Status as on 20/01/2020
According to the Real Estate (Regulation and Development) Act, 2016 (RERA) Act, the Government of Maharashtra has established the Maharashtra Real Estate Regulatory Authority (MahaRERA) under Notification 23 dated 8th March, 2017 to regulate the real estate zones.
MahaRERA has been much ahead than other state authorities in the implementation of RERA and has set the benchmark for other states to emulate. Since its inception, MahaRERA has been a model for other states. Recently, MahaRERA proved it yet again when suo motu action was taken for the first time against large group of promoters.
Under the effective supervision of the MahaRERA Authority, it is expected from the Promoters to duly comply with the compliances and obligations under the Act. Otherwise you can be next in line to be booked by MahaRERA against whom suo motu cognizance can be taken for non-compliance of provisions of MahaRERA.
Here at Centrik we enumerate the compliances that a promoter has to comply with:
Registration of the project:
All commercial and residential real estate projects must be registered, except the following:
- Where the area proposed for development does not exceed 500 square meters.
- Where the number of proposed houses to be developed is not more than 8 inclusive of all the phases.
- If the promoters who have received a certificate of completion of construction before the enactment of this law.
- Under this Act, no renewal, repair or redevelopment where there is no sale, advertisement or new allotment of a house, plot or building.
It is important to note that no promoter shall advertise their real estate project or part thereof, market the sale proceedings, register the beneficiary’s name, prepare for sale or sale, or invite them to buy a plot, house or building without registering with the Real Estate Regulatory Authority. In the ongoing projects, promoters who have not received the Certificate of Completion or Occupation Certificate following the approved plans must register their real estate with the Real Estate Regulatory Authority.
As per the law, if the promoter does not register the project, punitive action would be taken against him, subject to a penalty of up to 10% of the estimated cost/cost of the project. If the promoter continues to violate the law, he will be liable for punishment with up to three years imprisonment or a fine of up to 10 percent of the project cost or both.
Registration of Agents
No real estate agent shall facilitate the sale or purchase of or act on behalf of any person to facilitate the sale or purchase of any plot, apartment or building, as the case may be, in a real estate project or part of it, being the part of the real estate project registered under section 3, being sold by the promoter in any planning area, without obtaining registration under this section.
RERA Separate Bank Account (SBA)
The promoter shall submit a declaration, supported by an affidavit, stating that 70% of the amounts realized for the real estate project from the allottees, from time to time, shall be deposited in the Separate Bank Account (SBA) to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for construction of the project in proportion to the percentage of completion of the project.
Under Rule 5 of the MahaRERA Rules, for amount to be withdrawn from time to time by the promoter from the SBA in respect of each real estate project, the Promoter shall submit three certificates certified by an Architect in Form-1, by an Engineer in Form-2 and a Chartered Accountant in Form-3 to the scheduled bank operating the SBA.
- Registration of individual projects (on-going and new projects) exceeding 500 square meters or if the number of apartments exceeds eight apartments.
- Stage wise progress update of the project, including necessary documents, sanctioned plans and permissions to be uploaded online.
- Compulsory registration for real estate agents (Agent).
- Deposit of 70% monies received towards the project cost in a separate designated bank account.
- Annual audit of the project accounts.
- The concept of co-promoter introduced.
- Advertisement of projects in whatever form, cannot be done without registering the project.
- Promoter to provide the tentative date for completing the project.
- Penal provisions in case of misrepresentation, false information or delay in handing over possession to the home buyers.
Promoters are advised to ensure that their project information is always up-to-date Failure to make quarterly project update will violate Section 11 of the Real Estate (Regulation and Development) Act, 2016 and would make the concerned promoter liable for penal action.
Updates are generally required in the following sections:
- Project Cost (Actual Total Amount )
- Document Upload (Documents, Certificates, Details of encumbrances etc.)
- Building Details (Number of apartments Booked/Sold/Allotted)
- Task/Activity (Percentage of Work)
- Common Areas and Facilities (Units Booked, Work Completion Percentage)
- Project Professional Details (Real Estate Agent etc.)
- Promoter(Land Owner)/Investor Details
- Photographs of key stakeholders of organization are small / missing / incorrect. Please upload the required photographs These two new fields were added to the application in December, 2017. Application registered on previous date need to update the below two fields.
- Building-wise Completion Date: Please update the building-wise completion date (This date cannot be beyond the Revised Proposed date of Completion) in the Add building tab under Project details.
- Street Name and Locality: These are now added in the Project Details address section. You are requested to update the same while updating the project details.
The major point to be noted here is that Certificates of CA (Form 3), Certificates of Architect (Form 1) & Certificates of Engineer (Form 2) need not be uploaded every quarter on the website, but are required to be maintained at the end of the promoter and submitted to the banks for getting release of money from the separate account.
Certificates of Architect (Form 4): As per the Regulation 3 of the General Regulations of MahaRERA on this is required to be uploaded on completion of the project. In case, you are unable to upload Form – 4 for your project due to whatsoever reasons including non-receipt of Occupancy Certificate, you need to apply for extension of your project on the MahaRERA application portal as per Section 6 of the Act. You are also kindly requested to update project details especially “Task/Activity” Section as per the latest status of your registered project.
Certificates of CA (Form 5): The annual report on statement of accounts, in Form 5 (issued by the third proviso to section 4(2)(l) of the Act) duly certified and signed by the chartered accountant who is the statutory auditor of the promoter’s enterprise are required to uploaded at the end of the financial year.
FINANCIAL DISCIPLINE AND COMPLIANCE
Agreement for Sale
The promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force.
a) The agreement for sale referred to in sub-section (1) shall be in such form as may be prescribed and shall specify the particulars of development of the project including the construction of building and apartments, along with specifications and internal development works and external development works, the dates and how payments towards the cost of the apartment, plot or building, as the case may be, are to be made by the allottees and the date on which the possession of the apartment, plot or building is to be handed over, the rates of interest payable by the promoter to the allottee and the allottee to the promoter in case of default, and such other particulars, as may be prescribed.
b) Further, Rule 10(1) of the MahaRERA Rules r.w.s 13(2) of the Act, provides for a model form of Agreement (annexure A of the MahaRERA Rules).
Furthermore, the MahaRERA Rules, states that nothing in Rule 10(1) shall be deemed to prevent the promoter to modify the model form of Agreement of Sale provided that such agreement conforms with the provisions of Section 13(2) of the Act and the rules and regulations made there under.
Formation of Society
The promoter shall enable the formation of an association or society or co-operative society, as the case may be, of the allottees, or a federation of the same, as the laws applicable.
Further, as per Rule 9(1) of the MahaRERA Rules:
Where a Co-operative Housing Society or a Company or any other legal entity of allottees is to be constituted for a single building not being part of a Layout; or in case of layout of more than one building or a wing of one building in the layout, the Promoter shall apply in that behalf to the Registrar for Registration of the Co-operative Societies Act, 1960 or a Company or any other legal entity, within three months from the date on which 51% of the total number of allottees in such a building or a wing, have booked their apartment.
Disclaimer– The above article is based on the personal interpretation of related laws, which may differ from person to person. The readers are expected to take expert opinion before relying on this article. For more clarification, the readers can be expected at firstname.lastname@example.org or email@example.com