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Transcript of Real Estate Bill
The Real Estate (Regulation and
Development) Act, 2016
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Basic Amenities To Lead Peaceful Life
Food
Clothing
Shelter
Presented by CA. Neha Sethi
Presented by CA. Neha Sethi 3
Need Of Real Estate Sector
UrbanisationPrivatisationEmploy
ment & Developme
nt
Minimum Cost
Shelter
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Expectations of Consumers from Developer and Government
Develope
r
Government
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Is the location good with adequate urban Infrastructure? Does the developer
have clear land title?
Have all statutory planning and building approvals been received?
contracts neutral and not one-sided?
What is the actual carpet area that I can use?
How can I know the status of the project and approvals to estimate when construction may get completed?
Is the construction quality and specification as promised/shown in the apartment brochure?
Who do I approach for delays and un-kept promises by developers?
Has the property received the completion certificate after necessary inspections?
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The Real Estate (Regulatory and Development) Act, 2016
Bill First Introduced in Rajya Sabha in 2013. Rajya Sabha Passed Bill on 10.03.2016 Parliament Passed Bill on 16.03.2016 Received accent of President on 25.03.2016 Bill published in Official Gazette on 26.03.2016 Come into force from the date to be notified.
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Contents of Act
The Real Estate Act,2016
92 Sections10 Chapters
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Chapters:1. Preliminary (Section 1-2)2. Registration of Real Estate Project and Agents (3-10)3. Functions and Duties of Promoter(11-18)4. Rights and Duties of Allottees (19)5. Real Estate Regulatory Authority (20-40)6. Central Advisory Council (41-42)7. Appellate Tribunal (43-58)8. Offences, Penalties and Adjudication (59-72)9. Finance, Accounts, Audits and Reports (73-78)10. Miscellaneous (79-92)
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Section 2:- Definition Clause (k) Carpet Area:-
Carpet Area means the net usable floor area of an apartment, excluding the area covered by the external walls, area under services shafts, exclusively balcony or veranda area and exclusive open terrace area, but includes the area covered by internal partition walls of the apartment;
Explanation: For the purpose of this clause, the expression “exclusively balcony or verandah area” means the area of the balcony or verandah, as the case may be, which is appurtenant to the net usable floor area of an apartment, meant for the exclusive use of allottee, and “exclusive open terrace area” means the area of open terrace which is appurtenant to the net usable floor area of an apartment to the net usable floor area of an apartment, meant for the exclusive use of the allotee.
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(n) Common Area Entire Land Stair Case, Lifts, Lift lobbies, Fire Escapes, Common Entrance and Exits Common Basement, Terrace, parks, play area, open parking area and
common storage space Place for the employees such as watch man, ward staff or community
service personnel Installation of central services such as electricity, gas, water, sanitation and
air conditioning, water conservation and renewable energy Water tanks, sumps motors, fans, compressors, ducts and other installations Community and commercial facilities as provided in real estate project Other portion of the project for safety maintenance and in common use.
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(Zk) Promoter
Person who constructs buildingConverts existing building into apartmentsDevelops land into project
Development authority or any public body Apex state level co-operative housing society Any other personExplanation: Developer and seller are different
person for the same project then both shall be deemed to be developer.
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(Zn) Real Estate Agent
Any person Negotiates or acts on behalf of one person in a transaction to t/f his plot, apartment,
building to another person Receives remuneration fees or commission Includes property dealers, brokers,
middlemen
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Sec. 3 (1):- Prior Registration of Real Estate Project with Real estate Regulatory Authority
Registration of Real estate Project With Real Estate regulatory Authority
(ongoing projects should be registered within 3 months of commencement of this act)
Provided further that if the Authority thinks necessary, in the interest of allottees, for projects which are developed beyond the planning area but with the requisite permission of the local authority, it may, by order, direct the promoter of such project to register with the Authority, and the provisions of this Act or the rules and regulations made there under, shall apply to such projects from that stage of registration
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Sec. 3(2) No registration required
If area of proposed land less than 500 Sq. Mtr. Or no. of apartments less than 8 including all phases. (appropriate govt. can reduce the said limit)
If completion certificate received by the promoter before commencement of act
Those renovation, repair or re development which does not involve marketing, advertising, selling or new allotment
Explanation:- if project to be developed into phases then every phase to be treated as separate project and requires separate registration.
