Purchasing a house is one of the most expensive investment which an individual makes in his entire lifetime. In most cases, a Home Loan is sought from a bank or NBFC to realize this
purpose. Paying such a large amount as the cost of an apartment upfront is next to impossible for
the common man.
The loan seeker thus binds himself to a commitment of repaying the principal
loan amount along with interest for the next 15 to 20 years through Equated Monthly
Installments (EMIs). The years of immense hardship which an individual goes through to
purchase his dream house is evident thereby. Unfortunately many such dreams have been
shattered in the past by powerful and unscrupulous builders/developers due to either their
negligence of their nefarious intentions.
Such developers breached their promises either by not
delivering possession of the property within the time stipulation or by delivering substandard
quality flats. At times units smaller than those booked by the allottees were delivered. Before the
advent of the Real Estate Regulation & Development Act, 2016 (RERA), the above
circumstances would invite legal action via either Civil Courts, Criminal Complaints or
Consumer Complaints as the case may be.
However, compared to the property purchaser, the
developer/builder evidently have much more financial strength to bear litigation costs which can
drag for many years till it arrives at a conclusion. The RERA legislation has been carefully
drafted and enacted keeping all these points in mind.
In the state of Maharashtra, the Maharashtra Real Estate Regulatory Authority came into effect
on 1st May 2017 in compliance with and to give effect to Section 20 of the Real Estate
(Regulation & Development) Act 2016. This section required each state to have their own Real
Estate Regulatory Authority to facilitate Real Estate transactions in a transparent manner, to
protect the interests of the consumer and also to provide a speedy grievance redressal mechanism
to both Promoters/Developers as well as the Allottees. This article has been drafted specifically
to address the legislation and its enforcement in the State of Maharashtra.
Background behind the enactment of the RERA legislation by the Government of India
Prior to the enactment of the Real Estate Regulation & Development Act of 2016 , the
legislations which majorly covered the aspect of purchasing of an apartment/flat were Transfer of
Property Act 1882, Indian Contract Act 1872, Indian Registration Act 1908, Indian Stamp Act
1899 (Bombay Stamp Act, 1958 in case of Maharashtra), Maharashtra Ownership of Flats Act
1963, Maharashtra Apartment Ownership Act 1970 etc.
As discussed earlier, in case of breach of
contract by the developer, the only legal recourse for the allottee was either to approach the Civil
Court for breach of contract or to approach the Consumer Forum with a consumer complaint.
Such cases of breach of contracts and fraudulent activities by the builders rose very sharply over
time leaving a huge mass of home-buyers aggrieved and cheated. It therefore seemed imperative
to the Government of India to bring in a legislation and thereby address this specific problem and
also to regulate the Real Estate Sector by affording better protection to the Allottees and their
The Real Estate (Regulation and Development) Act, 2016 was enacted to ensure a time
bound legal framework for speedy delivery of justice to the aggrieved allottee. It was borne in
mind that aggrieved allottees or home-buyers will be distressed and financially much inferior to
builders and developers who often have a close nexus with politicians and various government
and municipal departments.
We will now delve into those specific provisions of this Act which address the interests of the
allottees or home-buyers.. Chapter IV of the Act lists down the rights and duties of the allottees
of all registered projects.
Below is the list of some provisions of RERA which extend benefit to
the Homebuyers/Allottees in terms of their rights, their protection and grievance mechanism:
*(Note that only those Real Estate projects which have land area of more than
500 Sq Mtrs and has more than 8 apartments need to be registered with the Maharashtra Real
Estate Regulatory Authority [MahaRERA] under the act and must comply with its
Projects which do not fall under the above description are exempt from this
Disclosures of project details on State RERA Authority website: Section 4 of the RERA Act mandates registration of all real estate projects barring only the
previously mentioned exceptions. Once a particular project is registered with RERA, the project
is issued a unique RERA project Registration Number.�https://maharera.mahaonline.gov.in/�is
the designated official Maharashtra RERA Authority website wherein minute details of all
projects that are registered with the RERA authority are listed. Any interested person can search
up the project details by mentioning the project registration number on the above web address
and extract details and documents relating to the project.
Documents like RERA Registration
Certificate, Land Title certificate, Project blueprint and layout, Photographs and details of the
Developers/Promoters and their past projects, Architect name and details, project's stage of work
completion, proposed date of possession, pending litigations against the project, details regarding
number of floors, lifts, water tanks and other amenities etc can all be found on the website. Such
details are required to be updated quarterly by the Promoters/Developers.
Before purchasing a
particular property, a prospective buyer can first check all the relevant details regarding the
property and then take an informed decision whether to purchase it or not. Each allottee is
entitled to obtain such information he/she so desires relating to Sanctioned plans, Layout plans
along with its detailed specifications.
