Should delayed projects come under RERA?
Development) Act 2016, which is expected to include provisions for compensation and punishment.
Interestingly, none of the projects in UP have been handed over within 24 months of the builder receiving the completion certificate. Curiously, no rules specify how builders are to be penalised in such cases.
The Allahabad High Court (HC)in March this year directed a Noida builder to speed up a project delayed by over four years. It also asked the state government for issuance of guidelines for the implementation of the provisions of Section 4 (5) as it (state government) has power under Section 27 to issue directions for the efficient administration of the Act to the competent authorities.
The 20 homebuyers had in their writ petition to the HC said that “Noida Authority has acted contrary to the statue in allowing the promoter to delay the project for over four years whereas the public policy mandates completion of project within a period of 24 months, thereby frustrating the intent of the legislation.”
Section 4 ( 5) of t he UP Apartment Act states that “an apartment may be transferred by the promoter to any person only after obtaining the completion certificate from the prescribed sanctioning authority concerned as per building byelaws. The completion certificate shall be obtained by the promoter from prescribed authority within the period of two years from the date of the sale agreement.”
According to S K Pal, Supreme Court lawyer, the UP Apartment Act already has some stringent provisions with regard to any delay in completion of the project. However, it has nothing to say on the quantum of the punishment and compensation which have been clearly provided for in RERA. Homebuyers who have invested in delayed projects have demanded that these be included in the ambit of the draft rules of the Real Estate ( Re gulation and Development) Act, 2016. They have suggested to the government that developers disclose before the regulatory authority the original date of completion of the project, the delays incurred and details of the amount collected from homebuyers and spent on the project to ensure adequate balance in the escrow account for its completion. They also want projects to be handed over to buyers only after common areas and all facilities are up and running.
The buyers who have come together under the banner Fight For RERA met urban development minister Venkaiah Naidu with Rajeev Chandrasekhar, member of the Rajya Sabha Select Committee on the Real Estate Act, to apprise him of the issues faced by them.
“The draft rules do not adequately reflect protection of consumers of these delayed/ incomplete projects. The suggestions submitted to MoUD minister are expected to close that gap and the final rules will reflect what consumers want. Consumers across the country will henceforth be aware of the possibilities of their rights and the obligations builders have towards them, says Chandrasekhar.
Ongoing projects are those that have not received completion certificate prior to the commencement of RERA. Currently, there are 13,500 projects in the top eight Indian cities out of which2,200 projects have been delayed for six to 12 months, 2,153 for 12 to 24 months and 1,486 for more than 24 months largely due to delays in approvals and cash crunch faced by developers, says real estate research firm Liases Foras.
“Draft rules have not provided for adequate protection to buyers of ongoing projects. Ongoing projects have different complexities and those need to be addressed in the draft rules,” says Abhay Upadhyay, national convenor, Fight for RERA.
Homebuyers have suggested that the developer disclose the original date for completion of the project/ phase at the time of launch along with extension taken (if any) from the competent authority clearly mentioning delays since launch. The size of the apartment has to be considered on the basis of the carpet area,