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Sec. 4 Application for registration of Real Estate Project
1. Application in such manner as may be prescribed with such fees2. Documents to be attached Name and constitution of enterprise Details of projects launched in past 5 years whether in process or completed
Including current status of project , any delay, pending details of type of land and pending payments pending
Approval and commencement certificate from competent authority Sanctioned plan, layout plan and specification of project as may be sanctioned Plan of development, work execution and facilities to be provided like water
sanitary electricity and security Location details of the project with its boundaries including latitude and longitude Performa of the allotment letter, agreement for sale and conveyance deed Number type and carpet area of apartments with exclusive area of balcony and
verandah Number of garages Name and address of real estate agent Name and address of contractor engineer and architect
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Cntd….. Declaration stating Legal title with legally valid documents Free from encumbrances, details of encumbrances if any in
regard to rights, title, interest or name of any party Time period undertaken for completion of project Separate bank account in scheduled bank for funds realized from
real estate project (at least70% to be deposited) to cover cost of project and should be exclusively used for such purpose
Amount to be withdrawn from bank in proportion to cost of completion, certification required for percentage ascertainment
Promoter shall get his accounts audited within 6 months from end of FY form CA, and produce such statements
Verification that funds realized from a particular project has been utilized in such particular project
Web online system for submitting registration application
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• In case of Force majeure registration can be extended for 1 year by authority (Sec. 6)
•Force majeure means a case of war, flood, drought, fire, cyclone, earth quake or any other natural calamity
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Sec. 7 Revocation of RegistrationRegistration can be revoked on following grounds:- Complaint, suomotu, recommendation of competent authority1. Default in doing any act required by act2. Violation of terms and conditions of competent authority3. Unfair practices or irregularities 30 days notice before revocation of registration to promoter’ Terms and conditions can be imposed in interest of allottes instead of revoking RC. Upon revocation of registration name of promoter shall be displayed in defaulter list on
website with photograph, information to other state and union territories, freeze the bank account and directions can be issued]
Remaining work shall be carried out in accordance with sec. 8 and de-freezing of account so as to carry out remaining work
Unfair practice means:-• Representation of false grade• Promoter has affiliation with such other promoter does not have• False or misleading representation of services• Wrong advertisement with false facts• Fardulant practices
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Sec. 8 Obligation of Authority on revocation of registration
After consultation with appropriate government the project shall be completed by the competent authority or association of allottes.
No direction or decision shall be taken for remaining work until the matter is in appeal
Upon revocation of registration association of allottes shall have right to refuse to carry out the remaining development.
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Sec. 9 Registration of Real Estate Agents
No sale, agreement, purchase shall be effected by agents of the registered projects unless obtaining registration under the act
Make application to the authority for registration Single registration for entire state or union Application can be rejected for the reasons to be recorded in
writing (Opportunity of being heard to be provided to the applicant)
Deemed registration if no communication within specified time Registration number to be quoted on every sale facilitated by him Renewable registration Registration can be revoked or suspended if obtained with false
representation of facts
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Sec. 10 Functions of Real estate Agents
Sale of Registered
Projects
Maintenance of Books of Accounts
Not to involve in Unfair Trade
Practices
Such other functions as may
be prescribed
Facilitate all information and
documents of title
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Sec. 11 Functions and Duties of Promoter
Webpage •Registration•Quarterly up to date list of number & type of apartments, no. of garages booked, approval taken and pending, status of project
Advertisement•Contain website address•Registration number•True particulars of project
Make available information to allottee •Sanctioned Plan Layout, specifications•Stage wise completion Schedule
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Responsible for
• Obligations responsibilities from agreement to conveyance deed
• Obtaining completion certificate• Lease certificate where project is developed on lease
hold land
Responsible for
• Providing and maintaining essential services on reasonable charges till taking over of maintenance of project by association of allottees
• Enable formation of society or association or co operative society(shall be formed within 3 months where majority of plot apartment or building have been booked)
Execution and payment•Registered Conveyance deed in favor of allottee•Pay all outgoings until transfer of physical possession•Shall be liable to pay even after t/f of possession•After agreement no mortgage on such land,•Promoter may cancel agreement as per terms of agreement•If not as per terms allottee can go to authority for relief
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If advance received by promoter on the basis of false information in advertisement or prospectus then, allottee shall be compensated by the promoter and whole investment shall be returned with interest (Sec. 12)
Upto 10% of Cost of apartment can be accepted by promoter from allottee without entering into agreement (Sec. 13)
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Sec. 14 Adherence to Sanctioned plans and projects
Development and completion as per sanctioned plan No changes, alteration or additions permitted after
sanctioned plan disclosed to buyer (only such minor changes permitted as specified by allottee or which are necessary for architectural or structural reasons duly recommended and verified by authorized architect after proper intimation to allottee)
Changes can be made if 2/3rd allottees agree for such change After handing over possession to allottees promoter shall be
liable for 5 years, for any defect in quality or workmanship and further it has to be rectified within 30 days of bringing to the notice of promoter
If not rectified then allottees shall be entitle to receive compensation
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Sec. 15 Obligation of promoter if Real estate Project t/fd to third party
For transfer of real estate project to third party consent of :-
• 2/3rd Allottees• Written approval of Authority
Intending promoter shall comply with all the obligations & responsibilities as defined in agreement of sale
• No delay shall be permitted to Intending Promoter to complete real estate project
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Sec. 16 Obligation of Promoter Regarding Insurance of Real Estate Project
.Obtain all such insurance as may be notified by the appropriate govt. but not limited to title of land and construction of Real Estate Project
.Pay premium and other charges before transferring such insurance in favor of association of allottees
.Insurance will stand transferred at the time of agreement of sale and all the documents shall be handed over to association of allottees.
