Real Estate Bill

The Real Estate (Regulation and

Development) Act, 2016

2

Basic Amenities To Lead Peaceful Life

Food

Clothing

Shelter

Presented by CA. Neha Sethi

Presented by CA. Neha Sethi 3

Need Of Real Estate Sector

UrbanisationPrivatisationEmploy

ment & Developme

nt

Minimum Cost

Shelter


Expectations of Consumers from Developer and Government

Develope

r

Government

5Presented by CA. Neha Sethi

Is the location good with adequate urban Infrastructure? Does the developer

have clear land title?

Have all statutory planning and building approvals been received?

contracts neutral and not one-sided?

What is the actual carpet area that I can use?

How can I know the status of the project and approvals to estimate when construction may get completed?

Is the construction quality and specification as promised/shown in the apartment brochure?

Who do I approach for delays and un-kept promises by developers?

Has the property received the completion certificate after necessary inspections?

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The Real Estate (Regulatory and Development) Act, 2016

Bill First Introduced in Rajya Sabha in 2013. Rajya Sabha Passed Bill on 10.03.2016 Parliament Passed Bill on 16.03.2016 Received accent of President on 25.03.2016 Bill published in Official Gazette on 26.03.2016 Come into force from the date to be notified.


Contents of Act

The Real Estate Act,2016

92 Sections10 Chapters


Chapters:1. Preliminary (Section 1-2)2. Registration of Real Estate Project and Agents (3-10)3. Functions and Duties of Promoter(11-18)4. Rights and Duties of Allottees (19)5. Real Estate Regulatory Authority (20-40)6. Central Advisory Council (41-42)7. Appellate Tribunal (43-58)8. Offences, Penalties and Adjudication (59-72)9. Finance, Accounts, Audits and Reports (73-78)10. Miscellaneous (79-92)


Section 2:- Definition Clause (k) Carpet Area:-

Carpet Area means the net usable floor area of an apartment, excluding the area covered by the external walls, area under services shafts, exclusively balcony or veranda area and exclusive open terrace area, but includes the area covered by internal partition walls of the apartment;

Explanation: For the purpose of this clause, the expression “exclusively balcony or verandah area” means the area of the balcony or verandah, as the case may be, which is appurtenant to the net usable floor area of an apartment, meant for the exclusive use of allottee, and “exclusive open terrace area” means the area of open terrace which is appurtenant to the net usable floor area of an apartment to the net usable floor area of an apartment, meant for the exclusive use of the allotee.


(n) Common Area Entire Land Stair Case, Lifts, Lift lobbies, Fire Escapes, Common Entrance and Exits Common Basement, Terrace, parks, play area, open parking area and

common storage space Place for the employees such as watch man, ward staff or community

service personnel Installation of central services such as electricity, gas, water, sanitation and

air conditioning, water conservation and renewable energy Water tanks, sumps motors, fans, compressors, ducts and other installations Community and commercial facilities as provided in real estate project Other portion of the project for safety maintenance and in common use.


(Zk) Promoter

Person who constructs buildingConverts existing building into apartmentsDevelops land into project

Development authority or any public body Apex state level co-operative housing society Any other personExplanation: Developer and seller are different

person for the same project then both shall be deemed to be developer.


(Zn) Real Estate Agent

Any person Negotiates or acts on behalf of one person in a transaction to t/f his plot, apartment,

building to another person Receives remuneration fees or commission Includes property dealers, brokers,

middlemen


Sec. 3 (1):- Prior Registration of Real Estate Project with Real estate Regulatory Authority

Registration of Real estate Project With Real Estate regulatory Authority

(ongoing projects should be registered within 3 months of commencement of this act)

Provided further that if the Authority thinks necessary, in the interest of allottees, for projects which are developed beyond the planning area but with the requisite permission of the local authority, it may, by order, direct the promoter of such project to register with the Authority, and the provisions of this Act or the rules and regulations made there under, shall apply to such projects from that stage of registration


Sec. 3(2) No registration required

If area of proposed land less than 500 Sq. Mtr. Or no. of apartments less than 8 including all phases. (appropriate govt. can reduce the said limit)

If completion certificate received by the promoter before commencement of act

Those renovation, repair or re development which does not involve marketing, advertising, selling or new allotment

Explanation:- if project to be developed into phases then every phase to be treated as separate project and requires separate registration.


