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RERA: A ray of hope for stalled projects

Friday, June 23, 2017

Under RERA, which came into force on May 1, developments including the redevelopment projects are required to be compulsorily registered with RERA by July 31. Failure to do so will cost the builder heavily. Ramesh S. Prabhu explains how this helps projects stuck in limbo

There are many buildings, especially in the city of Mumbai, where the developers have taken the IOD and commencement certificates. The buildings are demolished and the work has stopped at middle way. They have stopped the rent and some of the flats have been sold. The society and its members are not in a position to take the next course of action. Any legal action means the redevelopment will be in a big litigation and wait for the developer to come out with some workable solution.

(1)    Some developers introduce the new partners and the society accepts such suggestion out of necessity.

(2)    Some developers suggest for reducing the offers in terms of lesser area and not to demand further corpus. Many societies have accepted such lower offers.

(3)    Some of the developers have been taken to the court by the flat purchasers where the courts have given stay order for not to create third party rights and many more such situations.

RERA can help
Is there any relief under the Real Estate (Regulation and Development) Act, 2016 which has been effectively implemented in Maharashtra from 1st May 2017.As per section 3 of the RERA, 2016, all the developments including the redevelopment projects are required to be compulsorily registered with RERA by 31st Jul, 2017. 
Failure to register the project before this date, shall render the developer to pay penalty of 10% of the estimated cost of the project as determined by the Authority. If such default is continued, further penalty of 10% of the estimated cost of the project or imprisonment of 3 years or both is provided in the RERA.

At the time of registration of the project, the developer needs to provide the date by which the project shall be completed and the possession shall be handed over to the allotees in which the existing society members are also included. The developer also is required to submit the stage wise completion of the project, milestones to complete the project. There will be quarterly updating of the project details. Any aggrieved person also may file a complaint against such developer and get the necessary action initiated against such erring developers.

Society has a say
Since the entire regulation is to protect the interest of the allotees including the existing flat owners, the society should facilitate and insist the developers to register with RERA at the earliest. If required a letter to advise the developers to register under the same be initiated. After the registration, if the developer still does not undertake the work as desired, a complaint can be lodged for the cancellation of the registration as provided under section 7 of the RERA and then as contemplated under section 8 of the Act, the society may demand the project be handed over to them for due completion.

Thus, the developer who is not performing can be removed easily with the help of Real Estate Regulatory Authority. Redevelopment can be started once again in such societies which could not decide about the next course of action.

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

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