The Real Estate (Regulation and Development) Act (RERA), 2017 (the Act) is
enacted to ensure efficiency and transparency in the real estate sector and
provide a speedy redressal mechanism for protection of the interest of consumers
in the real estate sector. The Act is a beneficial legislation, the provisions
of which are in addition to and not in derogation of the existing laws such as
the Maharashtra Ownership of Flats Act, 1963 (MOFA), Indian Contract Act, 1827
and Specific Relief Act, 1908.
The definition of Promoter under section 2(zk) of the Act is much wider than the
definition under MOFA. The Act now also encompasses within its definition any
other person who acts himself as a builder, coloniser, contractor, developer,
estate developer or by any other name or claims to be acting as the holder of a
power of attorney from the owner of the land and such other person who
constructs any building or apartment for sale to the general public. Thus, the
definition covers any person who develops or is associated with the development
of a real estate project for commercial gain.
The Act now casts various obligations on a Promoter under Section 11, which were
absent under MOFA. Some of these obligations relate to post completion of a real
estate project and obtaining of a building completion certificate.
- formation of cooperative society or association of apartment owners,
- execution and registration of a deed of conveyance by the Promoter in
favour of the association formed by the allottees,
- structural defect liability for the stipulated period of 5 years, (d)
defective land title liability, etc.
The definition of a real estate project under section 2(zn) is not
restricted to real estate project which require registration under Section 3(1)
and means the development or conversion of an existing building or a part
thereof or the development of land for the purpose selling some or all of the
apartments, plots, buildings as the case may be.
Whilst the Act exempts certain real estate projects from the mandate of
registration, it does not however exempt any Real Estate Project or a Promoter
from the applicability of the Act. A promoter is not exempted from his
obligations merely because a real estate project is either exempted from the
requirement of mandatory registration or the registration has lapsed on account
of completion of the project or for any other reason. Thus, a Promoter, who has
constructed a building for commercial gain, cannot escape his obligations under
the Act by citing non-requirement or exemption of a registration of a Real
Estate Project under the Act.
The Maharashtra Real Estate Regulatory Authority, Mumbai (MahaRERA) has been
established under the act to discharge various functions in relation to real
estate sector including for the city of Mumbai. Under sub-sections (f) and (g)
of Section 34, Maha RERA is required to discharge functions so as to ensure
compliance of the obligations cast upon the Promoters under the Act and the
The Indian Real Estate Sector is anticipated to become a $1 trillion industry by
2030 making it the third largest globally and Mumbai is without a doubt the hub
of the Indian Real Estate Sector. Despite this, presently, the mechanism for
filing complaints with Maha RERA on its website does not provide an option to an
aggrieved person to file complaints seeking compliance of such obligations of
the promoters of any project which is not registered and / or which is exempt
Real Estate Projects exempted from the mandate of registration under the Act are
not exempted from the ambit and the rigour of the Act. Promoters of a real
estate project despite completion of a project and/or having obtained final
building completion certificate continues to be liable to perform the
obligations cast upon such promoter under the Act, more particularly under
sections 11(4), 14 and 17 of the Act.
An aggrieved person is entitled to file a complaint in relation to such
grievances under section 31 of the Act and the Authority is not only empowered
but is duty bound under Section 37 to issue directions for compliance of such
obligations and on failure by the promoter to comply, is entitled to enforce its
directions by levy of penalty etc. in accordance with the provisions of the Act.