Rera act 2016 ppt final

Real Estate (Regulation And Development )Act, 2016.p ) ,

1

Manoj Pandit dAdvocate

(c) M & P Management Consultants Pvt. Ltd.

RERA ACT, 2016C ,2

Present Discussion ‐ RERA Act, 2016

Liabilities, Penalties, Prosecution & Appeals. Opportunities for Chartered Accountants. Current Practices v/s Proposed Practices. Registration of Real Estate Agents / Brokers.


RERA ACT, 2016C ,3

Present Discussion ‐ RERA Act, 2016

Liabilities, Penalties, Prosecution & Appeals.

The RERA Act, 2016 lays downs obligations on Promoters, Allottees and RealEstate Agents and also provides for consequences for defaults by way ofpenalty, fine and imprisonment for contravening those provisions by them.

Chapter VIII of the act containing Sections from 59 to 70 deals with such Chapter VIII of the act containing Sections from 59 to 70 deals with suchprovisions.


Penalties under RERA Act, 2016,4

Penalty for a promoterPenalty for a promoter

OFFENCE PENALTY

Contravention of the provisionsof Section 3 i.e.., making anyinvitation for sale without getting

Penalty up to 10% of estimatedcost of the project.For the continued defaultg g

the project registered with RERA(Section 59)

imprisonment up to three yearsor with further fine up to 10% ofthe cost , or with both

Contravention of Section 4 i.e..,failure to make application forregistration, submitting false

Penalty up to 5% of theestimated project cost

g , ginformation, failure to keep 70%in separate bank account etc.(Section 60)



OFFENCE PENALTY

Contravention of any other Penalty up to 5% of the estimatedprovision of theAct/Rules/Regulations(Section 61)

project cost

Failure to comply with thedirections/orders of theRegulatory Authority

Penalty for every day of thedefault which can cumulativelygo up to 5% of the estimatedg y y

(Section 63)g pproject cost

Failure to comply with the orders,decisions of the Appellate

Imprisonment up to three yearsor with fine for every day ofdecisions of the Appellate

Tribunal(Section 64)or with fine for every day ofdefault which can cumulativelygo up to 10% of the estimatedcost of the project, or with both.


p j ,


P lt f tPenalty for an agentOFFENCE PENALTY

Failure to comply with order ordirection of the Authority(Section 65)

Penalty for every day of defaultwhich can cumulatively go up to5% of the estimated cost of the

/building/ apartment or plot

Failure to comply with order or Punishment with imprisonment upp ydirection of the Tribunal(Section 66)

p pto one year or with fine for eachday of default which cancumulatively go up to 10% of thecost of the building/ apartment orplot, or with both



P lt f All ttPenalty for Allottees

OFFENCE PENALTY

Failure to comply with orders ofthe Authority

Penalty per day of the defaultwhich can cumulatively go up toy

(Section 67)y g p

5% of the cost of building/plot orapartment

Failure to comply with decision or Punishment of imprisonment up toFailure to comply with decision ororders of the Tribunal(Section 68)

Punishment of imprisonment up toone year or with fine for each dayof default cumulatively going upto 10% of the cost of building/to 10% of the cost of building/apartment or plot, or with both.


APPEALSAPPEALS8

The Act stipulates that questions that come before the RERA must bedealt with “as expeditiously as possible” and must be disposed withinp y p p60 (sixty) days from the date of receipt of the concerned application(with reasons to be recorded in writing, if disposal does not occurwithin the said period) Appeals from the directions of the RERA lie towithin the said period). Appeals from the directions of the RERA lie tothe Appellate Tribunal and such appeals must also be dealt withexpeditiously, though it is sufficient if the Tribunal “endeavors” todispose of the appeal within 60 (sixty) days of the date of receipt ofthe appeal.


APPEALSS9

Aggrieved party

Authority or adjudicating

ffi

Direction RE Appellate

Within 60 days from thepartyofficer Order tribunal from the copy of order/D

In respect of matters pending

Required to adjudicate caseswithin 60 days from date ofreceipt of application & if not

In respect of matters pending before Consumer Courts, the appellants have the option to withdraw such complaint and file receipt of application & if not

possible record reasons

Within 60

withdraw such complaint and file an application before the adjudicating officerPre Deposit at REAT Level:

High Courtdays from the copy of order/D

pFor promoters30% of penalty or 100% of interest & compensation to the allottees


APPEALSAPPEALS10

Appeals to be heard by Real Estate Appellate Tribunal Appeals to be heard by Real Estate Appellate Tribunal

Any person aggrieved by any direction or decision or order made by the y p gg y y yAuthority or by an adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal within a period of sixty days from the date of the order. The Appellate Tribunal may entertain any appeal after the expiry ofthe order. The Appellate Tribunal may entertain any appeal after the expiry of sixty days if it is satisfied that there was sufficient cause for not filling it within that period.

