QA at the Event

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QA at the Event

Que.1 : If a project has less than 500 sq mts but more than 8 flats (or) If a project has more than 500 sq mts but less than 8 flats, does it require to register?

Ans: In either of the case, real estate project is required to get registered.

Que.2 : How Does It Affect The Real Estate Developer’s Arrangements With The Real Estate Agents, Contractors, Architect, Structural Engineers And Similar Parties?

Ans: As per the government rules, only registered agents are legally allowed to function in the real estate business. Also, the RERA makes it mandatory for a developer to make a declaration about the real estate agents, architects, structural engineers and similar parties to the appellate Tribunal of the RERA.

Que.3 : What Are The Mandatory Rules For the Real Estate Agent?

Ans: As per the RERA act, 2016, an intermediary is required to be registered with the RERA and retain a valid registration number before facilitating any real estate deal on the behalf of any real estate developer. He/she is also required to maintain and preserve account logs and other documents as prescribed by the Act and also to facilitate all information and provide any further assistance as prescribed by the Act to the consumer.

In case if an intermediary violates the rules prescribed by the RERA, he/she will be liable to a penalty up to 5% of the estimated cost of the unit in question.

Also, the intermediary can face imprisonment up to one year if he/she breaches any orders, decisions or directions given by the Appellate Tribunal.

Que.4 : In case, if the Agent has sold the property registered under RERA, but the developer is not developing it, in that case what would be the liability of Agent? Can FIR be filed against Agent?

Ans: As per Section 10 "Functions of Real Estate Agents" - The Real Estate (Regulation and Development Act, 2016), Every Real Estate Agent registered under section 9 shall-
(a) not facilitate the sale or purchase of any Plot, Apartment or Building, as the case may be, in a Real Estate Project or part of it, being sold by the promoter in any planning area, which is not registered with the Authority;
(b) maintain and preserve such books of account, records and documents as may prescribed;
(c) not involve himself in any unfair trade practices, namely:-
(i) the practice of making any statement, whether orally or in writing or by visible representation which-
(A) falsely represents that the services are of a particular standard or grade;
(B) represents that the promoter or himself has approval or affiliation which such promoter or himself does not have;
(C) makes a false or misleading representation concerning the services;
(ii) permitting the publication of any advertisement whether in any newspaper or otherwise of services that are not intended to be offered.
(d) facilitate the possession of all the information and documents, as the allottee, is entitled to, at the time of booking of any plot, apartment or building, as the case may be;
(e) discharge such other functions as may be prescribed.
(f) maintain and preserve such books of account, records and documents as may prescribed;

If any Real Estate Agent fails to comply with or contravenes the provisions of section 9 or section 10, he shall be liable to a penalty of ten thousand rupees for every day during which such default continues, which may cumulatively extend up to five per cent. of the cost of plot, apartment or buildings, as the case may be, of the real estate project, for which the sale or purchase has been facilitated as determined by the Authority.
A buyer who is the victim of the unfair practices of the builder, Developer or Agents can approach the following forums for his redressal:
• He can file a civil suit in a Civil Court
• He can file a complaint before the consumer Forum
• He can file a complaint before the Competition Commission of India
• He can approach Regulatory Forums
• He can file a Criminal Case

Que.5 : What are the consequences that follow, if a property deal is called off or cancelled?

Ans: Property deals need not always culminate in the execution and registration of an agreement. Sometimes, the deal may not go through and may be abandoned halfway, after the payment of token money or even after some of the payments have been made. The deal may be cancelled by either the seller or the buyer, for any reason.
In case of deals for the purchase of any real estate, the buyer generally pays some amount as token money, when the other terms and conditions for the transfer of the property are agreed upon. The amount of token money may vary, from being merely a token to a substantial percentage of the value of the property. If the seller backs off from his commitment to sell his property, the buyer gets a right to file a compensatory suit for specific performance in the courts of law and demand that they get refunded the money they lost in the transaction.
If the buyer backs out from the deal, the seller has the right to forfeit the token money paid.

Que.6 : What is common area? Whether developer can sell any common area?

