Registration revocation and possession deadlines
CHANDIGARH: No builder can advertise, sell or market a realty project without first registering with the state real estate regulatory authority.
Under the Section 3 of the Real Estate (Regulatory and Development) Act, the builder must register the project before it gains the right to market its project. If it violates these provisions, it can be punished with penalty or and imprisonment.
At the time of the registration of a project, the builder must submitan affidavit with the state Rera, disclosing the possession schedule and deadline. According to the Section 4 of the Rera Act, the builder must submit a declaration supported by an affidavit, which has to be signed by him or any person authorised by it, stating the time period within which he under takes to complete the project or phase thereof.
The Act and the state rules made thereunder make it mandatory on the builder to disclose the status of all the projects he has undertaken and is currently developing for his registration to be allowed.
Under Section 4 of the Act, the builder must enclose documents along with the registration giving a brief detail of the possession details 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.
MAKING POSSESSION DEADLINE REGISTRATION EXPIRY DATE
Delayed possession has been the single most important cause of home buyer harassment across the country. Irrespective whether a builder is local or national level, the failure to deliver possession on time has become endemic in the sector. This has impacted the buyer confidence in the housing, and it is blamed as a major determinant of the current slowdown in the market.
The Act and the rules made thereunder aim to rectify the issue by laying down provisions that encourage as well as make it mandatory for the builder to stick to declared possession deadlines.
Under the Section 5 of the Act, the registration granted is valid for a period declared by the builder for completion of the project or phase thereof, as the case may be. The registration expires with the expiration of the possession deadline.
The state Rera can extend the registration even after expiration of the possession deadline under certain conditions. According the Section 6 of the Act, 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 as maybe specified by regulations made by the authority. Such an extension cannot exceed one year.
“The authority may in reasonable circumstances, without default on the part of the promoter, based on the facts of each case, and for reasons to be recorded in writing, extend the registration granted to a project for such time as it considers necessary, which shall, in aggregate, not exceed a period of one year,” stipulates the Act.
“Force maj eu re” means a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project.
Upon lapse of the registration or on revocation of the registration under the Act, the authority, may consult the appropriate government to take such action as it may deem fit including the carrying out of the remaining development works by competent authority or by the association of allottees or in any other manner, as may be determined by the authority. The association of allottees shall have the first right of refusal for carrying out of the remaining development works.
The builder must pay all outgoings until he transfers the physical possession of the real estate project to the allottee or the associations of allottees, as the case may be, which he has collected from the allottees, for the payment of outgoings (including land cost, ground rent, municipal or other local taxes, charges for water or electricity, maintenance charges, including mortgage loan and interest on mortgages or other encumbrances and such other liabilities payable to competent authorities, banks and financial institutions, which are related to the project), stipulates Section 11 of the Act.
In case, he fails to pay all or any of the outgoings collected by him from the allottees or any liability, mortgage loan and interest thereon before transferring the real estate project to such allottees, or the association of the allottees, as the case may be, the promoter shall continue to be liable, even after the transfer of the property, to pay such outgoings and penal charges, if any, to the authority or person to whom they are payable and be liable for the cost of any legal proceedings which may be taken therefor by such authority or person
The Act makes it mandatory for the builder to disclose the status of all projects it has undertaken and is currently developing for the registration process.