty charges for compounding of offences uder the act is another issue that builders managed to insert inthese rules

Even after Union housing minister Venkaiah Naidu’s warnings serious implications in case of any compromise with REA to the state governments, Government of Maharashtra  has diluted provisions of it. Naidu had also termed watering down of the legislation by states as anti-people. Now as the the new REA rules have come in to force only thing people of Maharashtra can do is to write to Venkaiah Naidu for immediate intervention or go to the court of law.

Related Stories

Builder bureaucrat nexus makes Maharashtra RERA Rules nightmare for home buyers

Literary geniuses of Mantralaya, a case of wasted talents

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Vijay Kumbhar

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No law in force to regulate and control real estate business in Maharashtra

Since central government has notified some provisions of Real Estate (Regulation and Development) Act, 2016 (REA) and repealed Maharashtra Real Estate (regulation and development) Act 2012  (MREA). Some people unnecessary creating confusion that though MREA as been repealed Maharashtra Ownership of Flats act (MOFA ) is still in force. But that is not true. And as MOFA stands repealed by Government of Maharashtra , centre has repealed MREA 2012 and as all the provisions REA 2016 have not been notified , time being there is no law to regulate and control real estate business is in force.

Photo courtsey hindustantimes.com

Even if for arguments sake we accept that Maharashtra government had not repealed MOFA. As per article 254 of the constitution of India, the parliament has all the powers to enact any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.Hence centre repealed MREA 2012. In case MOFA had been in force centre would have repealed it also.

Photo courtsey www.realtorindian.com

Centre didnt repeal MOFA because it was repealed with introduction MREA 2012 it self . In fact MREA 2012 was basically brought in to force because MOFA had failed  to give any relief to flat purchasers against sundry abuses, malpractices and difficulties related to the construction, sale, management and transfer of flats.

Central Government notification

Another argument to believe that MOFA was repealed was the Section 1 (3) of MREA 2012 and REA 2016 are the same. It says that the act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision. Maharashtra government had notified this section while central government has not notified it. That means with this notification itself all the provisions of MREA 2012 including repeal of MOFA had come into force. 

State Government notification

Now it seems that since at present there is no act to regulate and control real estate business in force,the  Government of Maharashtra is planing to designate somebody as RERA. However as The sections of REA2016 that the Centre has notified are related to establishment , incorporation , Composition of  The Real Estate Regulatory  Authority (RERA) , Term of office ,  Salary and allowances payable to Chairperson and Members only .And as it has not notified section related  Obligations, Functions and duties of promoters , Rights and duties of flat purchasers, Penalties for contravention of any section. Even if Government of Maharashtra  designate somebody as RERA it will not be of any use in absence of any regulatory or penalty powers .

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Hurdles in appointment of Real Estate Regulatory Authority in Maharashtra Removed

Any time after 1^st May 2016 the government of Maharashtra may establish Real Restate Regulatory Authority ( RERA )or delegate its power to somebody. On account of present controversy over Maple Groups misleading advertisements under Pradhanmantri awas Yojana ( PMAY) , FIR’s and further drama, it was alleged that presence of RERA would have made significant difference and timely intervention of RERA would have saved several peoples’ hard earned money. However, now with notification dated 27^th April 2016 hurdles in appointment of RERA or delegating it’s powers to somebody have been removed .

Photo courtsey www.thehindubusinessline.com

The Ministry of Housing and Urban Poverty Alleviation (MHUPA) of government of India has brought in to force some provisions of Real Estate ( Regulatortion nad Development )  Act 2016, 

( REA )   as well it has repealed The Maharashtra Housing (Regulation and Development) Act, 2012. The MHUPA has announced this with a notification dated 27 April 2016.With this notification MHUPA has brought some sections of the Real Estate Regulatory Act 2016   into force.

Section 81 read with Section 82 ( C ) Real Estate Regulatory Act empowers appropriate Government to delegate powers of RERA  to any authority  if circumstances exist which render it necessary in the public interest so to do. The MHUPA has brought in to force section 81 to 92 including following provisions of REA  from 1 may 2016.

Section 2 – Definitions, This section deals with the all the terms used in real estate sector

Section 20 to 39 – These sections deal with the Establishment and incorporation of Real Estate Regulatory Authority, Composition of Authority. Qualifications of Chairperson and Members of Authority. Term of office of Chairperson and Members. Salary and allowances payable to Chairperson and Members. Administrative powers of Chairperson. Removal of Chairperson and Members from office in certain circumstances. Restrictions on Chairperson or Members on employment after cessation of office

Section 41 to 58 – These sections deal with the Establishment of Central Advisory Council. Functions of Central Advisory Council. Establishment of Real Estate Appellate Tribunal.

Section 71 to 78 – These sections deal with Power to adjudicate. Factors to be taken into account by the adjudicating officer.

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Vijay Kumbhar

RTI Resource Person, RTI Columnist

Phone – 9923299199

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