While filing the appeal, the promoter has an obligation to deposit at least thirty per cent of the penalty, or such higher percentage as may be y p p y g p g ydetermined by the Appellate Tribunal, or the total amount to be paid to the allottee, including interest and compensation imposed on him, if any, or with both, before the said appeal is heard.


both, before the said appeal is heard.

APPEALSAPPEALS11

The Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 but shall be guided by the principles of natural justice.

The Appellate Tribunal shall also not be bound by the rules of evidence The Appellate Tribunal shall also not be bound by the rules of evidence contained in the Indian Evidence Act, 1872.

Every order made by the Appellate Tribunal under this Act shall be executable by the Appellate Tribunal as a decree of civil court, and for this purpose, the Appellate Tribunal shall have all the powers of a civil court.pp p


APPEALSAPPEALS12

APPEAL TO HIGH COURT

Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within a period ofTribunal, may, file an appeal to the High Court, within a period of sixty days from the date of communication of the decision or order of the Appellate Tribunal, to him, on any one or more of pp , , ythe grounds specified in section 100 of the Code of Civil Procedure, 1908.


Respontunity for CA under RERARespontunity for CA under RERA13

It shall be the responsibility of the Chartered Accountant to provide It shall be the responsibility of the Chartered Accountant to provide Certificates/Letters/NOC’s as required from time to time during various stages of construction of the project and shall be given to the promoter without any delay and/or within 7 days on request of the promoter./ y q p

The Chartered Accountant shall give various Certificates/Letters as per prescribed forms under RERA act, rules and regulations there under or as per any other Lawforms under RERA act, rules and regulations there under or as per any other Law for time being in force.

The Chartered Accountant shall make himself aware of the RERA act rules and The Chartered Accountant shall make himself aware of the RERA act, rules and regulations and shall perform all his duties prescribed under the said act, rules and regulations within the time period stipulated.

The Chartered Accountant shall furnish and submit all Certificates, Audit reports and any other papers as required to be submitted by the Real Estate Regulatory Authority.


Authority.

Respontunity for CA under RERAp y14

Registration of RE projects with RERA

Key Role of CA in RERA

Pre‐withdrawal Certification

d

Accounts Audited

Based on PoC

Representation Services

before AT or RERA th it


RERA authority

Respontunity for CA under RERAp y C15

Amounts from the separate account maintained for deposit of amountsreceived from allottees shall be withdrawn by the promoter after it is certifiedby an engineer , an architect and chartered accountant in practice that thewithdrawal is in proportion to the percentage of completion of the project.

The promoter shall get his accounts audited within six months after the endof every financial year by a chartered accountant in practice, and shall

d t t t f t d l tifi d d i d b h CA D iproduce a statement of accounts duly certified and signed by such CA. Duringthe audit it shall be verified that the amounts collected for a particularproject have been utilized for the project and the withdrawal has been incompliance with the proportion to the percentage of completion of theproject.


Opportunities for CA Under RERAOpp C U16

Chartered Accountants can be appointed as legal representative before the Appellate Tribunal or the Regulatory Authority.

Can be appointed as member of Central Advisory Council, Chairperson or member of RERA Technical Member of Real Estate Appellate Tribunalmember of RERA, Technical Member of Real Estate Appellate Tribunal


Opportunities for CA Under RERAOpp C U17

S d l f CA Secondary role of a CA

Application for Registration of real estate project ‐‐‐ Application for Registration of real estate project Application shall be made in prescribed form with the prescribed fee and shall include details of promoters, projects launched in past five years,

l l / ifi j l l llapproval letters/certificates to commence project, lay out plan, allotment letter, agreement for sale proforma, garage , declaration to legal title etc.

Registration of real estate agents ‐‐‐ No real estate agent shall be able to facilitate the sale or purchase in a real estate project registered without obtaining registration under new Act The registration shall be given by theobtaining registration under new Act. The registration shall be given by the Authority for the entire State/ Union Territory.


