OVERVIEW : THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016 AND THE UTTAR PRADESH REAL ESTATE (REGULATION AND DEVELOPMENT) RULES, 2016

RERA stands for Real Estate Regulatory Authority which came into existence as per the Real Estate (Regulation and Development) Act, 2016, an act passed by the Parliament in 2016 that came into effect with its 92 sections fully from 1st May, 2017. It aims to protect the purchasers and also to boost the investments. It establishes the Real Estate Regulatory Authority for regulation and promotion of the real estate sector, to ensure the sale of plot, apartment, building or real estate project in an efficient and transparent manner, to protect the interests of consumers in the real estate sector, to establish an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals.

The Act has provisions for establishing a regulatory authority at state level called ‘Real Estate Regulatory Authority’ for monitoring the real estate sector and adjudicating disputes relating to real estate projects in the state. Section 84 of the Real Estate (Regulation and Development), 2016 says that the appropriate government shall within a period of six months of the commencement of this act, by notification, make rules for carrying out the provisions of this Act. In exercise of the powers conferred by section 84 of the Real Estate (Regulation and Development) Act, 2016 (Central Act No. 16 of 2016), the Uttar Pradesh government, made the Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016.

Section 3 of the Act provides for prior registration of real estate project with Real Estate Regulatory Authority. Under section 3(1), no  promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase any real estate project, without registering with the Real Estate Regulatory Authority. Under section 3(2),  no registration of the real estate project shall be required 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 with the discretion to appropriate Government to reduce this threshold below five hundred square meters or eight apartments, for exemption from registration under this Act, if considers it necessary. No registration is required where the promoter has received completion certificate for a real estate project prior to commencement of this Act. No registration is required for the purpose of renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, under the real estate project.

Under section 4(1) of the Act, every promoter shall make an application to the Authority for registration of the real estate project in such form, manner, within such time and accompanied by such fee as may be decided by the appropriate government. Under Rule 3(3) of  UP RERA, the promoter shall pay a registration fee at the time of application for registration, calculated at the rate of Rs.20 per square meter for commercial projects where the area of land does not exceed 1,000 square meters and Rs.1,000 for every 100 square meter where the area of land exceeds 1,000 square meters. Rs.10 per square meter for residential or any other projects where the area of land does not exceed 1,000 square meters and Rs.500 for every 100 square meter where the area of land exceeds 1000 square meters.

Section 4(2) provides for the documents that the promoter shall enclose with the application for registration. The application referred to in section 4(1) shall be made in writing as per Form A. Under section 5(1) of the act, the Authority shall grant or reject the application for registration within 30 days of the receipt of the application. If the authority fails to grant or reject the application, as provided under section 5(1), the project shall be deemed to have been registered. Upon the registration as per section 5 read with Rule 3, the authority shall issue registration certificate with a registration number as per Form C to the promoter and the authority shall inform the applicant as per Form D in case of rejection of the application.

Under section 6, the registration granted under section 5 may be extended by the Authority on an application made by the promoter, due to force majeure, in such form and on payment of such fee decided by appropriate government. Under the Rule 7 of UP RERA, registration may be extended on application by promoter in Form E and on payment of twice the amount of registration fee. If extension is due to force majeure, the fee may be waived at the discretion of the authority.  Section 7 provides that the Authority may, on receipt of a complaint or suo motu, revoke the registration granted under section 5.

Rule 9(1) provides that every real estate agent is required to register as per section 9(2) of the act and shall make an application to regulatory authority as per Form G along with the documents mentioned under the rule. The real estate agent shall pay a registration fee of Rs. 25,000 in case the applicant is an individual and Rs.2,50,000 in case of being anyone other than individual. Upon the registration as per section 9 read with Rule 10, the authority shall issue a registration certificate with registration number as per Form H. The registration under this rule is valid for 10 years. Under Rule 11, the registration granted under section 9, may be renewed as per section 6 with the payment of fee for renewal. The renewal granted is valid for a period of 5 years.

Under section 12, if any person makes an advance or a deposit on the basis of the information contained in the notice, advertisement or prospectus, and sustains any loss or damage by reason of any incorrect, false statement included therein, he shall be compensated by the promoter. Section 13 of the act provides that a promoter shall not accept a sum more than 10% of the cost of the apartment, plot, or building, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person. Under section 14, the proposed project shall be developed and completed by the promoter in accordance with the sanctioned plans, layout plans and specifications as approved by the competent authorities.

Section 17 provides that the promoter shall execute a registered conveyance deed in favour of the allottee along with the undivided proportionate title in the common areas to the association of the allottees or the competent authority, and hand over the physical possession of the plot, apartment or building, to the allottees.

Under section 18, if the promoter fails to complete or is unable to give possession of an apartment, plot or building, in accordance with the terms of the agreement for sale, duly completed by the date specified therein or due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable to the allottees. If the allottee wishes to withdraw from the project, without prejudice to any other remedy available, he shall be given the amount paid by him in respect of that apartment, plot, building, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act. Where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed. The promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land, and the claim for compensation shall not be barred by limitation provided under any law for the time being in force. If the promoter fails to discharge any other obligations imposed on him, he shall be liable to pay such compensation to the allottees.

