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Society handover, redevelopment and RERA

Saturday, February 03, 2018

Before society members take the official handover from builder, it is necessary for them to make sure of having all the documentation. Advocate Tanmay Ketkar also examines the role of RERA in society matters

The shelter being necessity has evolved from caves to currently most predominant form of shelter, that is flat or unit in society. In prevalent system of real estate business, a promoter or developer purchases either land or its development rights and constructs buildings thereon. The promoter sells the units constructed to various individuals. In these transactions an individual is sold a unit for his exclusive enjoyment, however individual cannot enjoy the unit or residence unless and until all common areas and facilities are also properly maintained. This is the very purpose why the society of purchasers is formed.

Society formation
The main intention of forming a society is to own and maintain the property and common areas. Once the society is formed, role of promoter technically ends. Once the society is formed and affairs are handed over, the society is responsible for its management. However, if the society does not have required information or documents, sometimes it is difficult to manage. To avoid this, the society must have all the information and copies of important documents about the land and structure of the building.

The first annual general body meeting is the best opportunity for smooth handover from developer to society. It is mandatory to convene first AGM within three months of registration of society. In this first AGM, the developer is duty bound to formally handover the affairs, documents and information to the society. Even though it is legally mandatory, till date many of the societies do not have relevant records and papers. In initial years, the documents and records are not required, but when the building starts ageing and redevelopment is near, suddenly all the documents and information is required, that too urgently. To avoid this, all societies must verify their record and make sure that at least following papers are with them. If any of these are not available, the society must get it either from the developer or form concerned government office.

  • Society registration file and certificate
  • Bye-laws
  • Land records – 7/12 extract, property card etc.
  • Copies of all agreements of all units, including resell agreements.
  • Building permission, sanctioned plans, layouts, amendments
  • Completion certificate, occupation certificate
  • Drawing and plans of electric fittings, sewer lines, plumbing lines, etc.

Redevelopment and RERA
Redevelopment of housing society has always been crucial and complicated matter. With introduction of RERA, there is further confusion about the RERA and its applicability to redevelopment projects. Redevelopment of society and RERA can be understood in two important aspects. First is registration of project. According to RERA, if the redevelopment project does not involve fresh sales to outsiders or non-members, the project is exempted from registration. Second is complaining to MahaRERA. Currently, the MahaRERA is not accepting the complaint about the unregistered project, so if consumers from redevelopment project exempted from registration have grievance they cannot approach MahaRERA. The RERA Act itself does not distinct consumers on basis of registration of project, therefore distinguishing consumers by MahaRERA is wrong and needs to be corrected.

There is very high uproar about an order passed by MahaRERA in complaint filed by the members of society undergoing redevelopment, against the society and the developer. From that order it is speculated that the RERA and MahaRERA will not be applicable or be useful for the redevelopment projects. Before jumping to conclusion, we must peruse the said order in complaint No. 12024 against Shantiniketan society and matrix constructions. In order, the MahaRERA pointed out from the complaint that the dispute is between members, society and developer, further pointed out that the complainants failed to point out any contravention of RERA. On basis of these findings the complaint was dismissed. These findings literally clear the air. Further, the MahaRERA did not comment on merits of the case, the complainants have liberty to approach appropriate forum. It must be understood that the RERA is specialised Act and MahaRERA a specialised forum for handling cases within purview of RERA. Therefore, as a consumer or complainant it is prerequisite to identify contraventions of provisions of RERA.

Why RERA matters
A bird eye view of two important aspects of redevelopment and RERA will give a better picture about the legal environment. As a consumer, it is always better to purchase property in RERA registered project, which entitles the consumer to approach MahaRERA. As a member and society undergoing redevelopment, whether the project is registered or not, it is very necessary to follow strict legal provisions, draft the various consents, agreements etc with utmost care. Proper paper work to some extent guarantees positive results of litigations. If a member or society undergoing redevelopment is facing a dispute, before approaching any forum, the nature of dispute must be studied, and ultimate result required must be ascertained. Last, but not the least, the MahaRERA forum is there, however it is not expected to, and it cannot, entertain all kinds of disputes. If an aggrieved person wishes to approach MahaRERA, he must first have the answer to the question, What RERA provisions are contravened?

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