Rera act 2016 ppt

Real Estate (Regulation And Development )Act, 2016.

Manoj Pandit

Advocate

(c) M & P Management Consultants Pvt. Ltd.

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RERA ACT, 2016

Present Discussion - RERA Act, 2016

Liabilities, Penalties, Prosecution & Appeals.

Opportunities for Chartered Accountants.

Current Practices v/s Proposed Practices.

Registration of Real Estate Agents / Brokers.


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RERA ACT, 2016

Present Discussion - RERA Act, 2016

Liabilities, Penalties, Prosecution & Appeals.

The RERA Act, 2016 lays downs obligations on Promoters, Allottees and RealEstate Agents and also provides for consequences for defaults by way ofpenalty, fine and imprisonment for contravening those provisions by them.

Chapter VIII of the act containing Sections from 59 to 70 deals with suchprovisions.


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Penalties under RERA Act, 2016


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Penalty for a promoter

OFFENCE PENALTY

Contravention of the provisionsof Section 3 i.e.., making anyinvitation for sale without gettingthe project registered with RERA(Section 59)

Penalty up to 10% of estimatedcost of the project.For the continued defaultimprisonment up to three yearsor with further fine up to 10% ofthe cost , or with both

Contravention of Section 4 i.e..,failure to make application forregistration, submitting falseinformation, failure to keep 70%in separate bank account etc.(Section 60)

Penalty up to 5% of theestimated project cost



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OFFENCE PENALTY

Contravention of any otherprovision of theAct/Rules/Regulations(Section 61)

Penalty up to 5% of the estimatedproject cost

Failure to comply with thedirections/orders of theRegulatory Authority(Section 63)

Penalty for every day of thedefault which can cumulativelygo up to 5% of the estimatedproject cost

Failure to comply with the orders,decisions of the AppellateTribunal(Section 64)

Imprisonment up to three yearsor with fine for every day ofdefault which can cumulativelygo up to 10% of the estimatedcost of the project, or with both.



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Penalty for an agent

OFFENCE PENALTY

Failure to comply with order ordirection of the Authority(Section 65)

Penalty for every day of defaultwhich can cumulatively go up to5% of the estimated cost of thebuilding/ apartment or plot

Failure to comply with order ordirection of the Tribunal(Section 66)

Punishment with imprisonment upto one year or with fine for eachday of default which cancumulatively go up to 10% of thecost of the building/ apartment orplot, or with both



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Penalty for Allottees

OFFENCE PENALTY

Failure to comply with orders ofthe Authority(Section 67)

Penalty per day of the defaultwhich can cumulatively go up to5% of the cost of building/plot orapartment

Failure to comply with decision ororders of the Tribunal(Section 68)

Punishment of imprisonment up toone year or with fine for each dayof default cumulatively going upto 10% of the cost of building/apartment or plot, or with both.

APPEALS


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The Act stipulates that questions that come before the RERA must bedealt with “as expeditiously as possible” and must be disposed within60 (sixty) days from the date of receipt of the concerned application(with reasons to be recorded in writing, if disposal does not occurwithin the said period). Appeals from the directions of the RERA lie tothe Appellate Tribunal and such appeals must also be dealt withexpeditiously, though it is sufficient if the Tribunal “endeavors” todispose of the appeal within 60 (sixty) days of the date of receipt ofthe appeal.

APPEALS


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Aggrieved party

Authority or adjudicating

officer

Direction

Order

RE Appellate tribunal

Within 60 days from the copy of order/D

High Court

Required to adjudicate caseswithin 60 days from date ofreceipt of application & if notpossible record reasons

Within 60 days from the copy of order/D

In respect of matters pending before Consumer Courts, the appellants have the option to withdraw such complaint and file an application before the adjudicating officerPre Deposit at REAT Level:For promoters30% of penalty or 100% of interest

& compensation to the allottees

APPEALS


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Appeals to be heard by Real Estate Appellate Tribunal

Any person aggrieved by any direction or decision or order made by the Authority or by an adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal within a period of sixty days from the date of the order. The Appellate Tribunal may entertain any appeal after the expiry of sixty days if it is satisfied that there was sufficient cause for not filling it within that period.

While filing the appeal, the promoter has an obligation to deposit at least thirty per cent of the penalty, or such higher percentage as may be determined by the Appellate Tribunal, or the total amount to be paid to the allottee, including interest and compensation imposed on him, if any, or with both, before the said appeal is heard.

APPEALS


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The Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 but shall be guided by the principles of natural justice.

The Appellate Tribunal shall also not be bound by the rules of evidence contained in the Indian Evidence Act, 1872.