Under Rule 16 of UP RERA, any refund of money along with the applicable interest and compensation, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with applicable interest and compensation, becomes due.

Section 21 provides that the RERA shall consist of a Chairperson and not less than two whole time members to be appointed by the appropriate Government. Under Rule 17(1), the RERA shall consist of a Chairperson and three whole time members to be appointed by the Government.

Section 22 provides that the Chairperson and other Members of the Authority shall be appointed by the appropriate Government on the recommendations of a Selection Committee consisting of the Chief Justice of the High Court or his nominee, the Secretary of the Department dealing with Housing and the Law Secretary. Rule 17 provides for the constitution of a Search Committee to suggest a panel of names having the required qualification and experience and are suitable for being considered for appointment as Chairperson or Member of the authority. The Chairperson and Members shall hold office for a term not exceeding five years from the date on which they enter upon their office, or until they attain the age of sixty-five years, whichever is earlier and shall not be eligible for re-appointment. Under Rule 18(1), subject to the provisions of section-26 of the Act the Chairperson and Members of the authority shall be entitled to draw salaries, as admissible to the Chief Secretary.

Section 26 of the act provides for the removal of Chairperson and Members from office in certain circumstances. The appropriate Government may, in accordance with the procedure notified, remove from office the Chairperson or other Members, if the Chairperson or such other Member, has been adjudged as an insolvent or has been convicted of an offence, involving moral turpitude or has become physically or mentally incapable of acting as a Member or has acquired such financial or other interest which is likely to affect prejudicially his functions or has so abused his position as to render his continuance in office prejudicial to the public interest.

Rule 24 provides that, for the purpose of section 40(2), every order passed by the adjudicating officer, regulatory authority or Appellate Tribunal, under the Act or the rules and regulations made thereunder, shall be enforced in the same manner as if it were a decree or order made by the principal civil court in a pending suit.

Section 31 provides for the filing of complaints with the Authority or the adjudicating officer. Any aggrieved person may file a complaint with the Authority or the adjudicating officer, for any violation or contravention of the provisions of this Act or the rules and regulations, against any promoter, allottee or real estate agent.

Under section 36, the authority has the power to issue interim orders. During an inquiry, if the Authority is satisfied that an act in contravention of this Act, or the rules and regulations, has been committed and continues to be committed or that such act is about to be committed, the Authority may, by order, restrain any promoter, allottee or real estate agent from carrying on such act until the conclusion of such inquiry or until further orders, without giving notice to such party.

Section 43 of the act provides for the establishment of the Real Estate Appellate Tribunal. Under sub-section (1), the appropriate government shall, within a period of one year from the date of coming into force of this Act, by notification, establish an Appellate Tribunal to be known as the Real Estate Appellate Tribunal of that state or Union Territory. Rule 25(1) provides that every appeal filed under sub-section (1) of section 44 shall be accompanied by a fee of rupees one thousand in favour of the Appellate Tribunal. Appeal to the Appellate Tribunal shall be filed as per Form ‘L’ along with the documents mentioned. An appeal made under sub-section (1) shall be preferred within a period of sixty days from the date on which a copy of the direction or order or decision made by the Authority or the adjudicating officer is received by the appropriate government or the competent authority or the aggrieved person and it shall be in form and accompanied by fee as prescribed. The Appellate Tribunal may entertain the appeal after the expiry of sixty days if it is satisfied that there was sufficient cause for not filling it within that period. The appeal under sub-section (1), shall be dealt with as expeditiously as possible and endeavour shall be made to dispose of the appeal within a period of sixty days from the date of receipt of appeal. If an appeal could not be disposed of within the said period of sixty days, the Appellate Tribunal shall record its reasons in writing for not disposing of the appeal within that period.

Section 53 provides that 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. Subject to the provisions of Act, the Appellate Tribunal shall have power to regulate its own procedure. The Appellate Tribunal shall also not be bound by the rules of evidence contained in the Indian Evidence Act, 1872. The Appellate Tribunal shall have, for the purpose of discharging its functions under the Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908. All proceedings before the Appellate Tribunal shall be deemed to be judicial proceedings.

According section 58, if 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. The High Court may entertain the appeal after the expiry of the period of sixty days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time.

Buyer’s non-compliance with RERA may lead to daily penalty of up to 5% of the approximate cost of the project. Buyer’s non-compliance with the Appellate Tribunal may lead to imprisonment of upto 1 year or 10% of the approximate cost of the project or both. Promoter’s non-registration may lead to 10% of the project’s estimated cost. Promoter’s giving false information to 5% of the project’s estimated cost. Violation of laws by the promoter may lead to upto 3 years of imprisonment or a fine of 10% of the estimated cost of the property, or both. Non-registration of projects may lead to Rs.10,000 per day or upto 5% of the approximate cost of the project to the agent. Non-compliance with the RERA by the agent may lead to a daily penalty upto 5% of the estimated cost of the project. Non-compliance with the Appellate Tribunal by the agent may lead to imprisonment of upto 1 year or 10% of the project’s estimated cost, or both.

References :

Aishwarya Says:

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