Foxes have dens and birds have nests, but the Son of Man has no place even to lay his Head - Mathew 8:20, New Testament, Bible.

If you are a resident of one of the metropolitan cities of our nation, India or even the second tier cities for that matter, chances are you would have observed a significant rise in the construction of high rises in your respective city.17,526,isthe number of housing projects launched between 2011 and 2015 in India. The investment value of these projects added up to Rs.13.7 trillion in 27 cities (including 15 state capitals). The real estate sector is the second largest employer, which contributes 9% to India’s GDP. The industry includes about 10 lakh consumers buying houses every year and 76,044 companies. Surprisingly, inspite of being such an important part of the economy, it was a largely unregulated sector due to which there were cases of extreme hardships faced by the consumers. Before, that is the implementation of this passed Real Estate Bill, the Real Estate Industry was govern by various Central, State and local regulation covering aspects such as ownership of flats, rent control, town planning and re- development to name a few. While there are several laws regulating the sector previously for instance the Consumer protection Act, 1968 and The Transfer of Property Act, 1882, consumers bear a sense of vulnerability when undertaking Real estate transactions. It was in1991, that the demand and subsequent brainstorming had commenced on having one Single & solid nationwide regulation for the fast growing Real estate Industry. Taking benefit of country’s abysmal judicial system, the developers have been taking property buyers for a ride, and putting real estate sector on the bottom of customer protection and satisfaction pyramid. With the things getting bad to worse, it has let to big hue and cry, making urgent need for a unified regulatory legal framework to protect customers’ interest.

To address the various structured issue in the Real Estate’s merky Sector, Real Estate Regulatory Authority (RERA) Bill was introduced by the Indian National Congress government in 2013.In December 2015, the Union Cabinet of India had approved 20 major amendments to the bill based on the recommendations of a Rajya Sabha committee that examined the bill and “The Real Estate (Regulation and Development) Act, 2016” which received the President’s assent on 25th March 2016 was enacted.

The salient features of the Act are the following:
Real Estate Regulatory Authority under section 20
Under the Bill, instead of a regular forum of consumers, the purchasers of real estate units from a developer would have a specialised forum called the "Real Estate Regulatory Authority" which will be set up within one year from the date of coming into force of the Act. In the interim, the appropriate Government (i.e., the Central or State Government) shall designate any other regulatory authority or any officer preferably the Secretary of the department dealing with Housing, as the Regulatory Authority.

Registration with the Regulatory Authority under section 3(1)
a) The promoter has to register their project (residential as well as commercial) with the Regulatory Authority before booking, selling or offering apartments for sale in such projects. In case a project is to be promoted in phases, then each phase shall be considered as a standalone project, and the promoter shall obtain registration for each phase.

b) Further, in case of ongoing projects on the date of commencement of the Act which have not received a completion certificate, the promoter of such project shall make an application to the Regulatory Authority for registration of their project within a period of three months of the commencement of the Act.

c) The following types of projects shall not be required to be registered before the Regulatory Authority:
Where the area of land proposed to be promoter does not exceed 500 square meters or the number of apartments to be constructed in the project does not exceed eight apartments. However, the appropriate Government (Central and State Government) may, if it considers appropriate, reduce the threshold limit below 500 square meters or eight apartments;

Projects where the completion certificate has been received prior to the commencement of the Act;

Projects for the purpose of renovation or repair or re-development which does not involve marketing, advertising, selling and new allotment of any apartment plot or building.
The application for registration must disclose the following information:

Details of the promoter (such as its registered address, type of enterprise such proprietorship, societies, partnership, companies, competent authority);

A brief detail of the projects launched by the promoter, in the past five years, whether already completed or being developed, as the case may be, including the current status of the projects, any delay in its completion, details of cases pending, details of type of land and payments pending;

An authenticated copy of the approval and commencement certificate received from the competent authority and where the project is proposed to be developed in phases, an authenticated copy of the approval and commencement certificate of each of such phases;

The sanctioned plan, layout plan and specifications of the project, plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof and the locational details of the project;

Proforma of the allotment letter, agreement for sale and conveyance deed proposed to be signed with the allottees;

Number, type and carpet area of the apartments and the number and areas of garages for sale in the project;

The names and addresses of the promoter's real estate agents, if any, and contractors, architects, structural engineers affiliated with the project; and

A declaration by the promoter supported by an affidavit stating that:
he has a legal title to the land, free from all encumbrances, and in case there is an encumbrance, then details of such encumbrances on the land including any right, title, interest or name of any party in or over such land along with the details;

the time period within which he undertakes to complete the project or the phase; and 70% of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose.

