After the implementation of the RERA Act 2016, there are certain recent amendments made by State RERA Authorities, specifically in the MahaRERA as per the decisions given by the Bombay High Court. The main purpose behind enacting the Act was to bring relief to the homebuyers and purchasers and restrict the developers and builders from exploiting the purchasers due to lack of uniform laws. Even though, the RERA Act was enacted as a central legislation, it gave the liberty to all the states to make rules and regulations in accordance to the legislation within the specified time. Many of the states abide by the law, and adopted their respective State RERAs and found many loopholes.
So, the State RERAs have been empowered with the authority to make changes in their state specific RERA as per the needs and grievances of the homebuyers of their states. Further, efforts are being made to provide more teeth to the law by the concerned State Authorities. It was also mentioned by the Housing Minister, Mr. Hardeep Singh Puri that all the real estate projects will eventually come under the ambit of one singular law, once all the states have requisite infrastructure for such laws to function. It was also noted that ongoing projects will also be recognized and covered, once the states have appropriate redressal mechanism for the real estate sector.
Recent amendments made by State RERAs
There are many amendments inn various State RERAs, some of the vital changes are as follows-
- MahaRERA and Goa RERA have extended the project completion dates
It was recently updated on 10th August 2021, that the Maharashtra Real Estate Regulatory Authority (MahaRERA) have prolonged the deadline of the projects who had their completion dates on or after 15th April 2021 by period of 6 months. This was essentially done to provide support to the builders in the State who were heavily struck by the second wave of Corona virus. It proved to be beneficial move in favour of the builders.
Even the department of urban development in Goa have notified the rules for extension of completion deadlines of housing projects registered with Goa RERA. The builders have been provided with the additional 1 year to complete their pending projects.
- Law shall cover long-term lease properties
It has been the general notion, that real estate sector mentioned in the RERA Act 2016, is covering only the properties which are subject to sale and purchase. The Bombay High Court has given a decision against this notion. In recent judgment, the Bombay High Court has ruled that provisions of the RERA Act 2016, are also applicable to long-term lease or agreement to lease as well.
In the case of Lavas Corporation v. Girish Vasaan Panjawani & Others, it was stated that compensation had to be paid by the lessor, for delay of 6-7 years in possession of 3 apartments booked for a 999 year “agreement to lease”. The case was passed to the Adjudication Officer under the MahaRERA. The Court further reiterated, that only because the legislation excluded allotment when given under rental arrangement, shall not exclude the long term lease, as it would setback the main agenda of the Real Estate law. The Court even dismissed the appeals filed by the Lavasa Corporation which is responsible for building a township registered under the RERA Act.
The Court held the developing authority liable for the delay in possession and u/s 18 of the RERA Act, the compensation will be provided by the builder with interest for delay in giving possession as per the terms and condition of “agreement of sale” registered with the RERA. The Court has also imposed the implication with the developers for executing the “agreement of lease” who were suitably using the loopholes in the Act. Since, the case the applicant has paid 80% of an apartment’s purchase price and the 999 year lease deed is as good as sale.
The Adjudicating Officer under RERA had earlier held that since the agreement was not of “sale”, the applicant couldn’t seek for compensation from the builders. Nevertheless, the decision was overturned by the Bombay High Court by setting a landmark judgment and providing relief to the lessee who have registered with the development Authority and entered into the agreement of lease and were desperately waiting for the possession of the property.
- Force Majeure clause will not be pertinent
The MahaRERA has further ruled that developers are not permitted to use the force majeure clause for lack of approvals and financial crisis grounds. This order was passed against the Hindustan Construction Company’s subsidiary Lavasa Corporation which was going through its insolvency proceedings. The complaint was originally filed by one of the aggrieved homebuyers who had purchased the flat in April 2010 and the delivery of the flat was promised on or before April 2014, but the developer failed to do so by giving the order passed by the Environment ministry. The MahaRERA hence, has dismissed such grounds and ordered Lavasa to pay the principle amount to the buyer along with interest at the rate of 10.65%.
- Complaints against the unregistered projects will also be considered
As per one of the orders passed by the Bombay High Court, the MahaRERA will now permit the homebuyers to file complaints even against the unregistered builders and projects, even though this provision is against the central legislation of RERA Act 2016, but the High Court of Bombay has decided otherwise. The MahaRERA has uploaded a form under the “Source information” category and the consumers will have to pay Rs 5000 for registering their complaint against such unregistered projects.
- Need to obtain Occupancy Certificate in 3 months
The MahaRERA has given direction to the builders in Mumbai for obtaining an Occupancy Certificate (OC) for their buildings within period of 3 months or they will have to pay interest amount to the residents of the building. This order makes a huge impact for a city where there are more than 10,000 buildings not having an OC. It has been seen that in the last 2 decades, there are many violations made in FSI and other building rules and the civic body have denied them their OCs.