Ans: As per Section 2(n) of the RERA Act, 2016:
"Common areas" means:-
• The entire land for the Real Estate Project or where the project is developed in phases and registration under this Act is sought for a phase, the entire land for that phase.
• The stair cases, lifts, staircase and lift lobbies, fire escapes, and common entrances and exits of buildings
• The common basements, terraces, parks, play areas, open parking areas and common storage spaces
• The premises for the lodging of persons employed for the management of the property including accommodation for watch and ward staffs or for the lodging of community service personnel
• Installations of central services such as electricity, gas, water and sanitation, air-conditioning and incinerating, system for water conservation and renewable energy
• The water tanks, sumps, motors, fans, compressors, ducts and all apparatus connected with installations for common use.
• All community and commercial facilities as provided in the Real Estate Project.
• All other portion of the project necessary or convenient for its maintenance, safety, etc., and in common use.

A terrace, a play area, a garden, a community hall, a stairway, and elevators are all shared areas and have to be made accessible to all the apartment-owners without any ownership issue. As any repair, replacement and maintenance cost of such common areas needs to be borne by all the flat owners jointly, likewise, any income or profits arising from the use of such common areas have to be distributed equally among all the Flat owners.

Though, it has been seen that many builders and developers are selling common area rights on payment which is an illegal practice.

It is indefensible in the eyes of law where one resident gets the right to use the rooftop to the disadvantage of others. If residents take a legal action, both the developer and the offending buyer could be in trouble.

It ought to be noted that neither the developer nor the society management will prohibit the usage of the common areas within the society.

Section 19 of RERA Act, 2016, gives the right to the Allottee to claim possession of the common areas of the project in accordance with the declaration given by promoter under sub-clause (C) of clause (I) of sub-section (2) of section 4.

In case if the Developer prohibits the usage of the common areas to the Buyer, then he can file a complaint against the developers or builders by approaching the Consumer Forum or can complain against the society office-bearers with the Registrar of Societies. Moreover, residents may also file a civil suit in a court of law.

Que.7 : Whether the commission income received by Agent from Builder is required to be deposited in a “Separate Account” or it can be transferred in any of his Saving Account?

Ans: There is no provision in the Act, which specifically states for the maintenance of separate Bank Account by the Agent for receiving of commission income from the Builder.

However it is recommended to the registered Agents to get a separate Bank Account opened, as it will be helpful in case any future clarification is required by the Authorities in terms of their working & rights, duties & responsibilities as a registered Agent.

In addition to that , at the time of maintenance of books of accounts, segment wise distribution of revenue should be done for better understanding, like separate recording of revenue related to RERA registered project and non- RERA registered project like leasing etc.

Que.8 : What is carpet area? Whether internal walls covered under the definition of carpet area or not?

Ans : “Carpet area” means the net usable floor area of apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment.

For the purpose of this clause, the expression “exclusive 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 the Allottee: and “exclusive open terrace area” means the area of open terrace which is appurtenant to the net usable floor area of an apartment, meant for the exclusive use of the Allottee;

Carpet Area defined under MAHARERA:
On 14 June 2017 MahaRERA official website has notified a circular on calculations of carpet area as defined under the section 2(K) of the Real Estate (Regulation and Development) Act, 2016. The government of Maharashtra, on 8th March 2017, notified rules under the act of RERA with a vide notification for regulations and promotions of real estate sector in the state of Maharashtra. Under section 2(k) of the real Estate (Regulation and Development) Act, 2016, carpet area of the apartment to be sold by the promoter is defined as “Carpet Area” which means the net usable area of an apartment, excluding the area covered by external walls, area under service shafts, exclusive balcony or verandah area and exclusive open terrace area, but including the area covered by the internal partition walls of the apartment.

How to calculate carpet area as per RERA?
The net usable area within the outside walls of an apartment is considered as carpet area, excluding the balconies, verandah or open terrace and shafts. Internal walls are to be considered in carpet area.