Carpet Area under section (2(k)
Under the Bill, developers can sell units only on carpet area, which means the net usable floor area of an apartment. This excludes 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.

70% of realisation from buyers/allottees in a separate bank account under section 4(D)
The Act mandates that a promoter shall deposit 70% of the amount realised from the allottees, from time to time, in a separate account to be maintained in a scheduled bank. This is intended to cover the cost of construction and the land cost and the amount deposited shall be used only for the concerned project.
The promoter shall be entitled to withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project. However, such withdrawal can only be made after it is certified by an engineer, an architect and chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project.
The promoter is also required to get his accounts audited within six months after the end of every financial year by a practicing chartered accountant. , Further, he is required to produce a statement of accounts duly certified and signed by such chartered accountant, and it shall be verified during the audit that (i) the amounts collected for a particular project have been utilised for the project; and (ii) the withdrawal has been in compliance with the proportion to the percentage of completion of the project.

Acceptance or refusal of registration under section 5(1)
Upon receipt of an application by the promoter, the Regulator Authority shall within a period of 30 days, grant or reject the registration.
Upon granting a registration, the promoter will be provided with a registration number, including a login Id and password for accessing the website of the Regulatory Authority and to create his web page and to fill in the details of the proposed project.
If the Regulatory Authority fails to grant or reject the application of the promoter within the period of 30 days, then the project shall be deemed to have been registered.
The registration, if granted, will be valid until the period of completion of the project as committed by the promoter to the Regulatory Authority. This period shall be extended by the Regulatory Authority for a period not exceeding one year in aggregate, only due to force majeure and on payment of such fee as may be specified by regulations made by the Regulatory Authority.

Revocation or lapse of registration under section 8
The Regulatory Authority may revoke the registration granted on receipt of a complaint orsuo motoor on the recommendation of the competent authority in case (i) the promoter makes a default in doing anything required under the Act or the rules or regulations made thereunder; (ii) the promoter violates any terms of the approvals granted for the project; and (iii) the promoter is involved in any kind of unfair practice of irregularities.
In the event the registration is revoked by the Regulatory Authority or it lapses, the Regulatory Authority shall:
debar the promoter from accessing the website in relation to the project, specify his name in the list of defaulters on its website and also inform other Regulatory Authorities in other States and Union territories about such cancellation;
facilitate the remaining development works to be carried out by competent authority or the association of allottees or in any other manner as may be determined by the Regulatory Authority. However, the association of allottees shall have a first right of refusal for carrying out the remaining development works; or
direct the scheduled bank holding the project bank account, to freeze the account and thereafter take such further necessary actions, including consequent de-freezing of the account, for facilitating the remaining development works in the manner mentioned above.

Website of the Regulatory Authority under sections 34 (b) (c) & (d)
The promoter shall, upon receiving his login Id and password, create his web page on the website of the Regulatory Authority and enter all details of the proposed project including:
details of the registration granted by the Regulatory Authority;
quarterly up-to-date list of the number and types of apartments or plots or garages, as the case may be, booked;
quarterly up-to-date status of the project along with the list of approvals obtained and approvals pending subsequent to commencement certificate; and
such other information and documents as may be specified by the regulations made by the Regulatory Authority.

Advertisement or prospectus issued by the promoter under sections 2(b) & 2(zl)
The advertisement or prospectus issued or published by the promoter should prominently mention the website address of the Regulatory Authority, where all details of the registered project have been entered and include the registration number obtained from the Regulatory Authority and other similar details.