- Housing society can also be promoter
In another recent order of MahaRERA, it was stated that even a Housing Society can be considered as a promoter. The Regulatory Authority stated that High Court was inferring that society being the owner of land will not be responsible by depending on the Maharashtra Ownership of Flats Act definition of “promoter”. But post the enactment of RERA Act 2016, the legal position of a “promoter” has changed and upgraded. The definition of promoter given in the RERA Act 2016, is comprehensive and clarifies that “redevelopment project is covered and the accountability of persons constructing or converting buildings into apartments and those selling apartments to different persons shall be joint.”
- Homebuyers shall pay in accordance to the project’s progress
The Madhya Pradesh RERA has passed the order that a government agency irrespective of whether it is a Board or Authority, can charge the money in dated schedule only when the project is completed. But if the project is pending or ongoing, then the money demanded from purchasers has to be linked with the construction cost of the developers.
- Status of Past Projects
There has been a lot of debates and discussions about the status and recognition of past projects after the enactment of the RERA Act 2016. The homebuyers of past projects have shown agony and disappointment as the central regulation doesn’t include the past projects who have received their completion certificates at the time of implementation of the Act in May 2017.
However, the Chairman of Haryana RERA, Gurgaon Bench had stated that Real Estate law shall apply to the past projects also and anyone aggrieved by the developer or builder can approach the authority for the same. As per the understanding given by KK Khandelwal, the RERA is capable of adjudicating any real estate dispute between a seller and buyer, irrespective of the fact if the property has received a completion certificate or not before the Law was enforced. Prior, to this the Panchkula Bench of Haryana RERA also ruled in favour of the buyer who had registered a complaint against the builder for not complying to the terms of “Sale Agreement” in the project which was completed before the enactment of RERA Act.
The Bench referred to Section 11 of the RERA Act 2016, that a project promoter has to fulfill the sale agreement obligations and it will not exclude the projects which are not registered under RERA. Moreover, Section 34(f) of the Act states that Authority needs to ensure that all stakeholders of the Real Estate sector are fulfilling their obligations.
The Punjab and Haryana High Court has stayed the order of Haryana RERA, hiking the registration fee of brokers. The Court is catering to the grievances of Realty Agents, who had to move to court after the State Regulatory Authority hiked the registration charge of brokers without any reason.
The Haryana RERA has also ruled that an “individual” is different from his brand name. As per that interpretation, the Authority has asked many registered brokers in the State to pay Rs 2.5 lakh for their license renewal whereas an individual broker is responsible for paying only Rs 25,000 as registration fee. This, has been kind of unfair on part of the brokers, and hence such decisions have been brought on stay by the High Court of Haryana and Punjab.
- Homebuyers can remove developers from the project
The MahaRERA has issued a proper procedure for operating which allows the homebuyers to remove a developer, in certain cases where the project is delayed. In cases of delayed completion, the developer can be removed and the project is then handed over to an expert panel for completion. Such action is initiated only against the non-litigated projects. The Standard Operating Procedure (SOP) is issued under Section 37 of the RERA Act 2016 in reference to the Section 7 and 8 of the Act. Further, the Authority will only consider complaints received from an association of allottees and not specifically from single homebuyers for initiating such procedures.
- Homebuyer’s body writes to Centre for implementing RERA in West Bengal
The Association for People’s Collective Efforts has written a letter to the Housing Secretary, Durga Shankar Mishra, mentioning that the 2 month delay in implementation of RERA in West Bengal, has caused a lot of hardships to the homebuyers and this led to delay in justice for those considering for filing fresh cases. The move by the homebuyer’s body comes after 2 months of striking the West Bengal Housing Industry Regulation Act (WBHIRA) 2017 by the Apex Court marking it as unconstitutional.
The forum stated that indefinite adjournment is causing a lot of chaos and sufferings among the homebuyers as justice is being delayed for those who want to file fresh cases and have no place to go, until the Bengal RERA is enacted. This limbo has created a void for any kind of grievance redressal mechanism for homebuyers in West Bengal.
- CREDAI seeking extension for projects under RERA due to Covid-19 pandemic
The Industry Body CREDAI has requested to the Ministry of Housing and Urban Affairs for directing states to prolong the validity of all existing approvals of projects registered under RERA. In the letter to the Ministry, the Industry Body explicitly mentioned about the recurring issues of shortage of labour, disruption in chain of raw materials and other unpredictable reasons caused by the second wave of Covid-19, would amount to delay in overall lifespan of construction projects.
Thus, it can be concluded that no Act is free from errors, but the best part of the RERA Act 2016, is that the States have been given the liberty form their own rules and regulations in agreement to the central legislation. Every state has recognized their own issues and amended the laws accordingly in the benefit of the aggrieved party. These amendments, have led to fewer project launches and the focus has been more on execution of the existing ones. The developers have also become cautious and adhering to the compliances and provisions of RERA Act for avoiding litigation. The builders have been given extensions for completion of projects especially due to the Covid-19 situation. Hence, all these amendments are made in order to boost the real estate market.
This article is authored by Rhea Banerjee.