As explained in the circular: For the purpose of this clause, the expression “exclusive balcony or verandah area” means the area of the balcony or verandah, as the area may be which is appurtenant to the net usable area of the apartment, meant for the exclusive use of the Allottee and “exclusive open terrace area” means the area of the open terrace which is appurtenant to the net usable area of an apartment, meant for exclusive use of the Allottee.

“Internal partition walls” and “external partition walls” are given different interpretation by different professionals and architects. To understand these terms better the circular clarifies these terms to have uniformity in the calculation of carpet area of an apartment across all projects that are registered with MahaRERA.

“Walls” would mean walls made of reinforced Cement concrete (RCC) or plain concrete or sheer walls or walls made of bricks, blocks, precast material or dry walls or walls made of any material or composition of one or more any of the materials shall include column(s) within or adjoin or attached to the wall.

What is Enclosed Balcony as per RERA?
A Balcony that is not open and is usually with windows instead of open air. It is a platform elevated from the wall of a building, supported by columns and enclosed with walls with few windows. As per RERA the net usable floor area of an apartment is to be considered while buying a property. In this net usable area of a flat terrace and balconies are to be considered, and enclosed balconies are considered to be part of carpet, as anything inside the outer walls of an apartment is considered into carpet area. Now developers mention enclosed balcony under utility area name.

For the purpose of calculation of carpet area under the clause 2(k) of the real estate (Regulations and Development) Act, 2016, all walls which are constructed or provided on the external face of the apartment shall be mentioned as “external wall”.

All walls or independent columns constructed or provided within the apartment shall be regarded as “internal partition walls”.

This order is supposed to into force with effect from the date of commencement of the Real Estate (Regulations and Development) Act, 2016.

Que.9 : What is the maximum extension time limit for project registered under RERA?

Ans: Section 6 envisages two situations within which the registration granted to a project can be extended. Extension of registration can be granted in case of force majeure, in addition, it can also be granted under reasonable circumstance, without the fault of the promoter, in such form and on payment of such fee as may be specified by specific state regulations made by the RERA Authority, which shall not be more than a maximum period of 1 year.

Explanation to section 6 has defined force majeure to mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project.

Que.10 : What are the terms and conditions for extension of registration?

Ans: The registration may be extended on an application made by the promoter in Form-E prior to the expiry of the registration already granted.

The application for extension of registration shall be accompanied with a proof of payment through online mode, for an amount equivalent to half of the registration fee as specified under sub-rule (3) of rule 3 along with an explanatory note setting out the reasons for delay in the completion of the project and the need for extension of registration for the project, along with documents supporting such reasons. Provided that where extension of registration is due to force majeure the Authority may at its discretion waive the fee for extension of registration.

Que.11 : Does the definition of ‘promoter’ include public bodies such as Development Authorities and Housing Boards?

Ans: The Act covers all bodies (private and public) which develop real estate projects for sale to the general public. Section 2(zk) defines the term ‘promoter’ which includes both private and public real estate promoters. Thus, both Development Authorities and the Housing Boards, when involved in sale are covered under the Act.

Que.12 : Does RERA also govern local Authorities?

Ans: JDA is the Local Authority and RERA also governs over JDA and other Development Authorities to the extend as defined under Section 3 of RERA Act, 2016.

Even Authorities like JDA are required to get their projects registered under RERA .
Local Authorities by virtue of law have powers to sanction plans as per local law. However, in case, they bring their own projects, they are needed to register the same as equivalent to other Developers.

Que.13 : Whether vacant plot is required to get registered under RERA?

Ans : No, vacant plots are not required to get registered under RERA until & unless any development plan on that plot has been approved by the Competent Authority, and it is offered for development and subsequently for selling.

Que.14 : Whether the small builders those who are selling 8-10 flats, are required to be get registered under RERA?

Ans : As per Section 3 of RERA Act, 2016, no registration of the Real Estate Project is required in the following cases:
a) Where the area of land proposed to be developed does not exceed 500 square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases.
b) Where the promoter has received completion certificate for a Real Estate Project prior to the commencement of the Act.
c) For the purpose of renovation, or repair, or redevelopment which does not involve marketing, advertising, selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project. Hence, a project may not be required to be registered under RERA if there is no intention to sell/market/book etc.

