One of the salient features of RERA is the requirement of registration of the real estate project with the Real Estate Regulatory Authority (of the respective state) . Section 4 of RERA says that every ‘Promoter’ needs to make an application to the Real Estate Regulatory Authority of their respective States for the registration of a real estate project that they seek to develop. Where the real estate project is to be developed in phases, every such phase shall be considered as an independent or free-standing individual project. All of the phases will thus be required to be separately registered.
Who is a ‘Promoter’? ?
RERA defines ‘Promoter’ as an entity in any of the following natures:
- Development Authority;
- Society; or
- Holder of Power of Attorney from the owner of the land on which abuilding / apartment is constructed or a plot is developed for sale.
What is a ‘Real Estate Project’?
A Real Estate Project is defined as a project involving the development of a building , the conversion of an existing building or a part of it into apartments, the development of land into apartments for the purpose of selling and it includes the common areas attached to such apartments, the development of all the facilities, all improvements and structures thereon including all easements, rights and appurtenances belonging to such building, land or structure.
The terms “apartment” and “building” as used in the aforesaid definition are defined under the Act to not only cover residential projects but also commercial projects.
Grant of registration for Real Estate Projects
Prior to the registration of the project, no promoter is allowed to advertise, market, sell or make an offer for sale, booking, or invite people to purchase any plot/building/unit/apartment in a real estate project. The projects that have already received their completion and occupancy certificate prior to the commencement of this act need not be registered.
Registration is not required for projects where the land area proposed to be developed does not exceed 500 sq meters or the number of apartments proposed to be developed does not exceed eight. The procedure for the application of registration is given under section 4 of the RERA. Every promoter must make an application to the RERA authority (of the respective state) for registration of their projects and shall submit the necessary documents along with prescribed fee in accordance with section 4 of RERA.
On receipt of an application made by a promoter to the authority, the authority must within a period of thirty days grant or reject any such application.
If the authority is satisfied that the application is made in line with and without violation of any provision of this Act or the rules and regulations made thereunder, it shall grant registration to such project and shall provide a registration number to the promoter for such project along with a login I.D and a password for accessing the website of the authority and to create its own web page and fill all the necessary details pertaining to the project in concern
The authority is also given the power to reject the application. The reason for rejection of such an application must be recorded in writing . Mostly, the reason is that such application does not conform to the provisions of RERA or the rules and regulations made thereunder. However, an application can only be turned down by the authority after having given a chance or an opportunity to the promoter to be heard.
If the authority fails to respond within 30 days by granting or rejecting such an application, as the case may be, registration of the project for which application was made shall be deemed to be granted and the authority shall have to provide (within a period of 7 days from the expiry of the prescribed 30 days to give a decision) a registration number along with the login i.d. and the password to the promoter of such a project for accessing the website of the authority and creating its own web page with the necessary details.
The registration granted shall be valid for a period declared by the Promoter for completion of the real estate project or phase thereof as submitted in the affidavit along with the application for registration.
Extension of Registration period
The registration granted by the Authority may be extended by it upon receipt of application from the Promoter along with the prescribed fee in the following circumstances:
- Force Majeure: war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting and disturbing the regular developmental timeline of the real estate project.Other than Force Majeure: The Authority may extend the registration to a maximum period of one year if it feels that the circumstances and reasons for extension of the project are reasonable. If the reason is without default on the part of the promoter only then can the authority grant such extension. Before rejecting such an application, it is mandatory that the promoter making such application be given an opportunity to be heard.
Revocation of Registration
RERA is the umbrella Act that governs the Real Estate sector through and through. It has strict compliance rules which should be met with and abided by all the promoters seeking to develop a real estate project. If any act is performed or there is any omission on the part of the promoter to perform an act, which is violative of or not in conformity with the provisions of RERA or the rules and regulations made thereunder, the registration granted to a project may be revoked by the authority. The authority may, on the receipt of a complaint or suo motu, revoke a registration already granted but before such revocation a thirty (30) days notice must be given to the promoter of such real estate project intimating him of the grounds on the basis of which the revocation is being revoked and provide the promoter a chance to clarify or give his reasons as to why the registration should not be revoked.
Grounds on which registration may be revoked
Following are the grounds upon which a registration for a real estate project may be revoked:
- The promoter defaults in performing some act required by this Act or the rules or regulations made under this Act.
- The promoter violates any terms or conditions of the approval given by the competent authority .
- The promoter indulges in any unfair practice like adopting some unfair means to promote the sale or development of the real estate project. Any deceptive practice used to carry forward the sale or development of the real estate project maybe a ground for revocation of the registration for such a project including-
- false representation of the availability of services of certain standards made through advertisements, hoardings, brochures etc.
- false representation made by the promoter of having any approvals or affiliations which he actually does not have.
- indulging in any fraudulent practice.
- publication of such services which are not intended to be offered.
The authority may instead of revoking the registration allow the project to remain in force for the interest of the home buyers subject to further terms and conditions as it thinks fit and such terms and conditions shall be binding upon the promoter.
Consequences of revocation of registration
Upon revocation of registration of the real estate project following shall be effects –
- the authority shall debar the promoter from accessing its website.
- the promoter shall be required to display his name in the list of defaulters and display his photograph on the website of the authority.
- The authority shall direct the bank holding the ‘self maintained account’ of the promoter to freeze such account until further orders or directions.
- the authority shall consult the State Government concerning the project whose registration is revoked and upon consultation may take such action as it may deem fit including the carrying out of remaining development works by the competent authority or Association of Allottees. It is provided in the Act that in case of revocation of registration, the association of allottees shall have the first right of refusal for carrying out the remaining development works.
Suresh V. Swamy Vs Larsen & Toubro Ltd.
In this case the customer, Suresh Swamy filed a complaint against the promoter, L & T Ltd. before the Real Estate Regulatory Authority. The promoter had failed to hand over the possession of the property to the allottee/home buyer on the date mentioned in the affidavit provided at the time of registration of the project (Under Section 4) . The customer complained that the promoters were earning interests on the deposits made by the allottee and he was unfairly deprived of both his money as well as the promised property.
The parties had agreed that the date of delivery of possession would be in the month of September 2017. The project received a certificate of occupancy in December 2018. There was a revised date of completion of the project which was December 2018. The question that arose in this matter was whether the Real Estate Regulatory Authority lost its jurisdiction on the date that the promoter obtained the occupancy certificate and whether their jurisdiction was coextensive with the period of registration of the project.
The authority in resolving the current issue considered the provisions of section 5(3) of RERA. The registration of a project shall be valid in line with the duration which the promoter has mentioned in the affidavit and the date declared as the time of completion of such a project.
The defendants contended that once the registration of the project lapses on attaining the occupancy certificate, the RERA authority loses its ambit of jurisdiction for such a project.
The court held that , since RERA remains silent upon the consequences of receiving the occupancy certificate , it would be erroneous to conclude that the Real Estate Regulatory Authority loses its jurisdictions.
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