Every order made by the Appellate Tribunal under this Act shall be executable by the Appellate Tribunal as a decree of civil court, and for this purpose, the Appellate Tribunal shall have all the powers of a civil court.

APPEALS


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APPEAL TO HIGH COURT

Any person aggrieved by any decision or order of the Appellate Tribunal, may, file an appeal to the High Court, within a period of sixty days from the date of communication of the decision or order of the Appellate Tribunal, to him, on any one or more of the grounds specified in section 100 of the Code of Civil Procedure, 1908.

Respontunity for CA under RERA


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It shall be the responsibility of the Chartered Accountant to provide Certificates/Letters/NOC’s as required from time to time during various stages of construction of the project and shall be given to the promoter without any delay and/or within 7 days on request of the promoter.

The Chartered Accountant shall give various Certificates/Letters as per prescribed forms under RERA act, rules and regulations there under or as per any other Law for time being in force.

The Chartered Accountant shall make himself aware of the RERA act, rules and regulations and shall perform all his duties prescribed under the said act, rules and regulations within the time period stipulated.

The Chartered Accountant shall furnish and submit all Certificates, Audit reports and any other papers as required to be submitted by the Real Estate Regulatory Authority.



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Key Role of CA in RERA

Registration of RE projects with RERA

Pre-withdrawal Certification

Based on PoC

Representation Services

before AT or RERA authority

Accounts Audited



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Amounts from the separate account maintained for deposit of amountsreceived from allottees shall be withdrawn by the promoter after it is certifiedby an engineer , an architect and chartered accountant in practice that thewithdrawal is in proportion to the percentage of completion of the project.

The promoter shall get his accounts audited within six months after the endof every financial year by a chartered accountant in practice, and shallproduce a statement of accounts duly certified and signed by such CA. Duringthe audit it shall be verified that the amounts collected for a particularproject have been utilized for the project and the withdrawal has been incompliance with the proportion to the percentage of completion of theproject.

Opportunities for CA Under RERA


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Chartered Accountants can be appointed as legal representative before the Appellate Tribunal or the Regulatory Authority.

Can be appointed as member of Central Advisory Council, Chairperson or member of RERA, Technical Member of Real Estate Appellate Tribunal

Opportunities for CA Under RERA


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Secondary role of a CA

Application for Registration of real estate project ---

Application shall be made in prescribed form with the prescribed fee and shall include details of promoters, projects launched in past five years, approval letters/certificates to commence project, lay out plan, allotment letter, agreement for sale proforma, garage , declaration to legal title etc.

Registration of real estate agents --- No real estate agent shall be able to facilitate the sale or purchase in a real estate project registered without obtaining registration under new Act. The registration shall be given by the Authority for the entire State/ Union Territory.

Current Practice(MOFA) Vs Proposed New Practice (RERA)


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SN Salient Issues Provision in MOFA, 1963 Provision in RERA, 2016

1 Sale of parking Not permissible Only covered car parkingspace / Garages includingmechanical car parks

2 Carpet area Balcony included and net usable area was permissible

Includes:- Area covered bythe internal walls of theapartmentExcludes:- Area covered bythe external walls, exclusivebalconies, verandah areas,service shafts and terracesnot included. 3% toleranceallowed. Compulsory re-measurement of flat at thetime of possession



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3 Before execution of agreement

Not to exceed 20% Not to exceed 10%

4 Proportionate charging of common areas

Chargeable Chargeable

5 Deemed conveyance

Applicable within Six months of notice.

Applicable within threemonths of completioncertificate of real estateproject if date has not beenspecified in the agreement tosale

6 Defects period 3 years 5 years



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7 Refund of money only if delay for possession then refund of money with interest to the buyer

Simple interest @ 9% p.a. from the date Sums are received.

Simple interest @ 2% + prevailing MCLR rate of the State Bank of India from the date sums are received.

8 Formation of society As soon as minimum number of persons (60%) require to take flats. Within 4 months of 60% occupation.

Within 3 months of date of 51% of allotees that have booked their apartments



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9 Conveyance If no period mention within 4 months of formation of society.

If no period mentioned then forsingle building within 3 monthsof issue of occupationcertificate or 51% of totalnumber of allotees in thebuilding / wing having paid fullconsideration whichever isearlier. In case an apex bodyhas to be formed if no date isagreed upon the 3 months fromthe completion of the last Bldg.