Que.15 : If any property shown by an Agent is directly purchased by the Client from builder, then how Agent will get his commission?

Ans: A signed agreement between a Developer and Agent is prerequisite requirement for any claims to be made by an Agent.

Que.16 : Can builder change its plan by dividing projects in more than one part? Can he defer facilities/amenities offered in first part?

Ans : As per section 14 of the RERA ACT 2016, it is stated that, the promoter can’t make any alterations or additions in the sanctioned plans, layout plans and specifications of the building or the common area within the projects without the previous written consent of at least two thirds of the Allottee other than promoter who have agreed to take Apartments in such Building. Amenities should be completed with First phase only as logically you cannot deprive Allottees from their right to use common area till Second phase.

Que.17 : What actions can be taken by RERA in case where a property/ project is purchased by client which is approved by JDA but not registered in RERA?

Ans : It will be treated same as non registered property under RERA. Hence penalty for violation of section 3 is applicable i.e. Promoter shall be liable to a penalty which may extend upto 10% of the estimated cost of the Real Estate Project as may be determined by the Authority.

If a promoter continues to violate the provisions of section 3 , he shall be punishable with imprisonment for a term which may extend upto 3 years or with fine which may extend upto a further 10% of the estimated cost of Real Estate Project or with both.

Que.18 : After applying the project for registration, why details of ‘‘project type’’ is not allowed to be modified?

Ans : A project can be registered under a particular segment only i.e. it may be plotted, group housing or commercial.
And the fees attached to each particular segment are different. So when a particular segment is selected and fees for the same is paid, modification is not possible.

Que.19 : Whether a single registration for all the States is required or Agents have to take separate registration for each State?

Ans : Under Section 9 of RERA Act, Real Estate Agent is registered for the entire state/ union territory and a single registration is granted to the Real Estate Agent for that entire State/Union Territory. Hence separate registration is required for every State.

Que.20 : If an Agent is registered in RERA as an individual. What is the procedure to convert the registration into proprietorship?

Ans. For converting from individual to proprietorship, a fresh registration is required for the same under section 9 of RERA Act.

Que.21 : Whether it is mandatory to state a same date for the completion and the possession of a project or different dates can be given ?

Ans : Nothing is stated in the RERA Act for the same; both the dates can be different.

Que.22 : Whether the Allottee can demand refund in case the construction of project is not completed within time and possession is not given timely to the Allottee?

Ans : As per Section 18 of RERA Act 2016:
(1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building,--
(a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or
(b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason,

 he shall be liable on demand to the Allottees, in case the Allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act.

 Provided that where an Allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.

Que. 23 : Is Occupancy Certificate and Completion Certificate same?

Ans: "Under the Real Estate (Regulation and Development) Act, 2016 (RERA):
Completion Certificate:
1. This is applied to the local municipal body when the construction of the building is complete.
2. The construction must be completed as per the approved plans by the municipal authorities which would include safety standards, other standard regulations like environmental clearances, flight safety clearance (Height of the building, alarmer lighting for aircraft on top of the building etc), rainwater harvesting wherever required, the distance from the road etc.
3. A Completion Certificate is not enough to make your property legal for occupation without obtaining an Occupation Certificate.

Occupancy Certificate:
1. The Occupancy Certificate is the final pass certificate of a project/ building.
2. Occupancy Certificate certifies that the building has complied with all the required building standards, local laws and it is safe to occupy (as mentioned to the authorities earlier at the time of obtaining the commencement certificate).
3. Here, the linkup between investing in a project only after the commencement certificate has been procured and the occupancy certificate finally comes into the picture.
4. As the project might be well built and ready but without an existing commencement certificate, it would be hard to obtain legally an Occupancy Certificate as there would be no way to check if the project has complied with the required safety and standards set by the laws.
5. The Occupancy certificate is issued by local municipal authorities or the building proposal department once the building has been completed and is ready to be occupied.