Sec. 4 Application for registration of Real Estate Project

1. Application in such manner as may be prescribed with such fees2. Documents to be attached Name and constitution of enterprise Details of projects launched in past 5 years whether in process or completed

Including current status of project , any delay, pending details of type of land and pending payments pending

Approval and commencement certificate from competent authority Sanctioned plan, layout plan and specification of project as may be sanctioned Plan of development, work execution and facilities to be provided like water

sanitary electricity and security Location details of the project with its boundaries including latitude and longitude Performa of the allotment letter, agreement for sale and conveyance deed Number type and carpet area of apartments with exclusive area of balcony and

verandah Number of garages Name and address of real estate agent Name and address of contractor engineer and architect


Cntd….. Declaration stating Legal title with legally valid documents Free from encumbrances, details of encumbrances if any in

regard to rights, title, interest or name of any party Time period undertaken for completion of project Separate bank account in scheduled bank for funds realized from

real estate project (at least70% to be deposited) to cover cost of project and should be exclusively used for such purpose

Amount to be withdrawn from bank in proportion to cost of completion, certification required for percentage ascertainment

Promoter shall get his accounts audited within 6 months from end of FY form CA, and produce such statements

Verification that funds realized from a particular project has been utilized in such particular project

Web online system for submitting registration application


• In case of Force majeure registration can be extended for 1 year by authority (Sec. 6)

•Force majeure means a case of war, flood, drought, fire, cyclone, earth quake or any other natural calamity


Sec. 7 Revocation of RegistrationRegistration can be revoked on following grounds:- Complaint, suomotu, recommendation of competent authority1. Default in doing any act required by act2. Violation of terms and conditions of competent authority3. Unfair practices or irregularities 30 days notice before revocation of registration to promoter’ Terms and conditions can be imposed in interest of allottes instead of revoking RC. Upon revocation of registration name of promoter shall be displayed in defaulter list on

website with photograph, information to other state and union territories, freeze the bank account and directions can be issued]

Remaining work shall be carried out in accordance with sec. 8 and de-freezing of account so as to carry out remaining work

Unfair practice means:-• Representation of false grade• Promoter has affiliation with such other promoter does not have• False or misleading representation of services• Wrong advertisement with false facts• Fardulant practices


Sec. 8 Obligation of Authority on revocation of registration

After consultation with appropriate government the project shall be completed by the competent authority or association of allottes.

No direction or decision shall be taken for remaining work until the matter is in appeal

Upon revocation of registration association of allottes shall have right to refuse to carry out the remaining development.


Sec. 9 Registration of Real Estate Agents

No sale, agreement, purchase shall be effected by agents of the registered projects unless obtaining registration under the act

Make application to the authority for registration Single registration for entire state or union Application can be rejected for the reasons to be recorded in

writing (Opportunity of being heard to be provided to the applicant)

Deemed registration if no communication within specified time Registration number to be quoted on every sale facilitated by him Renewable registration Registration can be revoked or suspended if obtained with false

representation of facts


Sec. 10 Functions of Real estate Agents

Sale of Registered

Projects

Maintenance of Books of Accounts

Not to involve in Unfair Trade

Practices

Such other functions as may

be prescribed

Facilitate all information and

documents of title


Sec. 11 Functions and Duties of Promoter

Webpage •Registration•Quarterly up to date list of number & type of apartments, no. of garages booked, approval taken and pending, status of project

Advertisement•Contain website address•Registration number•True particulars of project

Make available information to allottee •Sanctioned Plan Layout, specifications•Stage wise completion Schedule


Responsible for

• Obligations responsibilities from agreement to conveyance deed

• Obtaining completion certificate• Lease certificate where project is developed on lease

hold land

Responsible for

• Providing and maintaining essential services on reasonable charges till taking over of maintenance of project by association of allottees

• Enable formation of society or association or co operative society(shall be formed within 3 months where majority of plot apartment or building have been booked)

Execution and payment•Registered Conveyance deed in favor of allottee•Pay all outgoings until transfer of physical possession•Shall be liable to pay even after t/f of possession•After agreement no mortgage on such land,•Promoter may cancel agreement as per terms of agreement•If not as per terms allottee can go to authority for relief


If advance received by promoter on the basis of false information in advertisement or prospectus then, allottee shall be compensated by the promoter and whole investment shall be returned with interest (Sec. 12)

Upto 10% of Cost of apartment can be accepted by promoter from allottee without entering into agreement (Sec. 13)


Sec. 14 Adherence to Sanctioned plans and projects

Development and completion as per sanctioned plan No changes, alteration or additions permitted after

sanctioned plan disclosed to buyer (only such minor changes permitted as specified by allottee or which are necessary for architectural or structural reasons duly recommended and verified by authorized architect after proper intimation to allottee)

Changes can be made if 2/3rd allottees agree for such change After handing over possession to allottees promoter shall be

liable for 5 years, for any defect in quality or workmanship and further it has to be rectified within 30 days of bringing to the notice of promoter