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Conveyance deed to be executed within 3 months of obtaining Occupancy Certificate and all the documents to be handed over to allottee. (Sec. 17)
Sec. 18 Return of Amount and Compensation
•Allottee wishes to withdraw then whole amount plus interest•Does not withdraw then interest for every month of delay upto completion
Fails to complete
•Compensate the allottees if any loss caused due to defect title
Compensate Allottee
•Fails to comply then liable for compensation to allottee
Obligation under this act or rules
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Sec. 19 Rights and Duties of Allottees
Information relating to sanctioned Plan
Know Stage Wise Completion
including basic amenities
Claim possession of area as
specified in agreement
Entitled for interest and compensation if
promoter does not comply with plans
Entitled to have necessary documents
Timely payment of installments and
other maintenance charges
Liable to pay interest on late payment of
installment or other charges
Interest liability may be reduced by mutual discussion between promoter
and allottee
Physical possession within 2 months of
occupancy certificate and participate in
Association or society
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Sec. 43 to 58 Appellate Tribunal
Established within one year of commencement of Act•One or more Benches•Appropriate govt. of two or more state or union if deem fit establish one tribunal
Security to be deposited for filing of appeal by promoter•At lest 30% of penalty or such higher percentage•Or the total amount to be paid including interest and compensation to allotee
Following eligible to file appeal•Appropriate Government•Competent Authority•Any person aggrieved by order of Authority•Adjudication Officer
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Time Limit for Filing Appeal
Appeal to high Court Within 60 days of receiving of order of AT(Delay may be condoned if supported by sufficient cause
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Composition of Real Estate Appellate Tribunal
Chair person- High Court Judge
- Term 5 years- Age upto 67 years
Judicial Member- 15 Years Experience
-Term 5 Years- Age upto 65 Years
Technical Or Administrative Member- 20 Years Experience of Urban development
or Real Estate Sector and many more- Term 5 Years
-Age upto 65 Years
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Powers of Appellate Tribunal
-Guided by principle of Natural Justice- Regulate own
Procedure-Not to be bound by rules of evidence as
provided in Evidence Act
Same powers as vested in CPC, 1908
- Summoning & enforcing Attendance
-Discovery & Production of A/cs and documents
-Review Decision-Ex-parte Order
-Commissioning and examining Witness or
documents-Receive evidence on
Affidavit
Will be deemed as judicial proceedings as of Sec. 193, 219 & 228 for purpose of Sec. 196 of
IPC
Will be deemed as Civil Court as u/s 195 of CrPC
1973.
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Right to Legal Representation
CS CA
CMA Legal Practitioner
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Offence & Penalties for Promoters Failure to Register (Sale without registration) :- Fine upto 10% of project Cost. Failure to compile with orders passed by RERA :- Imprisonment of 3 Year and/
Or Fine upto 10% of Project Cost. False Declaration about Project/ Promoters:- Fine upto 5% of project cost.
Offence & Penalties for Real Estate Agent Failure to Register :- Fine upto 5% of unit cost sold and / or imprisonment of
1 Year Selling of Unregistered Project :- Fine upto 5% of unit cost sold and/ or
imprisonment of 1 year
Offence & Penalties for Allottee’s / Customer Failure to compile with orders passed by RERA :- Fine upto 5% of Unit cost
sold and/ or Imprisonment of 1 year Deliberate Purchase in Unregistered Project :- Fine upto 5% of Unit cost sold
and/ or Imprisonment of 1 year
Offences and Penalties
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Sec. 73 to 78 Finance, Accounts, Audit, and reports
CG may grant loans after appropriations by Parliament
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Maintain budget and proper accounts Audit by C&AG Preparation of annual report containing
description of activities, annual accounts and work programs
Present before legislative authority
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Thanks & Regards
Presented By:-CA. Neha SethiEmail: [email protected]
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