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Does RERA apply to plotted development scheme?

Friday, November 10, 2017
By Ramesh S. Prabhu

Q. In a redeveloped project, building construction is over, OC is still not received, possession not given. Can a person purchase a flat from original member of the society under Real Estate (Regulation and Development ) Act, 2016 ( RERA)? What are the risks to the buyer?
A.
Since OC has not come, it is considered as ‘ongoing project’, and hence the promoter is required to register this project under RERA. Every person whom the promoter allots the flat in exchange of old flat or on account of sale of free area both are considered as Allottees under RERA. Allottees are defined under section 2 (d) as under :

‘’Allottee’’ in relation to a real estate project, means the person to whom a plot, apartment or buildings, as the case may be, has been allotted, sold or otherwise transferred by the promoter, and includes the person who subsequently acquires the said allotment through sale, transfer or otherwise, but does not include a person to whom such plot, apartment or building, as the case may be, is given on rent;"

Real Estate projects include redevelopment of housing society building in which some flats are made available for sale. Therefore, in the given case, if the original member has transferred or sold the allotted flats on resale to another person during under construction, such new purchaser is deemed to be Allottee. Thus the promoter is liable for all the obligations of promoter to new Allottees also. Thus new purchaser is fully protected under RERA.

Q.Will resale of investor flats through unregistered broker in RERA registered project or unregistered project or old buildings be permissible without any consequences under RERA?
A.
The brokers need not be registered for resale flats. In the case of investor flats, which are already registered in the name of investor, they become resale flats. Here promoter is not involved in the resale. In other words resale and resale brokers are not covered under RERA. In case investor had not registered the agreement in his name and through builder, it is sold as First sale, in such situation brokers need to be registered with RERA and listed with particular project as broker.

Q.In a case where a builder has received completion certificate or occupancy certificate and there are, out of 20 units, 9 unsold, will he be required to register under RERA?
A.
Since the OC has come before 30th April 2017, as on the date of commencement of the Act on 1st May 2017, it is a completed project and therefore, does not require registration under RERA. However, any agreement for sale effected after 1st May need to be executed as per RERA Rules only. as the RERA is effective with all Rules in place as on 1st May 2017. Registration exempted under RERA under section 3 does not mean, the other sections of RERA are not applicable to the promoters who do sale after 1st May 2017.

Q.Does RERA apply to plotted development scheme?(without any construction of building but only sale of NA plots) What will be the "occupation/completion certificate" provision in such plotted schemes?
A.
The plotting is approved by the town planning or the collector of the district as per the delegation of power given under Maharashtra Regional Town Planning Act, 1966. When a plotting is approved, certain common amenities are shown or agreed to be provided by the developer in the agreement for sale such as common road, garden, swimming pool, water connection, electric connection for common area and individual plot, gym, club faculties, compound, etc. As I understand, when you do get any such area built, you do get a completion certificate from local authority. For e.g. Gym or Club house OC. If that is not provided, internal road completion certificate or post electric supply connection, water connection is provided. Also, town planning authority gives initial approval with few conditions and then final approval of layout after the facilities are constructed. At least, the developer should complete the common facilities and individual facilities as per agreement for sale and as per the details provided at the time of registration of real estate project and submit the Architect certificate as per form 4 given in Maharashtra Real Estate Regulatory Authority (General) Regulations 2017. In this certificate of architect, the completion of facilities provided by respective authorities are be incorporated and certificate is to be issued. This has to be submitted to town planning authority and then uploaded to RERA website for project completion.

(Ramesh S. Prabhu is Chairman, Maharashtra Societies Welfare Association)

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