Current Practice(MOFA) Vs Proposed N P ti (RERA)New Practice (RERA)

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SN S li t I P i i i MOFA 1963 P i i i RERA 2016SN Salient Issues Provision in MOFA, 1963 Provision in RERA, 2016

1 Sale of parking Not permissible Only covered car parking/ l dspace / Garages including

mechanical car parks

2 Carpet area Balcony included and net Includes:‐ Area covered byusable area was permissible the internal walls of the

apartmentExcludes:‐ Area covered bythe external walls, exclusivebalconies, verandah areas,service shafts and terraces

i l d d 3% lnot included. 3% toleranceallowed. Compulsory re‐measurement of flat at thetime of possession


time of possession

Current Practice(MOFA) Vs Proposed New Practice (RERA)New Practice (RERA)

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SN Salient Issues Provision in MOFA, 1963 Provision in RERA, 2016

3 Before execution of Not to exceed 20% Not to exceed 10%3 Before execution of agreement

Not to exceed 20% Not to exceed 10%

4 Proportionate charging of common

Chargeable Chargeablecharging of common areas

5 Deemed Applicable within Six Applicable within threeconveyance months of notice. months of completion

certificate of real estateproject if date has not been

ifi d i th t tspecified in the agreement tosale

6 Defects period 3 years 5 years



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7 Refund of money only if delay for possession then refund of money

Simple interest @ 9% p.a. from the date Sums are received.

Simple interest @ 2% + prevailing MCLR rate of the State Bank of India from the

with interest to the buyer

date sums are received.

8 Formation of society As soon as minimum Within 3 months of date of number of persons (60%) require to take flats. Within 4 months of 60%

51% of allotees that have booked their apartments

occupation.



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9 C If i d ti ithi If i d ti d th f9 Conveyance If no period mention within 4 months of formation of society.

If no period mentioned then forsingle building within 3 monthsof issue of occupationcertificate or 51% of totalcertificate or 51% of totalnumber of allotees in thebuilding / wing having paid fullconsideration whichever isconsideration whichever isearlier. In case an apex bodyhas to be formed if no date isagreed upon the 3 months fromagreed upon the 3 months fromthe completion of the last Bldg.



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SN Salient Issues Provision in MOFA,1963

Provision in RERA, 2016

10 E t i f i N il bilit f i W i il ti10 Extension oftime for deliveryof flat

i. Non availability ofsteel, cement, otherbuilding, water orelectric supply

i. War, civil commotion oract of God.

ii. Any notice, order, rule,notification of theelectric supply.

ii. War, civil commotionor act of God.

iii Any notice order

notification, of thegovernment and/orother public orcompetent authorityiii. Any notice, order,

rule, notification, ofthe governmentand/or other public

competent authority.iii. Excludes period of

registration where actualconstruction not carriedand/or other public

or competentauthority.

construction not carriedby promoter due tospecific stay, injunctionorder to the project by


p j y


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Note‐the provisions of this any court of law tribunalNote‐the provisions of this proviso are not mandatory but negotiable.

any court of law, tribunal, competent authority, statutory authority, high power committee etc. or due to othercommittee etc. or due to other mitigating circumstances as decided by the RERA authority.iv. If authority is convinced ythat due to no fault of the promoter there has been a delay he can get extension for the registration of the project



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11 Payment terms Very stringent/Not practical Liberal and practical for11 Payment terms Very stringent/Not practicaltherefore no developersused to follow.

Liberal and practical forpromoter and allotees

12 Escalation Increase in local taxes,water charges, insuranceand such other levies, if

Escalation free except dutyincrease in account ofdevelopment charges/ chargesand such other levies, if

any, imposed localauthority/govt.

development charges/ chargesto authority.

13 Share of outgoings In proportion to floor areaof flat

Proportion to carpet area.



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14 All receipts Mentions maintain a 70% to be maintained withpseparate account. designated account and to be

withdrawn as per progress ofconstruction.

15 Project potential Till conveyance/ societyformation any FSI increasewould belong to developer

Disclosure to be made aboutexpectation of FSI proposed tobe utilized includingwould belong to developer be utilized includingexpectation of future FSI orelse consent of 2/3 rd allotteesrequiredq

16 Interest Developer’s discretion M.C.L.R. plus 2% of SBI BankRate.



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17 Termination Developer was entitled to Promoter entitled to terminate17 Termination Developer was entitled to terminate after notice on default of payment

Promoter entitled to terminate after 3 installments not paid and notices given. Refund must be made within 30 days.be made within 30 days.

18 Specification of materials

Generic declaration would suffice

To mention brand, or price of product (if unbranded).

