Aguideto­buy­ers’ rights whenRera re­jects project reg­is­tra­tion ap­pli­ca­tion

What hap­pens when state Rera re­jects ap­pli­ca­tion for project reg­is­tra­tion of an on­go­ing project? HT Es­tates ex­am­ines the is­sue

Hindustan Times (Chandigarh) - Estates - - HT ESTATES - Mu­niesh­wer A Sa­gar mu­niesh­wer.sa­gar@hin­dus­tan­times.com

The Pun­jab Real Es­tate Reg­u­la­tory Au­thor­ity (PRera) re­cently re­jected the reg­is­tra­tion ap­pli­ca­tion for a project of a builder based in New Chandigarh (Mul­lan­pur) for want of req­ui­site ap­provals and li­cences from the author­i­ties.

On the re­jec­tion of the ap­pli­ca­tion, one of the nearly 500 plot al­lot­tees in the project, Ram Kr­is­han Goel, based in Sirsa, said, “I had bought a plot in the project in 2011. I was promised pos­ses­sion by the end of 2013. But the builder hasn’t de­liv­ered yet. This is the case with most al­lot­tees. We were hop­ing we would ap­proach the state Rera against the builder for fail­ing to de­liver the project on time. But now the ap­pli­ca­tion of the builder for reg­is­tra­tion of the project has been re­jected so we can­not com­plain against him. We are clue­less on what hap­pens to the plot we bought and whether we can get jus­tice when the project is not reg­is­tered with the state Rera.” NO COM­PLAINT IF PROJECT NOT REG­IS­TERED WITH PRERA In a land­mark or­der in the Bikramjit Singh ver­sus M/s HP Singh case, the PRera held that com­plaints against pro­mot­ers in re­la­tion to the projects that are not reg­is­tered with the au­thor­ity will not be main­tain­able be­fore it.

In the same or­der, the au­thor­ity also cleared the am­bi­gu­ity re­gard­ing the main­tain­abil­ity of any com­plaint where the al­leged builder vi­o­la­tions took place prior to the com­mence­ment of the Real Es­tate (Reg­u­la­tion and De­vel­op­ment) Act (Rera Act).

It laid down three con­di­tions that must be ful­filled for such com­plaints to be con­sid­ered by it. Firstly, the al­leged vi­o­la­tions, though com­menc­ing be­fore the en­force­ment of the Rera Act, must be con­tin­u­ing till date; sec­ondly, the al­leged vi­o­la­tions must also con­sti­tute a con­tra­ven­tion of the Rera Act and the rules and reg­u­la­tions made there­un­der; and thirdly, the is­sue should not have been de­cided or be pend­ing in any fo­rum/court be­fore ap­proach­ing this au­thor­ity. This is nec­es­sary to avoid mul­ti­plic­ity of lit­i­ga­tion. The or­der reads, “Only if all the three con­di­tions are ful­filled, and the onus would on the com­plainant to prove these, would any al­leged vi­o­la­tions that took place be­fore the com­ing into force of this Act (Rera Act) be con­sid­ered by this au­thor­ity”. MANDA­TORY PROJECT REG­IS­TRA­TION Un­der Sec­tion 3 of the real es­tate (reg­u­la­tion and de­vel­op­ment) Act, no pro­moter can ad­ver­tise, mar­ket, book, sell or of­fer for sale, or in­vite per­sons to pur­chase in any man­ner any plot, apart­ment or build­ing, as the case may be, in any real es­tate project or part of it, in any plan­ning area, with­out reg­is­ter­ing the real es­tate project with the real es­tate reg­u­la­tory au­thor­ity. All on­go­ing projects on the date of com­mence­ment of the Act and for which the com­ple­tion cer­tifi­cate has not been is­sued, the pro­moter has to make an ap­pli­ca­tion to the au­thor­ity for reg­is­tra­tion of the project.

If the au­thor­ity thinks nec­es­sary, in the in­ter­est of al­lot­tees, for projects that are de­vel­oped be­yond the plan­ning area but with the req­ui­site per­mis­sion of the lo­cal au­thor­ity, it may, by or­der, di­rect the pro­moter of such projects to reg­is­ter with the au­thor­ity, and the pro­vi­sions of this Act or the rules and reg­u­la­tions made there­un­der, shall ap­ply to such projects from that stage of reg­is­tra­tion, stip­u­late the Sec­tion 3 of the Act.

Sec­tion 59 of the Rera Act lays down the pun­ish­ment, if a pro­moter con­tra­venes the pro­vi­sions of Sec­tion 3.

If proven, a pro­moter can face a penalty which may ex­tend up to 10% of the es­ti­mated cost of the real es­tate project as the au­thor­ity deter­mines.

Re­peated vi­o­la­tions are pun­ish­able with im­pris­on­ment up to three years or with fine which may ex­tend up to a fur­ther 10% of the es­ti­mated cost of the real es­tate project, or with both.

IN­FOR­MA­TION FOR ON­GO­ING PROJECT REG­IS­TRA­TION

All on­go­ing projects that haven’t re­ceived the com­ple­tion cer­tifi­cate are cov­ered un­der Act. They have to sub­mit ad­di­tional in­for­ma­tion to the au­thor­ity for project reg­is­tra­tion.