Hence, Completion Certificate is a document which indicates that the building has been constructed in adherence to the sanctioned building plans. The Occupancy Certificate, on the other hand, is a certificate which proves that all the necessary equipment and other facilities required to be installed in a building have been installed and permits the occupation of the building. Without an Occupancy Certificate, in the age of RERA, your flat is illegal.

Que. 24 : How to obtain an Occupancy Certificate?

Ans: The OC is obtained from local municipal bodies by submitting an OC application form along with the following documents:
• Commencement Certificate
• Completion Certificate
• Built and Section plan
• NOC for fire and pollution
• Area calculation sheet of floor signed by an authorised architect
• Photographs of the completed building
• Tax assessment with tax paid receipt
• Photographs of rain harvesting and solar panels
• Copy of the sanctioned plan

After submitting the form, authorities inspect the complex and confirm if it has conformed to the approved plan before issuing an OC. Legally and ideally, a builder should submit an application with the municipal commissioner for the OC within 30 days of completion of the property.

Que.25 : Whether it is possible to get the Occupancy Certificate before obtaining Completion Certificate?

Ans: It is not possible to get the Occupancy Certificate without obtaining Completion Certificate.
While applying for Occupancy Certificate, it is necessary to submit Completion Certificate along with other documents.

Que.26 : Why should homebuyers insist on obtaining Occupancy Certificate (OC) from the Builder?

Ans :In the absence of a valid OC, the local municipal body can initiate serious action against flat owners.
If buyers are not careful about getting the OC, they may face the following repercussions:
• In the absence of a valid OC, your building can be demolished as it can be classified as an unauthorised structure.
• The OC is crucial while applying for a home loan or loan to purchase a resale flat. If you wish to sell or hypothecate the property after a lapse of time, you will not be able to do so without a valid OC.
• The water connection, sanitary connection or electricity supply can be disconnected in the absence of an OC.

Que.27 : What action can the buyer take?

Ans: Under RERA, Developers who give possession to buyers without OC are in breach. RERA makes it mandatory for the Developer to obtain OC and only then offer possession to buyers. If the Developer fails to obtain OC, the flat purchasers can approach RERA for redressing their complaints,".
Buyer may also be entitled to compensation. RERA also stipulates that in such scenarios, the Builder will adequately compensate the buyer for the delay in getting the OC and till such time the registered sale deed is done in favour of the buyer,"
"Legally, Buyers of properties without OC can exercise their legal rights and drag the Builder to Court. They can issue a notice to the Builder and/or approach consumer forums if the property registration is complete and Buyers see their names on the Encumbrance Certificate,"

Hence, Step by step guide of actions that can be taken by Buyer are:
1) Ask the builder to give you OC, Issue a legal Notice if necessary.
2) File a RERA complaint with help of a good property lawyer in India.
3) Buyer can file a right to information (RTI) request to find out why the OC has not been issued for the property/project.
4) Issue a legal notice directing the builder to obtain an OC.
5) Claim compensation in the consumer court if the developer has delayed.
**Note that A Provisional Building Completion Certificate is valid for six months only. The final building Completion Certificate is still required to be obtained by the buyer.

Que. 28 : Can developers claim 100 per cent payment from buyers without OC?

Ans :"The provisions of the model agreement under RERA Act provides milestone-based payments. Certain quantum of monies from and out of the total consideration is to be paid on the Developer handing over possession with OC. A Developer cannot claim 100 per cent consideration from a flat purchaser without obtaining OC,"

Que.29 : Can not having an OC obstruct you from selling your property?

Ans: The OC is a mandatory document for buyers applying for a home loan. Therefore, owners selling their ready properties without an OC can't proceed if their prospective buyer is applying for a home loan, as banks require this document.

Que.30 : How does Occupancy Certificate apply to ready-to-move-in projects?

Ans : In case it is an older project, the buyers through the flat owners association can either approach the concerned municipal authority directly for grant of OC or file a consumer action before the concerned consumer forum on the ground that non-supply of OC constitutes deficiency of service.
In such cases, the OC should already be there with the builder.

Que.31 : How does OC apply to under-construction projects?

Ans : The OC can be given to one complete tower in an incomplete project. The OC can be applied for phase wise.