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SN Salient Issues Provision in MOFA,1963

Provision in RERA, 2016

10 Extension oftime for deliveryof flat

i. Non availability ofsteel, cement, otherbuilding, water orelectric supply.

ii. War, civil commotionor act of God.

iii. Any notice, order,rule, notification, ofthe governmentand/or other publicor competentauthority.

i. War, civil commotion oract of God.

ii. Any notice, order, rule,notification, of thegovernment and/orother public orcompetent authority.

iii. Excludes period ofregistration where actualconstruction not carriedby promoter due tospecific stay, injunctionorder to the project by



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Note-the provisions of this proviso are not mandatory but negotiable.

any court of law, tribunal, competent authority, statutory authority, high power committee etc. or due to other mitigating circumstances as decided by the RERA authority.iv. If authority is convinced that due to no fault of the promoter there has been a delay he can get extension for the registration of the project



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11 Payment terms Very stringent/Not practicaltherefore no developersused to follow.

Liberal and practical forpromoter and allotees

12 Escalation Increase in local taxes,water charges, insuranceand such other levies, ifany, imposed localauthority/govt.

Escalation free except dutyincrease in account ofdevelopment charges/ chargesto authority.

13 Share of outgoings In proportion to floor areaof flat

Proportion to carpet area.



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14 All receipts Mentions maintain aseparate account.

70% to be maintained withdesignated account and to bewithdrawn as per progress ofconstruction.

15 Project potential Till conveyance/ societyformation any FSI increasewould belong to developer

Disclosure to be made aboutexpectation of FSI proposed tobe utilized includingexpectation of future FSI orelse consent of 2/3 rd allotteesrequired

16 Interest Developer’s discretion M.C.L.R. plus 2% of SBI BankRate.



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17 Termination Developer was entitled to terminate after notice on default of payment

Promoter entitled to terminate after 3 installments not paid and notices given. Refund must be made within 30 days.

18 Specification of materials

Generic declaration would suffice

To mention brand, or price of product (if unbranded).

19 Registration of project

Not required Compulsory before any advertisement or receipt of payment



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20 Insurance Of building Of building and title

21 Disclosure To be available on site On the site and website

22 Title Liability Up to conveyance is done Liability in perpetuity

23 Offences & Penalties

Imprisonment and nominal files were prescribed

Heavy fine linked with up to 10% of estimated project cost and imprisonment only if directions of authority not followed for both developers as well as allottees.



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24 Consent to change sanctioned plans

Consent not required unless individual unit is affected.

Consent of 2/3 alloteesrequired for making any major modification in sanctioned plans or revised plans.

25 Development of project and amenities

Phase wise development not mentioned

Detailed phase wise development permitted along with different date of possessions for apartment and amenities



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26 Unfinished project No provision of take over Authority with approval of state government may allow development of project by any other person including first right to take over and complete the project will rest with allottees who has purchased apartment in the said project.

27 Marketing Agents Not required to be registered

Registration is mandatory with RERA authority.

Definition of Real Estate Brokers/ Agents as per the new law


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“Real Estate Agent” means any person, who negotiates or acts on behalf ofone person in a transaction of transfer of his plot, apartment or building, asthe case may be, in a real estate project, by way of sale, with anotherperson or transfer of plot, apartment or building, as the case may be, of anyother person to him and receives remuneration or fees or any other chargesfor his services whether as commission or otherwise and includes a personwho introduces, through any medium, prospective buyers and sellers toeach other for negotiation for sale or purchase of plot, apartment orbuilding, as the case may be, and includes property dealers, brokers,middlemen by whatever name called.

Registration of real estate agents


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Make Application

for Registration

Acceptance on fulfillment of all

condition , within such period

Reject if does not confirm to the

provisions of the Act

Deemed to be Registered if within

the specified period no communication of

acceptance or rejection received

Grant a Single Registration for entire State of Union territory

Opportunity of being heard

has to be given



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Section 9

(1) All real estate agent shall not facilitate the sale or purchase of or act onbehalf of any person to facilitate the sale or purchase of any plot, apartment orbuilding, as the case may be, in a real estate project or part of it, being the partof the real estate project registered under section 3, being sold by thepromoter in any planning area, without obtaining registration under thissection.

(2) Every real estate agent shall make an application to the Authority forregistration in such form, manner, within such time and accompanied by suchfee and documents as may be prescribed.



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(3) The Authority shall, within such period, in such manner and upon satisfying itself of the fulfilment of such conditions, as may be prescribed—

(a) grant a single registration to the real estate agent for the entire State of Union territory, as the case may be;

(b) reject the application for reasons to be recorded in writing, if such application does not conform to the provisions of the Act or the rules or regulations made there under:

Provided that no application shall be rejected unless the applicant has been given an opportunity of being heard in the matter.