Right to claim timely possession: Date of possession of a purchased unit by the allottee is of utmost importance. Section 18 of the
RERA Act gives effect to this crucial aspect by holding the promoter liable for either delay or
complete failure in giving possession. The allottees have the right to claim possession within the
period the developer/promoter undertakes and as agreed upon in the Sale Agreement.
has occurred in handing possession, then the allottees have recourse to either claim refund with
interest and back out from the project, or in not opting to back out then to claim interest for each
month of delay caused. However, if due to unforeseen and uncontrolled conditions the developer�is unable to deliver possession as per his undertaking, then he may be permitted to obtain RERA
Allottee's right to claim refund and duty to make timely payments: The allottee is entitled to claim refund of the payments made by him to the promoter along with
interest as may be prescribed and also compensation in the manner as provided under the RERA
act if the promoter fails to provide possession of the apartment or plot or building, as the case
may be, in accordance with the terms mentioned in the Agreement for Sale.
19(6) of the Act provides that every allottee is also responsible to make necessary payments as
specified in the said Agreement for Sale towards his/her share of Registration charges,
Municipal Taxes, Water & Electricity charges, Maintenance charges, Ground rent and any other
Delay in payment of such charges shall put the allottee under liability to pay interest at
such rate as may be prescribed. This liability of the allottee to pay interest may however be
reduced when mutually agreed upon between the promoter and the allottee.
Right to seek and access necessary documents & plans: A consumer has every right to know every detail regarding the product he intends to purchase. In
an under construction project, the prospective buyer might want to check certain document
pertaining to the property like: Commencement Certificate, Building Layout, Floor Plans, Flat
Layout, various municipal permissions, Land Title Certificate etc etc.
All concerns regarding the
authenticity of the project can be assessed by perusing these documents. These documents can be
found on the RERA website once the registered project number is entered.
Section 19(5) of the
Act empowers the allottees to access any or all the documents or plans pertaining to the project
or building after possession of his/her apartment. Documents which an allottee might be
interested in after gaining possession include Occupation Certificate, Completion Certificate,
Conveyance Deed, Plans relating to common areas of the project etc.
Right to participate in project handover & Society formation: As per provision of Section 19(11) of the Act, each allottee shall participate towards the
registration of conveyance deed of the plot or building as the case may by the builder in favor of
the association of allottees which in the absence of specified local laws, the builder is required to
execute within 3 months of the issuance of Occupancy Certificate. Once the developer has sold
units in the project and after the project is handed over to the registered Housing Society,
maintaining the project is no more his duty.
The daily management and various expenses of the
building is then within the scope and duty of the Co-operative Housing Society. Such society is
governed by the Co-operative Societies Act 1912 (parent Act), Maharashtra Co-operative
Societies Act 1960 & Maharashtra Co-operative Societies Rules 1961.
Grievance Redressal: The RERA Act provides through Section 31 that any person aggrieved due to a violation or
contravention of the provisions of this Act may file a complaint with the respective State RERA
Authority against any promoter, allottee or real estate agent as the case may be. This can be said
to be the most important feature of the RERA Act.
More importantly because the RERA
Authorities have been given a time stipulation of 60 days to dispose off adjudication of
complaints. Alternate channels of grievance redressals can be extremely lengthy and expensive.
Moreover, in the RERA forum, an aggrieved person can himself file a complaint and also argue
his case without the need of an advocate.
The essence of the RERA legislation is to regulate the Real Estate Industry and create crystal
clear transparency. Prior to the enactment of this act the Real Estate sector was largely
unorganized and unregulated. Increased transparency relating to the project and also relating to
the developer's background brought about trust in the minds of the prospective buyers. Their
reservations regarding genuineness and authenticity of the project are set aside and they invest�with much more confidence.
The fear that they will be duped by unscrupulous developers of
their hard earned money is quelled. This scenario collectively boosts the Real Estate market and
results in overall growth of this sector. More capital flows freely into the industry resulting in
growth and development of the Real Estate sector. Income is generated among the work-force
and professionals associated with the Real Estate Industry.
Eg: Manual Laborers, Architects,
Contractors, Accountancy & Tax professionals, Lawyers etc. Other industries dependent on the
Real Estate Industry too get a boost due to the growth of Real Estate Industry eg: Steel, Cement,
Marble, Electrical appliances etc. One can clearly gauge how much activity occurs in multiple
industries just because capital flows freely in the hands of the developers which in turn is due to
the trust and faith created by the RERA legislation.
Speedy grievance mechanism is another reason for building confidence in the minds of the
investors. The RERA Authority is duty bound to deliver justice within 60 days to any grievance
brought up for adjudication. Therefore a combination of adequate transparency along with
speedy grievance redressal system is the perfect mix which seemed very much the need of the
hour. Due to the now organized style of functioning and availability of critical capital, the Real
Estate Industry is expected to grow with impressive velocity each year owing to the ever
increasing demand for housing and also other commercial and infrastructural and institutional
As a prospective home-buyer, it is of utmost importance to acquaint oneself of the nitty-gritty of
the RERA Act, Rules & Regulations which will ease the process to convert oneself into a proud
and happy Home-Owner.
Award Winning Article Is Written By: Adv.Parikshit Somani,
(BA, LLB, LLM)
Email: [email protected]
Authentication No: JU41054942991-28-0622