Que.32 : Can Builders issue Partial Occupancy Certificate?

Ans: When there are blocks or phases of large projects to be developed with varying completion dates, the concerned authority can grant a partial occupancy certificate for the completed phases/blocks. After the completion of entire project, Partial OCs are replaced by final OC (Consolidated document). Do note that it can be a tough task to get a home loan with a Partial OC.

A builder can get a provisional building completion certificate from local authorities. But do note that this is valid for six months only. He has to obtain final building completion certificate.

Que.33 : Where the Real Estate Project is to be developed in phases, whether registration is required for each phase?

Ans: The Act is clear on this front and says - "Where the Real Estate Project is to be developed in phases, every such phase shall be considered a standalone Real Estate Project, and the promoter shall obtain registration under this Act for each phase separately.

Que. 34 : Whether partial completion certificate can be obtained in case only 4 floors of mall are constructed and remaining are still under construction?

Ans: A provisional or temporary/Partial completion certificate is generally demanded by and awarded to a builder if the builder wants to give possession of a flat to the flat holder but still some works are required to be completed e.g. construction or finishing of ancillary amenities like the sports room, painting work etc. Generally, the validity of the provisional certificate is written in the certificate. The validity of a provisional certificate expires in six months or as regulated by Authority. The builder then has to apply for the final completion certificate. By obtaining partial completion certificate, one does not get rid of obtaining a final completion certificate.

Que.35 : Some Companies are selling individuals villas/ resorts at Pushkar or near Ajmer Road. Whether they are required to get registered under RERA?

Ans : As per Section 3 of RERA Act, 2016, No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act.

"Apartment" whether called block, chamber, dwelling unit, flat, office, showroom, shop, godown, premises, suit, tenement, unit or by any other name, means a separate and self-contained part of any immovable property, including one or more rooms or enclosed spaces, located on one or more floors or any part thereof, in a building or on a plot of land, used or intended to be used for any residential or commercial use such as residence, office, shop, showroom or godown or for carrying on any business, occupation, profession or trade, or for any other type of use ancillary to the purpose specified;

Villas/ resorts constructed on individual plots falls under the heading “Apartments” as these are self contained residential units build on plots of land. Hence villas/resorts are required to get registered under RERA .

Que.36 : What if promoter starts advertising the project without getting it registered under RERA?

Ans: As per section 3 of RERA Act, 2016, no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment, or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the Real Estate Project with the real estate authority established under this Act.
Punishment for non registration under section 3 is defined under Section 59 of the Act.
Provisions under Section 59 are:
(1) If any promoter contravenes the provisions of section 3, he shall be liable to a penalty which may extend up to ten per cent of the estimated cost of the real estate project as determined by the Authority.
(2) If any promoter does not comply with the orders, decisions or directions issued under sub-section (1) or continues to violate the provisions of section 3, he shall be punishable with imprisonment for a term which may extend up to three years or with fine which may extend up to a further ten percent of the estimated cost of the real estate project, or with both.

Que.37 : How much advance can be taken by Promoter without entering into agreement for sale?

Ans : As per Section 13 of RERA Act 2016 , a Promoter cannot accept a sum more than 10% of the cost of apartment, plot, building, as the case may be as an advance payment or an application fees from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force.

Que.38 : Would existing customers referring new customers, be considered as Real Estate Agents under RERA provisions?

Ans : If such bookings are for consideration are called referral bookings. Existing customers referring to others for buying the flat in some project or other project of same developer will be treated a Real Estate Agent, as it is against a consideration.

Que.39 : Is Promoter required to maintain an “Escrow Account” or “Separate Account”? Is “Separate Account” to be maintained for every projects or it can be for one or more projects. What are the purpose for which Promoter can withdraw the money from the Separate Account? What if promoter does not maintain the Separate Account or withdraw money from Account without taking CA Certificate, Architect Certificate, and Engineer certificate.

Ans: As per section 4(2)(I)D), every promoter is required to open RERA separate account in a scheduled bank to cover the cost of construction and land cost of the project.
The withdrawal from such accounts should be in accordance with act, rules, and regulations as prescribed.