If not rectified then allottees shall be entitle to receive compensation


Sec. 15 Obligation of promoter if Real estate Project t/fd to third party

For transfer of real estate project to third party consent of :-

• 2/3rd Allottees• Written approval of Authority

Intending promoter shall comply with all the obligations & responsibilities as defined in agreement of sale

• No delay shall be permitted to Intending Promoter to complete real estate project


Sec. 16 Obligation of Promoter Regarding Insurance of Real Estate Project

.Obtain all such insurance as may be notified by the appropriate govt. but not limited to title of land and construction of Real Estate Project

.Pay premium and other charges before transferring such insurance in favor of association of allottees

.Insurance will stand transferred at the time of agreement of sale and all the documents shall be handed over to association of allottees.


Conveyance deed to be executed within 3 months of obtaining Occupancy Certificate and all the documents to be handed over to allottee. (Sec. 17)

Sec. 18 Return of Amount and Compensation

•Allottee wishes to withdraw then whole amount plus interest•Does not withdraw then interest for every month of delay upto completion

Fails to complete

•Compensate the allottees if any loss caused due to defect title

Compensate Allottee

•Fails to comply then liable for compensation to allottee

Obligation under this act or rules


Sec. 19 Rights and Duties of Allottees

Information relating to sanctioned Plan

Know Stage Wise Completion

including basic amenities

Claim possession of area as

specified in agreement

Entitled for interest and compensation if

promoter does not comply with plans

Entitled to have necessary documents

Timely payment of installments and

other maintenance charges

Liable to pay interest on late payment of

installment or other charges

Interest liability may be reduced by mutual discussion between promoter

and allottee

Physical possession within 2 months of

occupancy certificate and participate in

Association or society


Sec. 43 to 58 Appellate Tribunal

Established within one year of commencement of Act•One or more Benches•Appropriate govt. of two or more state or union if deem fit establish one tribunal

Security to be deposited for filing of appeal by promoter•At lest 30% of penalty or such higher percentage•Or the total amount to be paid including interest and compensation to allotee

Following eligible to file appeal•Appropriate Government•Competent Authority•Any person aggrieved by order of Authority•Adjudication Officer


Time Limit for Filing Appeal

Appeal to high Court Within 60 days of receiving of order of AT(Delay may be condoned if supported by sufficient cause


Composition of Real Estate Appellate Tribunal

Chair person- High Court Judge

- Term 5 years- Age upto 67 years

Judicial Member- 15 Years Experience

-Term 5 Years- Age upto 65 Years

Technical Or Administrative Member- 20 Years Experience of Urban development

or Real Estate Sector and many more- Term 5 Years

-Age upto 65 Years


Powers of Appellate Tribunal

-Guided by principle of Natural Justice- Regulate own

Procedure-Not to be bound by rules of evidence as

provided in Evidence Act

Same powers as vested in CPC, 1908

- Summoning & enforcing Attendance

-Discovery & Production of A/cs and documents

-Review Decision-Ex-parte Order

-Commissioning and examining Witness or

documents-Receive evidence on

Affidavit

Will be deemed as judicial proceedings as of Sec. 193, 219 & 228 for purpose of Sec. 196 of

IPC

Will be deemed as Civil Court as u/s 195 of CrPC

1973.


Right to Legal Representation

CS CA

CMA Legal Practitioner


Offence & Penalties for Promoters Failure to Register (Sale without registration) :- Fine upto 10% of project Cost. Failure to compile with orders passed by RERA :- Imprisonment of 3 Year and/

Or Fine upto 10% of Project Cost. False Declaration about Project/ Promoters:- Fine upto 5% of project cost.

Offence & Penalties for Real Estate Agent Failure to Register :- Fine upto 5% of unit cost sold and / or imprisonment of

1 Year Selling of Unregistered Project :- Fine upto 5% of unit cost sold and/ or

imprisonment of 1 year

Offence & Penalties for Allottee’s / Customer Failure to compile with orders passed by RERA :- Fine upto 5% of Unit cost

sold and/ or Imprisonment of 1 year Deliberate Purchase in Unregistered Project :- Fine upto 5% of Unit cost sold

and/ or Imprisonment of 1 year

Offences and Penalties


Sec. 73 to 78 Finance, Accounts, Audit, and reports

CG may grant loans after appropriations by Parliament


Maintain budget and proper accounts Audit by C&AG Preparation of annual report containing

description of activities, annual accounts and work programs

Present before legislative authority


Thanks & Regards

Presented By:-CA. Neha SethiEmail: [email protected]

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