Table of Contents Hide
- What is RERA?
- Objectives of RERA:
- Various Options/Remedies under RERA for home buyers (sections 12,14,18,19)
- Delayed possession-Section 18 of RERA
- How to File a Complaint under RERA (Section 31)
- Time-bound hearing in RERA
- Landmark Cases
The real estate sector is critical in closing the gap between India’s ideal and actual infrastructure position. At some point or another, everyone wishes to purchase their dream house. We spend our hard-earned money along with the huge amount of savings for that one house, but that dream seems to go in vain when we start facing unnecessary late flat possession, a new quoted price, and various other issues. To tackle these issues and protect the rights of home buyers, the government introduced the RERA Act in 2016.
What is RERA?
To deal with the uncertain attitude of builders who altered the agreements in their favor, the Government of India introduced the Real Estate (Regulation and Development) Act, 2016 (hereinafter, the Act), which further established a Real Estate Regulatory Authority (RERA) to protect the rights of buyers. The RERA Act aims to increase compliance in the real estate market to protect home buyers’ interests and restore lost faith and confidence.
RERA has been adopted by all the states in India, and most efficiently by Maharashtra and Uttar Pradesh, but almost every state to date has set up a separate tribunal to hear the real estate complaints and provide redressal.
Objectives of RERA:
- To safeguard the allottees’ interests and focus on ensuring their accountability.
- To regulate transparency while lowering the risk of fraud.
- To bring about pan-India uniformity and competence.
- To improve the exchange of accurate data between home buyers and sellers.
- To increase the responsibilities of both builders and investors.
- To improve the sector’s dependability and thus increase investor confidence.
The Indian States and RERA
It is mandatory for all the states and union territories in India to set up RERA. To date, 31 states and union territories have established RERA, except for Nagaland, as it is in the process of notifying rules. According to the Act, each state is required to frame its regulations and regulator (i.e., RERA). In addition to that, there has to be a tribunal to hear the appeal of the decisions made by the authorities at RERA.
The following are some of the states that have been doing well in the housing market:
Maharashtra RERA (MahaRERA)
The MahaRERA Act came into operation in May 2017, long before other states’ governments set up their regulatory bodies. It is in charge of RERA registrations in Dadra and Nagar Haveli as well as Daman and Diu and has processed over 18,000 applications. It processes well over 60% of all RERA applications in the country. It is one of the most efficient and active real estate authorities in India. It registers the maximum number of projects.
The Maharashtra RERA website is widely regarded as the most consumer-friendly of the RERA websites. You can understand everything there is to know about the projects that were accomplished under the scheme. As a result, you’ll be in a better position to make an informed decision about your property investment. Besides this, the Maharashtra RERA website provides existing and new MahaRERA-affected projects with up-to-date information.
Uttar Pradesh RERA (UP-RERA)
The 26th of July, 2017 is a pivotal event for homebuyers and the UP real estate sector. The UP-RERA website was unveiled by the chief minister of UP, Yogi Adityanath, making the state the first in the country to begin online management of real estate projects as well as public complaints. UP-RERA has several milestones to its name and is working tirelessly to effect transformational results in the sector.
Gujarat RERA (GujRERA)
The GujRERA came into existence in May 2017. When the agreement or sale deed is being signed between the builder and the buyer, a developer can ask for up to 10% of the property’s value. Both parties are legally required by GujRERA to register this agreement in order for it to be legitimate.
Various Options/Remedies under RERA for home buyers (sections 12,14,18,19)
There are numerous remedies for home buyers under RERA to facilitate their home-buying experience and protect their rights and interests. Some of them are listed below:
Functions and duties of promoter
Promoter’s duties regarding the truthfulness of the advertisement or prospectus (Section 12).
Suppose a person makes an advance payment based on information in a notice, advertisement, or prospectus, or a sample flat, building, or plot, and suffers any loss or damage as a result of any incorrect or false statement in any of the modes of information mentioned above. In that case, he is entitled to compensation under the Act:
Provided that the affected individual plans to withdraw from the project, he shall be repaid his entire amount spent, plus interest at the stipulated rate, and compensation in the manner specified by the Act by the promoter.
Who is a promoter?
As per Section 2(zk) of the Act, a promoter is,
- someone who constructs or intends to construct an independent building, or a building comprising of apartments or converts a current building or its parts into apartments in order to sell all the apartments or some of them to other people, including his assignees; or
- an individual who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons; or
- Any development authority or other public body in relation to allottees of-
i) buildings or apartments constructed by such authority or body on lands possessed by them or positioned at their discretion by the Government; or
ii) plots possessed by a certain authority or body or positioned at their discretion by the Government with the intention of selling all or a portion of the apartments or plot; or
- a superior State level co-operative housing finance society as well as a primary co-operative housing society that structures apartment buildings or dwellings for its Members or in respect of such allottees; or
- any other person who acts as a builder, contractor, developer, estate developer, colonizer, or under any other name, or claims to be acting on behalf of the land owner on which the building or apartment has been designed and built or plot is developed for sale; or
- any other person who constructs a building or apartment for public sale.