Account opening for project registration in RERA:
1. RERA account shall be opened for each of the projects to be registered in RERA. Details of the project-specific account are to be submitted by the promoter at the time of registration of the project.
2. Every project should have only RERA account. In the case of multiple promoters, necessary contractual or legal arrangements should be made by the principal promoter, who is registering the project, to ensure proper operations of RERA Account.

Deposit in account:
1. The Promoter shall deposit seventy percent of the amount collected from Allottees in the RERA Account. In the case of a project where the estimated cost to complete the project is higher than the estimated value of sales revenue, hundred percent of the amount collected from the Allottees shall be deposited in the RERA Account.
2. The money lying in the RERA Account can be put in fixed deposits with the bank operating the RERA Account provided it is a ‘No Lien Fixed Deposit’ and no loan can be obtained against or on such Fixed Deposit nor any charge can be created on such Fixed Deposit.

Withdrawal from account:
1. As per the second proviso to section 4(2)(l)(D) of the Act which provides that the amounts from the RERA Account shall be withdrawn by the promoter after it is certified by an architect, an engineer and a chartered accountant in practice, that the withdrawal is in proportion to the percentage of completion of the project.
2. The promoter shall have following certificates for withdrawal from bank account:
a) Certificate from the Architect certifying the percentage of completion of construction work of each of the tasks/activity of the building wing of the project.
b) Certificate from the Engineer for the actual cost incurred on the construction work of each of the building/wing of the project.
c) Certificate from a practicing Chartered Accountant in practice other than the statutory auditor of the Promoter, for the cost incurred and paid on construction cost and the land cost.

Auditing of Account:
The promoter is required to get his accounts audited within six months after the end of every financial year by the statutory auditor of the Promoter’s enterprise and produce the report on the statement of accounts on project fund utilization and withdrawal by Promoter in accordance with respective state rules.
If Promoter does not maintain the separate account or does not withdraw money by following proper provisions, then he will be liable for penalty under section 60.
As per section 60 of RERA act, 2016 , if any Promoter contravenes provisions of section 4, he shall be liable to a penalty which may extend up to 5% of the estimated cost of the real estate projects , as determined by the authority.

Que. 40 : Whether money collected from Allottees towards stamp duty, registration, share money for society, deposits for maintenance, corpus funds, infrastructure charges, parking charges etc., are required to be deposited in the designated bank account (70 %)?

Ans: Yes, since these are part of the project cost.

Que .41 : Who gets the ownership of the club? Whether the Developers may allow outsiders to use Club and earn profit out of it.
Whether the membership fees charged by Developers will be transferred to Society Account or it will go into the pockets of Developers?

Ans : The term “club” needs to be defined here:
• If the club is coming under the common area : Then in that case, no outsiders are allowed to use the facility of the said club being a part of common area, unless Association of Allottees jointly agrees to lease/rent out the same for a specific day or more than one day. In this case fees will be decided by Association of Allottees and it will not go to the pockets of promoters and form part of society corpus.
• If club is not coming under the common area: It means it is a totally separate area, constructed by Promoter, then in this case, Promoters can allow outsiders to use the club and can earn profit out of it.

Que.42 : Whether approval of 2/3rd Allottees are required, where Builder sold the flats whose funding is done by NBFC. Later the NBFC has taken the possession as per SARFAESI Act.

Ans : Approval of Allottees are not required in cases where transfer of the promoters rights and obligations in the real estate project is pursuant to enforcement of security by financial institutions or creditors or pursuant to the operation of the law, provided that their loan and charge over the project was disclosed in the registration details of the project on the website of RERA. Lenders should ensure that their loans and charge over the projects get disclosed by the promoter on the website of RERA to ensure smooth enforceability of their security.

Que.43 : On what grounds can RERA revoke a registration?

Ans: Upon receiving a complaint against the real estate developer, the RERA can revoke registration under certain conditions:
(a) If it is satisfied that the real estate developer has not complied with the rules and regulations stated under the Act or rules & regulations.
(b) If he has violated the terms & conditions of approval given by competent authority
(c) If he is involved in unfair practices to sell, market or advertise his project

Que. 44 : What is the role of RERA after Revocation of Registration.