19 Registration of project

Not required Compulsory before any advertisement or receipt of payment



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20 Of b ildi Of b ildi d i l20 Insurance Of building Of building and title

21 Disclosure To be available on site On the site and website

22 Title Liability Up to conveyance is done Liability in perpetuity

23 Offences & Penalties

Imprisonment and nominal files were prescribed

Heavy fine linked with up to 10% of estimated project costPenalties files were prescribed 10% of estimated project cost and imprisonment only if directions of authority not followed for both developers as followed for both developers as well as allottees.



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24 Consent to change sanctioned plans

Consent not required unless individual unit is affected.

Consent of 2/3 alloteesrequired for making any major modification in sanctioned plans or revised plans.

25 Development of project and amenities

Phase wise development not mentioned

Detailed phase wise development permitted along with different date of possessions for apartment and amenities



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26 Unfinished project No provision of take over Authority with approval of26 Unfinished project No provision of take over Authority with approval of state government may allow development of project by any other person including firstother person including first right to take over and complete the project will rest with allottees who has purchased papartment in the said project.

27 Marketing Agents Not required to be registered

Registration is mandatory with RERA authority.


Definition of Real Estate Brokers/ Agents as per the new law/ Agents as per the new law

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“Real Estate Agent” means any person, who negotiates or acts on behalf ofone person in a transaction of transfer of his plot, apartment or building, asthe case may be, in a real estate project, by way of sale, with anotherperson or transfer of plot, apartment or building, as the case may be, of anyother person to him and receives remuneration or fees or any other chargesp y gfor his services whether as commission or otherwise and includes a personwho introduces, through any medium, prospective buyers and sellers toeach other for negotiation for sale or purchase of plot, apartment oreach other for negotiation for sale or purchase of plot, apartment orbuilding, as the case may be, and includes property dealers, brokers,middlemen by whatever name called.


Registration of real estate agentsg g31

Acceptance on fulfillment of all

condition , within such

Make

period

Deemed to be Registered if within

Grant a Single Registration for entire State of Make

Application for

Registration

Registered if within the specified period no

communication of acceptance or

Union territory

Registration

Reject if does not

acceptance or rejection received

O t it fReject if does not confirm to the

provisions of the Act

Opportunity of being heard

has to be given


Registration of real estate agentsRegistration of real estate agents32

Section 9(1) All real estate agent shall not facilitate the sale or purchase of or act on(1) All real estate agent shall not facilitate the sale or purchase of or act on

behalf of any person to facilitate the sale or purchase of any plot, apartment orbuilding, as the case may be, in a real estate project or part of it, being the partof the real estate project registered under section 3 being sold by theof the real estate project registered under section 3, being sold by thepromoter in any planning area, without obtaining registration under thissection.

(2) Every real estate agent shall make an application to the Authority forregistration in such form, manner, within such time and accompanied by suchregistration in such form, manner, within such time and accompanied by suchfee and documents as may be prescribed.



(3) The Authority shall, within such period, in such manner and upon satisfying itself of the fulfilment of such conditions, as may be prescribed—

(a) grant a single registration to the real estate agent for the entire State of Union territory as the case may be;Union territory, as the case may be;

(b) reject the application for reasons to be recorded in writing, if such application does not conform to the provisions of the Act or the rules or regulations made there under:Provided that no application shall be rejected unless the applicant has beenProvided that no application shall be rejected unless the applicant has been given an opportunity of being heard in the matter.



(4) Whereon the completion of the period specified under sub‐section (3), if the applicant does not receive any communication about the deficiencies in his application or the rejection of his application he shall be deemed to haveapplication or the rejection of his application, he shall be deemed to have been registered.

(5) Every real estate agent who is registered as per the provisions of this Act or the rules and regulations made there under, shall be granted a registration number by the Authority, which shall be quoted by the real estate agent in

l f ilit t d b hi d thi A tevery sale facilitated by him under this Act.

(6) Every registration shall be valid for such period as may be prescribed, and ( ) y g p y pshall be renewable for a period in such manner and on payment of such fee as may be prescribed.


Registration of real estate agentsg g35

Breach of any of the terms and conditions

Real Estate Agent

specified and any rules or regulations.