Promoter’s adherence to approved plans and project specifications (Section 14).
- The promoter must develop and complete the proposed plans in line with the sanctioned plans, layout plans, and specifications approved by the competent authorities.
- Despite any other law, contract, or agreement, after the sanctioned plans, layout plans, and specifications, as well as the nature of the fixtures, fittings, amenities, and common areas, of the apartment, plot, or building, as the case may be, as sanctioned by the relevant authority, are revealed or furnished to the person who agrees to take one or more of the said apartment, plot, or building, as the case may be, the promoter shall not make-
i) Any additions or alterations to the sanctioned plans, layout plans, and specifications, as well as the nature of fixtures, fittings, and amenities discussed therein in relation to the apartment, plot, or building, as the case may be, are agreed to be made without the prior consent of that person:
After proper declaration and intimation to the allottee, the promoter could make such minor modifications or alterations as the allottee may necessitate, or such small adjustments or alterations as may be required due to architectural and structural reasons duly suggested and validated by an authorized architect or engineer.
ii) Any other modifications or extensions to the sanctioned plans, layout plans, or specifications of the buildings or common spaces within the project without the prior written approval of at least two-thirds of the allottees who have decided to accept apartments in such a building, other than the promoter.
- If the allottee brings to the promoter’s attention, within five years from the date of handing over possession, any structural defect or other defects in workmanship, quality or provision of services, or any other obligation of the promoter according to the agreement for sale pertaining to such development, it shall be the promoter’s duty to rectify such defects without further charge, within thirty days, and in the event of the promoter’s failure to do so within sixty days.
Refund of the amount as well as compensation (Section 18).
- In the event of failure of the promoter to grant the possession of an apartment, plot, or building:
(a) in line with the agreement for sale, or, as the case may be, by the prescribed date therein; or
(b) due to the discontinuance of his business as a developer as a result of the suspension or revocation of his registration under this Act, or for any other reason, he shall be liable on demand to the allottees, without bias to any other redress available, to return the amount received by him in respect of that apartment, plot, or building, as the case may be, with interest at a certain rate as may be stipulated in this behalf including compensation in the manner as prescribed under the Act:
If an allottee does not prefer to retract from the project, the promoter shall pay him interest at the prescribed rate for each month of delay until possession is handed over.
- The promoter shall recompense the allottees in the event of any losses incurred to him by a faulty title to the land on which the project is being developed or has been developed, in the manner provided by this Act, and the claim for compensation under this subsection shall not be refrained by any limitation provided by any law in force at the time.
- If the promoter fails to discharge any other duty imposed on him by this Act, its rules or regulations, or the terms and conditions of the agreement for sale, he is required to pay such compensatory damages to the allottees in the manner provided by this Act.
Rights and duties of allottees
Allottees’ rights and responsibilities (Section 19).
- The allottee has the right to receive information concerning sanctioned plans, layout plans with specific requirements approved by the competent authority, and such other details as provided in this Act, the rules and regulations made thereunder, or the agreement for sale is signed with the promoter.
- The allottee has the right to know the project’s stage-by-stage completion schedule, including provisions for water, sanitation, electricity, and other recreational facilities agreed to by the promoter and the allottee in line with the agreement and conditions of the agreement for sale.
- According to the statement presented by the promoter under Section 4(2) (l) (C), the allottee shall be entitled to claim possession of the apartment, plot, or building, as the case may be, and the correlation of allottees shall be allowed to claim possession of the common spaces.
- If the promoter refused to adhere or is otherwise unable to grant possession of the apartment, plot, or building, as the case may be, in line with the agreement of the sale, or due to discontinuance of his business as a developer due to suspension or revocation of his registration, the allottee shall be allowed to claim the refund of the amount paid, together with interest at the prescribed rate, and compensation in the manner provided under this Act, from the promoter.
- After the promoter has handed over physical possession of the apartment, plot, or building, as the case may be, the allottee is empowered to obtain the required documentation and plans, including those for common spaces.
- Every allottee who has signed the agreement for sale to purchase an apartment, plot, or building under Section 13 is responsible for making the required payments in the method and within the time specified in the agreement for sale, as well as paying the proportion of the registration costs, municipal taxes, electricity and water costs, maintenance fees, ground rent, as well as other charges, if any, at the appropriate time and place.