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(4) Whereon the completion of the period specified under sub-section (3), if the applicant does not receive any communication about the deficiencies in his application or the rejection of his application, he shall be deemed to have been registered.

(5) Every real estate agent who is registered as per the provisions of this Act or the rules and regulations made there under, shall be granted a registration number by the Authority, which shall be quoted by the real estate agent in every sale facilitated by him under this Act.

(6) Every registration shall be valid for such period as may be prescribed, and shall be renewable for a period in such manner and on payment of such fee as may be prescribed.



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Real Estate Agent

Registered

Breach of any of the terms and conditions specified and any rules or regulations.

Authority is satisfied that such registration has been secured by the real estate agent through misrepresentation or fraud

Revoke Suspend

Opportunity

of being heard has to be

given



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(7) Where any real estate agent who has been granted registration under thisAct commits breach of any of the conditions thereof or any other terms andconditions specified under this Act or any rules or regulations made thereunder, or where the Authority is satisfied that such registration has beensecured by the real estate agent through misrepresentation or fraud, theAuthority may, without prejudice to any other provisions under this Act,revoke the registration or suspend the same for such period as it thinks fit:

Provided that no such revocation or suspension shall be made by the Authorityunless an opportunity of being heard has been given to the real estate agent.



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Real estate agent

(applicant)

Individual –Rs 10,000

Others –Rs 1,00,000

Fees

Name of EnterpriseRegistered Address (Place of business)Type of EnterpriseRegistration No (PAN Aadhar, Din No etc)

Particulars of Registration under any other law Authenticated Copies of partnership deeds, AOA, MOA.

Recent Colour Photographs of Real Estate Agent Individual, All partners , All Directors as applicable

IT Returns of last 3 FYSDeclaration of Income of last 3 FY’s if the applicant was exempted from filing returns

In writing prior to engaging in any

activity

Application

Details of all civil and criminal cases pendingAuthenticated copies of proof of address, branches along with telephone, fax & email id.



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1) Every real estate agent required to be registered as per sub section (2) ofsection 9 shall make an application in writing,- in case of registered realestate projects forthwith and in any case prior to engaging in any activityrelating to marketing, advertising sale or purchase of any apartments.

2) The following documents shall also be submitted along with the applicationnamely:-

a) Brief details of his enterprise including its name, registered address of placeof business, type of enterprise (proprietorship firm, societies, partnership,company etc.); Registration numbers, PAN , Aadhar Card No, DIN, as the casemay be, under which returns are required to be filled with statutoryauthority;



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b) Particulars of registration obtained under other laws, and rules andregulations, as the case may be, along with the authenticated copy ofpartnership deeds, memorandum of association, articles of association, etc;

c) Recent colour photographs of the real estate agent, if an individual and of allthe partners, directors, trustees, etc. Including persons in service or assignedwork expected on a real estate agent, in case of other entities;

d) Income tax returns for last 3 financial years preceding the application or incase the applicant was exempted from filing returns in any of the 3 yearspreceding the application, a declaration to such effect;



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e) Authenticated copy of the proof of address of the principal place of business, number of branch offices if any along with contact details including telephone number, fax number and email address; and

f) Details (if any) of a real estate projects and their promotes on whose behalf he has acted as real estate agent 5 years;

g) Details of all civil and criminal cases pending against him if an individual or any of the partners, directors, trustees etc. In case of other entities;

h) Authenticated copies of all letter heads; rubber stamp images, acknowledgement receipt proposed to be used by the real estate agent;

i) Such other information and documents, as may be specified by regulations.



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3) (i) A sum of rupees ten thousand, in case of applicant being an individual; and

(ii) rupees one lakh, in case of the applicant being other than an individual.

4) The fees for registration of real estate project shall be paid through NEFT or RTGS system or any other digital transaction mode.

5) The real estate agent up on being engaged by the promoter under clause (f) of sub-section (2) of section 4 for a real estate project shall maintain and preserve books of accounts, records and documents separately for each such real estate project.

Duties real estate agents


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Every RE agent is required to be registered wit h RERA for Facilitating sale, purchase of any RE project

RE Agent shall not facilitate purchase or sale of RE project not registered with RERA

Maintain and presence books of accounts, records and documents as may be prescribed

Not involve in any unfair trade practices

Facilitate the possession of all information and documents to the allottees

Thank you


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MANOJ PANDIT

Advocate

M & P Management Consultants Pvt. Ltd.

A-305, Durian Estate,

Goregaon Mulund Link Road,

Goregaon East, Mumbai – 400063

Mail: [email protected]

Cell: 9820491848