Orig­i­nal sanc­tions: The builder must sub­mit the orig­i­nal sanc­tioned plan, lay­out plan and spec­i­fi­ca­tions and the sub­se­quent mod­i­fi­ca­tions car­ried out, if any, in­clud­ing the ex­ist­ing sanc­tioned plan, lay­out plan and spec­i­fi­ca­tions with the au­thor­ity.

Money col­lected: For pro­tect­ing the buyer’s money al­ready in­vested in the project, the builder must share and sub­mit with the au­thor­ity the to­tal amount of money col­lected from the al­lot­tees.

In ad­di­tion to it, he must give de­tails of the to­tal amount of money used for de­vel­op­ing the project, in­clud­ing the to­tal amount of bal­ance with him.

Pos­ses­sion sched­ule: Pos­ses­sion de­lays have be­come en­demic to the hous­ing sec­tor. In case of an in­com­plete project, the builder must up­date the au­thor­ity re­gard­ing the stage of de­vel­op­ment at the site. He must sub­mit the sta­tus of the project (the ex­tent of de­vel­op­ment car­ried out till date and the ex­tent of de­vel­op­ment pend­ing). He must also men­tion the orig­i­nal time pe­riod dis­closed to the al­lot­tee for the com­ple­tion of the project at the time of sale. The de­lay and the time pe­riod within which he un­der­takes to com­plete the pend­ing project should also be men­tioned. All this in­for­ma­tion shall be cer­ti­fied by an en­gi­neer, an ar­chi­tect and a char­tered ac­coun­tant.

Car­pet area: The builder must also dis­close the size of the apart­ment based on the car­pet area even if ear­lier sold on any other ba­sis such as su­per area, su­per built-up area, built-up area etc. that shall not af­fect the va­lid­ity of the agree­ment en­tered into be­tween the pro­moter and the al­lot­tee to that ex­tent. In case of plot­ted de­vel­op­ment, the builder must dis­close the area of the plot be­ing sold to the al­lot­tees as per the lay­out plan.

Sep­a­rate ac­count: For the projects that are on­go­ing and have not re­ceived a com­ple­tion cer­tifi­cate, the builder must, within three months of the ap­pli­ca­tion for reg­is­tra­tion of the project with the au­thor­ity, “de­posit in the sep­a­rate bank ac­count, 70% of the amounts al­ready re­alised from the al­lot­tees, which have not been used for con­struc­tion of the project or the land cost for the project”.

In case the builder fails to pro­vide such in­for­ma­tion, his ap­pli­ca­tion is li­able to be re­jected by the state au­thor­ity.

WHEN REG­IS­TRA­TION FOR A PROJECT IS RE­JECTED

“The re­jec­tion of ap­pli­ca­tion for project reg­is­tra­tion or can­cel­la­tion or re­vo­ca­tion or sus­pen­sion of the project reg­is­tra­tion lead to the same sit­u­a­tion. The same sec­tions of the Act come into play,” says Hi­man­shu Raj, a Chandigarh-based ad­vo­cate.

The buyer has lim­ited op­tions in terms of ac­tion he can seek against the de­fault­ing builder. He can seek dam­ages against the builder. “If the reg­is­tra­tion of the de­vel­oper un­der Rera is re­jected or can­celled or re­voked then it is ad­vis­able that the buyer should ask for the com­plete re­fund of his en­tire amount, in­clud­ing the dam­ages and the com­pen­sa­tion, un­der Sec­tions 18(1)(b) and 19 (4) of Rera,” says Raj.

Sec­tion 18 (1) (b) stip­u­lates, “If the pro­moter fails to com­plete or is un­able to give pos­ses­sion of an apart­ment, plot or build­ing 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 on de­mand to the al­lot­tees, in case the al­lot­tee wishes to with­draw from the project, with­out prej­u­dice to any other rem­edy avail­able, to re­turn the amount re­ceived by him in re­spect of that apart­ment, plot, build­ing, as the case may be, with in­ter­est at such rate as may be pre­scribed in this be­half in­clud­ing com­pen­sa­tion in the man­ner as pro­vided un­der this Act.”

As per the Sec­tion 19 (4) of the Act, “The al­lot­tee shall be en­ti­tled to claim the re­fund of amount paid along with in­ter­est at such rate as may be pre­scribed and com­pen­sa­tion in the man­ner as pro­vided un­der this Act, from the pro­moter, if the pro­moter fails to com­ply or is un­able to give pos­ses­sion of the apart­ment, plot or build­ing, as the case may be, in ac­cor­dance with the terms of agree­ment for sale or due to dis­con­tin­u­ance of his busi­ness as a de­vel­oper on ac­count of sus­pen­sion or re­vo­ca­tion of his reg­is­tra­tion un­der the pro­vi­sions of this Act or the rules or reg­u­la­tions made there­un­der.”

But if the buyer does not wish to get the re­fund of the amount then, “The buyer must rely on the de­ci­sion of the au­thor­ity for car­ry­ing out the re­main­ing de­vel­op­ment of the prop­erty un­der Sec­tion 8 of Rera and keep re­ceiv­ing in­ter­est for ev­ery month of de­lay, till the hand­ing over of the pos­ses­sion, at such rate as may be pre­scribed un­der sec­tion 18(1)(b) of the Rera,” says Raj.

All on­go­ing projects that haven’t re­ceived the com­ple­tion cer­tifi­cate are cov­ered un­der Act. They have to sub­mit ad­di­tional in­for­ma­tion to the au­thor­ity for project reg­is­tra­tion.

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