- For any delayed payment of any amount or expenses to be paid under the sub-section, the allottee is responsible for paying interest at the prescribed rate (6).
- When unanimously agreed upon by the promoter and the allottee, the allottee’s duties under sub-section (6) and liability for interest under sub-section (7) may be reduced.
- Each allottee of an apartment, plot, or building, as the case may be, shall facilitate the formation of an association, society, cooperative society, or federation of the allottees.
- Each allottee must take physical possession of the apartment, plot, or building within two months of the accommodation certificate being issued for the said apartment, plot, or building.
- Each allottee is required to participate in the registration of the transportation deed of the apartment, plot, or building, as provided in Section 17(1) of this Act.
Delayed possession-Section 18 of RERA
Section 18 of the Act is especially important because it requires defaulting builders to pay damages for delays in granting possession of the flats.
If a builder fails to deliver possession of the flat by the date specified in the Agreement of Sale, the acquirer has two options under Section 18: either suspend the agreement and obtain a refund, or keep going with the project and demand redress. If he decides to abandon the project, the builder must refund the full amount paid for the flat, plus interest. If the homebuyer chooses to proceed with the project, he must contend with interest for each month of delay until the apartment is handed over.
The interest rate is determined by the real estate regulation rules, which differ from state to state.
For example, Rule 18 of the Maharashtra Real Estate Rules, specifies an interest rate equal to the SBI MCLR (Marginal Cost of Lending Rate) plus 2%. (2 percent ). If the existing MCLR rate is 8.6 percent (it varies), the penal rate of interest will be 10.6 percent.
How to File a Complaint under RERA (Section 31)
According to Section 31, complaints have to be filed with the authorities or an adjudicating officer.
- Any person who is dissatisfied with any promoter, allottee, or real estate agent may make a complaint with the Authority or the adjudicating officer, as the case may be, for any breach of the conditions of this Act or the rules and regulations constructed according to this section.
For this subsection, “person” includes any association of allottees or any consensual consumer association registered under any current law.
- The form, manner, and fees for filing a complaint under paragraph (1) shall be as prescribed.
Complaint filing procedure:
Section 31 of the RERA outlines the process for making a complaint against a builder, promoter, or real estate agent. RERA proceedings are civil. As a result, in addition to the complaint, you must pay a court fee. The court fee is proportional to the size of the flat or residential/commercial property. The court fee in a civil proceeding is usually calculated based on the house price. As a result, if the property is worth a lot of money, it raises the court fees.
The price of a property in metropolitan areas is incredibly high. As a result, calculating the court fee using the traditional method may cause difficulties for the aggrieved party because he must pay a large sum as the court fee. RERA has standardized the court fee structure, allowing the builder to initiate legal proceedings at a low court fee. As a result, the RERA bases court fees on the size of the land or flat. In general, the court fee for residential property is calculated at ₹ 10 per square meter.
Against whom can the complaint be made?
You may complain to RERA Section 31:
- Against a builder or promoter,
- Against an allottee,
- Against a real estate agent.
You may make a complaint if you believe that the clauses of this Act have been violated or contravened. Thus, there must be an infringement of RERA provisions to make a complaint. If the promoter, builder, or allottee fails to meet their duties, they have violated RERA provisions.
Steps to file a complaint
RERA comes under the control of the State Legislature. Therefore, each state has its set up to file a RERA complaint. Some have a well-settled online platform, while some are still following the offline method. Here we will discuss both ways:
Start by sending a legal notice to the builder. Moreover, you will have a strong reason in the event of deciding the compensation amount because you have tried in every possible way to negotiate the matter, but it is the builder who did not care about your harassment.
Following the state regulations, you are required to file the complaint online or offline.
Online: it is easier, as you just need to fill in the mentioned columns and submit the form, attaching the scanned copies or soft copies of the documents asked for.
Offline: it is not difficult either, you need to write down your claim and the reason in brief in your petition and annex the required documents and submit them to the RERA tribunal. A RERA lawyer can be helpful throughout the procedure for this, as a well-drafted petition plays a major role in analyzing and receiving appropriate remedies.
After filing, wait for the admission of your matter to the tribunal. If the tribunal finds that they need some more documents or clarity in the matter, they will inform you through email or letters sent to the address you provided, asking for the submission of those accordingly within a specific time.
Once admitted, the tribunal sends a notice to the builder, who has to appear before the tribunal and provide an answer to the claims arising. If the builder refuses to appear, the tribunal may hear only your side and pass an ex-parte decree providing a remedy directing the compensation for your loss, to be realized by the builder. Usually, the builders do not make the mistake of not replying in such a matter, as that may lead to losing their assets later.