Authority is satisfied that such registration Revoke Agent

Registered has been secured by the real estate agent through misrepresentation or fraud

Suspend

OpportunityOpportunityof being heard

has to be given


given


(7) Where any real estate agent who has been granted registration under thisAct commits breach of any of the conditions thereof or any other terms andconditions specified under this Act or any rules or regulations made thereunder, or where the Authority is satisfied that such registration has beensecured by the real estate agent through misrepresentation or fraud, theAuthority may, without prejudice to any other provisions under this Act,revoke the registration or suspend the same for such period as it thinks fit:Provided that no such revocation or suspension shall be made by the AuthorityProvided that no such revocation or suspension shall be made by the Authorityunless an opportunity of being heard has been given to the real estate agent.



Real estate agent

Individual –Rs 10,000

FeesIn writing prior to engaging in any

Application

(applicant) Others –Rs 1,00,000g g g yactivity

Details of all civil and i i l di

Name of EnterpriseR i t d Add

Particulars of R i t ti d

criminal cases pendingAuthenticated copies of proof of address, branches along with telephone fax &Registered Address

(Place of business)Type of EnterpriseRegistration No (PAN

Registration under any other law Authenticated Copies of partnership deeds AOA

IT Returns of last 3 FYS

along with telephone, fax & email id.

Registration No (PAN Aadhar, Din No etc)

partnership deeds, AOA, MOA.

Recent Colour Photographs of Real Estate Agent

Declaration of Income of last 3 FY’s if the applicant was exempted from filing


Recent Colour Photographs of Real Estate Agent Individual, All partners , All Directors as applicable

returns


1) Every real estate agent required to be registered as per sub section (2) ofsection 9 shall make an application in writing,‐ in case of registered realestate projects forthwith and in any case prior to engaging in any activityrelating to marketing, advertising sale or purchase of any apartments.

2) The following documents shall also be submitted along with the applicationnamely:‐

a) Brief details of his enterprise including its name, registered address of placeof business, type of enterprise (proprietorship firm, societies, partnership,company etc.); Registration numbers, PAN , Aadhar Card No, DIN, as the casemay be, under which returns are required to be filled with statutoryauthority;



b) Particulars of registration obtained under other laws, and rules andregulations, as the case may be, along with the authenticated copy ofpartnership deeds, memorandum of association, articles of association, etc;

c) Recent colour photographs of the real estate agent if an individual and of allc) Recent colour photographs of the real estate agent, if an individual and of allthe partners, directors, trustees, etc. Including persons in service or assignedwork expected on a real estate agent, in case of other entities;

d) Income tax returns for last 3 financial years preceding the application or incase the applicant was exempted from filing returns in any of the 3 yearspp p g y ypreceding the application, a declaration to such effect;



e) Authenticated copy of the proof of address of the principal place of businesse) Authenticated copy of the proof of address of the principal place of business, number of branch offices if any along with contact details including telephone number, fax number and email address; and

f) Details (if any) of a real estate projects and their promotes on whose behalf he has acted as real estate agent 5 years;he has acted as real estate agent 5 years;

g) Details of all civil and criminal cases pending against him if an individual or any of the partners, directors, trustees etc. In case of other entities;

h) Authenticated copies of all letter heads; rubber stamp imagesh) Authenticated copies of all letter heads; rubber stamp images, acknowledgement receipt proposed to be used by the real estate agent;


i) Such other information and documents, as may be specified by regulations.


3) (i) A sum of rupees ten thousand, in case of applicant being an individual; and (ii) rupees one lakh, in case of the applicant being other than an individual.

4) The fees for registration of real estate project shall be paid thro gh NEFT or4) The fees for registration of real estate project shall be paid through NEFT or RTGS system or any other digital transaction mode.

5) The real estate agent up on being engaged by the promoter under clause (f) of sub‐section (2) of section 4 for a real estate project shall maintain and preserve books of accounts records and documents separately for each suchpreserve books of accounts, records and documents separately for each such real estate project.


Duties real estate agentsg42

Every RE agent is required to be registered wit h RERA for Facilitating saleEvery RE agent is required to be registered wit h RERA for Facilitating sale, purchase of any RE project

RE Agent shall not facilitate purchase or sale of RE project not registered with RERA

Maintain and presence books of accounts, records and documents as may be prescribed

Not involve in any unfair trade practices

Facilitate the possession of all information and documents to the allottees


Thank youy43

MANOJ PANDITMANOJ PANDITAdvocate

M & P Management Consultants Pvt. Ltd.A-305 Durian EstateA 305, Durian Estate, Goregaon Mulund Link Road,Goregaon East, Mumbai – 400063g , 4 3Mail: [email protected]: 9820491848