Ans: (a) RERA will prohibit promoter from accessing its website for that project, specify his name in list of defaulter, display his photograph on its website and also inform RERAs in other States & Union territories about such revocation or registration
(b) RERA will direct the bank holding the project back account, to freeze the account, and take necessary actions including consequent de-freezing of the said account to facilitate remaining development work in accordance with provisions of section 8
(c )RERA may issue necessary directions to protect interest of Allottees.

Que.45 : What are the norms by RERA on Advertisement or Promotions of Real Estate Projects?

Ans: The RERA have strict guidelines for the marketing of the projects. As per the rules, anything shown in the marketing material must be same with the final product or else real estate developer will be liable to penalties under the Act. Also, the advertisement or prospectus issued or published by the developer must mention the website address of the authority, where all details of the registered project have been entered along with the registration number obtained from the authority.

Que.46 : Can a Real Estate developer leave the project mid way by selling to another Developer and Party?

Ans: Yes, a developer can do so by taking written approval of 2/3rd of project’s consumers and also the prior approval of the RERA. If a consumer or his family holds more than one unit in the project then he/she will be considered as one consumer only.

Que.47 : Is it permissible to sell parking to allottees?

Ans: The position of parking is as follows:
(a) Open Parking Area: This has been clearly included in the definition of “Common Areas” which need to be conveyed to the Association of Allottees after Occupancy Certificate is received. Hence, sale or allotment of open Parking Areas by the Promoter is not permissible.
(b) Covered Parking as defined in the RERA is permitted to be sold.
(c) Garage as defined in the Act is permitted to be sold.

Que.48 : Can a promoter or a real estate agent also file complaint against a buyer?

Ans: Yes. An aggrieved person having any interest in the registered real estate project can file complaint.

Que.49 :How does the Act Impact Joint Promoters or joint Venture Agreements or cases of joint development with land owner on revenue share basis or area share basis, where landlord and promoter are two different parties but both are beneficiaries of sale of project?

Ans: The Act makes both the Promoters and the landlord or any such parties which are beneficiary of a sale of a project and receive payments from allottees as Co-Promoters and hence liable to adhere to the provisions of the Act and Rules and Regulations made there under.

Que.50 : Is insurance of the project compulsory? What are the provisions regarding Insurance?

Ans: Promoter has to obtain all such insurance as notified by the State Government. So insurance will be compulsory only after the Notification is issued by the State Government. The Act says that the State Government can prescribe various types of insurance including but not limited to-
a) Title of the land and building as a part of the real estate project; and
b) Construction of the real estate project.

The promoter is liable to pay the insurance premium before transferring the same to the allottee / association of allottees. The documents related to insurance will have to be handed over to the association of allottees when the same is formed.

Que.51 : Is this registration transferable to another agent or to other state where agents intend to shift his office?

Ans: No

Que.52 : Even if real estate agent has not taken any commission from client and taken it from promoter, can the agent still be responsible and liable for builder’s default?

Ans: The agent’s liability is in accordance with Section 10 of the Act. He is not held liable for the promoter’s default.

Que.53 : If real estate agent is not listed with promoter’s registration at RERA website, still can he sell in this project?

Ans: No. If the promoter has not included the real estate agent’s name at the time of registration, it will have to be included by the promoter, subsequently, and up dated in the RERA website. The real estate agent can operate in the project only thereafter.

Que.54 : Will RERA protect Agents for their commissions not paid by builder or by parties to the deal?

Ans : No, these will be guided by the agreements that real estate agents have with the concerned promoters or Allottees.

Que. 55: What if promoter gives false information or documents to real estate agent and agent acts upon such information, will he be liable?

Ans: Under Section 12 of the Act, it is the obligation of the promoter regarding veracity of advertisement and prospectus. The agent is liable if he makes a false or misleading representation concerning the services that he intends to offer.

Que.56: Is Agent authorized to sign on behalf of his promoter ! builder?

Ans: No, Agent is not authorized to sign on behalf of his promoter , builder.