On submission of the reply, a date for the hearing is issued, which shall again be notified to the complainant by email, or listed on the official website of RERA, about which you will get to know from your lawyer. Also, you can keep a check on yourself on the website of RERA in your state.
On the date of the hearing, the parties are heard by the tribunal and the documents are scrutinized. As in RERA, matters are quickly solved without extending to later dates. It is recommended to go fully prepared on the hearing date. Therefore, you must discuss the matter in detail with your lawyer before proceeding to the hearing. LawSimpl can be helpful in this situation, you can get legal advice in RERA matters just with one click.
Before announcing the final decision, the tribunal conducts the necessary investigation and scrutiny, for which you may be called again or asked to submit a document. After that, the final order is passed providing compensation for the direct monetary loss you are suffering for the delay and the builder shall be either instructed to deliver the property within a specific time, deliver another property of the same value, or return the money invested along with an interest.
Here is a list of some RERA websites for a few states:
Time-bound hearing in RERA
The power to hear the compensation claim is stated under Section 71 of the Act.
- To adjudicate compensation, the authorities are required to designate, in dialogue with the competent authority, one or more judicial officials who are or have been district judges to be adjudicating officers for maintaining an investigation in the manner prescribed, after providing any individual in question with a reasonable opportunity to be heard:
Provided, however, that any individual whose grievance is awaiting before the Consumer Disputes Redressal Forum, the Consumer Disputes Redressal Commission, or the National Consumer Redressal Commission, established under section 9 of the Consumer Protection Act, 1986 (68 of 1986), on or before the commencement of this Act, may, with the approval of such Forum or Commission, withdraw the complaint.
- The adjudicating official shall deal with the request for determining recompense under sub-section (1) as quickly and decisively as feasible and dispose of it within sixty days of receipt of the application:
The adjudicating officer needs to record his explanations in written form for not disposing of any such application within the said period of sixty days if it cannot be discharged within that period.
- While conducting an inquiry, the adjudicating officer shall have the authority to summon and compel any individual familiar with the facts and circumstances of the case to show testimony or produce any document that, in the adjudicating officer’s interpretation, may be beneficial for or relevant to the subject matter of the inquiry; and if, upon this inquiry, he is satisfied that the person has failed to comply with the terms of any of the sections specified in sub-section (1).
RERA brought a revolutionary change in the real estate scenario in India, and as the tribunals aim to provide speedy compensation, you must know your rights and legal standpoints before you initiate a tribunal matter. With the help of RERA consultants, your experience in real estate-related issues will be a lot better, leading to quick redressal.
Subject: Jurisdiction of RERA.
The Punjab RERA ruled that RERA is not applicable to projects whose applications were declined by the officials. Besides that, it was asserted that the authorities will not accept grievances against projects that have not been registered with RERA. The authorities also asserted the durability of a grievance in circumstances where the breaches happened prior to the Act’s regulation in this decision; such issues could be considered if only three conditions have been met:
- The alleged misconduct that happened prior to the Act’s implementation must persist to this day.
- The alleged misconduct must also violate the rules and regulations under RERA.
- To avoid an upsurge of litigation, no other discussion board or court should have resolved or left the case pending.
Subject: Whether RERA will hear cases that are pending or are currently being heard by other tribunals.
In this case, the buyer filed a claim against the builder for failure to provide possession of the property by the agreed-upon date. The builder claimed that the delay was caused by SEBI’s interim order. SEBI’s decision was appealed to the Securities Appellate Tribunal (SAT) by the developer.
The RERA in Gurugram, Haryana, affirmed that it will not hear any cases that are already pending before another tribunal or court since the particular issue was already being heard at SAT, so there is no requirement for the RERA to begin proceeding in this matter.
Subject: Whether payment and interest are refunded in the event of a delay in possession.
The complainant, in this case, claimed to have paid 97 percent of the total evaluation for the apartment. It was mentioned in the buyer-seller agreement that the apartment would be delivered by August 2016. However, a year afterward, the builder did not provide the apartment even after the filing of the complaint. EMI costs, along with interest, had begun to be deducted from the date of the agreed-upon handover. The complainants sought compensation as well as reimbursement of the paid amount and interest at a rate of 21% per year.
MahaRERA ruled that RERA has authority over agreements made prior to the enactment of the RERA Act since the issue was still in existence (i.e., post the commencement of the Act). Furthermore, it was ascertained that ownership without a certificate is unlawful. The authorities refunded the complainant in full, plus interest, and the cost of filing the complaint.