Where any person makes an advance or a deposit on the basis of the information contained in the notice, advertisement or prospectus and sustains any loss or damage because of any incorrect, false statement included in these, he shall be compensated by the promoter in the manner as provided under the Act. Also, if the person affected by such incorrect, false statement contained in the notice, advertisement or prospectus, intends to withdraw from the proposed project, his entire investment (along with interest at such rate as may be prescribed and compensation in the manner provided under the Act), will be returned to him.

Limit on receipt of advance payment under section 13(1)
A promoter shall not accept a sum more than 10% percent of the cost of the apartment, plot, or building, as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement of sale with such person and register the said agreement of sale, under any law for the time being in force.

Restriction on addition and alteration in the plans under section 19(4)
The promoter cannot make any addition or alteration in the approved and sanctioned plans, structural designs, specifications and amenities of the apartment, plot or building without the previous consent of the allottee.
The promoter also cannot make any other addition or alteration in the approved and sanctioned plans, structural designs and specifications of the building and common areas within the project without the previous written consent of at least two-thirds of the allottees, other than the promoter, who have agreed to take apartments in such a building.

Structural defect under section 14(3).
In case any structural defect or any other defect in the workmanship, quality or provision of services or any other obligations of the promoters is brought to the notice of the promoter within a period of five years by the allottee from the date of handing over possession, the promoter shall rectify such defect without any further charge, within thirty days. If the promoter fails to rectify such defect within such time, the aggrieved allottee shall be entitled to receive appropriate compensation in the manner as provided in the Act.

Restriction on transfer and assignment under section 15(1).
The promoter shall not transfer or assign his majority rights and liabilities in respect of a project to a third party without obtaining prior written consent from two-thirds of the allottees, except the promoter, and without the prior written approval of the Regulatory Authority.

Please note that the allottee, irrespective of (i) the number of apartments or plots booked by him or booked in the name of his family; or (ii) in the case of other persons such as companies/firms/any association of individuals, by whatever name called, booked in its name or booked in the name of its associated entities/related enterprises, shall be considered as one allottee only.
Refund of amount in case of delay in handing over possession under section 19(4).

In case the promoter is unable to hand over possession of the apartment, plot or building to the allottee (i) in accordance with the terms of the agreement of sale; or (ii) due to discontinuance of his business as a promoter on account of suspension; or (iii) revocation of his registration or for any other reason, then the promoter shall be liable, on demand being made by the allottee, to return the amount received by him from the allottee with interest and compensation at the rate and manner as provided under the Act. This relief will be available without prejudice to any other remedy available to the allottee.

However, where an allottee does not intend to withdraw from the project, he shall be paid interest by the promoter for every month of delay, till the handing over of the possession, at a prescribed rate.

Other relevant provisions
The same rate of interest will be payable by the allottee and the promoter in the event of their respective defaults. (section 2(za)(1)
In the absence of any local laws, an association or society or cooperative society, as the case may be, of the allottees, shall be formed within a period of three months of the majority of allottees who have booked their plot or apartment or building, as the case may be, in the project. (section 11(4)(e)

After the promoter executes an agreement for sale for any apartment, plot or building, no mortgage or charge can be created by the promoter on such apartment, plot or building. If any such mortgage or charge is created, then notwithstanding anything contained in any other law for the time being in force, it shall not affect the right and interest of the allottee who has taken or agreed to take such apartment, plot or building.(section 11(4)(h).
The promoter may cancel the allotment only in terms of the agreement for sale. However, the allottee may approach the Regulatory Authority for relief, if he is aggrieved by such cancellation and such cancellation is not in accordance with the terms of the agreement for sale, is unilateral and without any sufficient cause. (section 11(5).

The promoter shall obtain insurance as may be notified by the appropriate Government, including but not limited to the title of the land and building and construction of the project. The promoter shall also be liable to pay the premium and charges in respect of the insurance. (section 16(1).

The promoter shall execute a registered conveyance deed in favour of the (i) allottee in respect of the apartment, plot or building; and (ii) association of allottees of competent authority in respect of the undivided proportionate title in the common areas, and hand over possession of the same within the period as specified under the local laws. In the absence of any local law, such conveyance deed shall be carried out by the promoter within three months from date of issue of the occupancy certificate. (section 17(1).

The promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land in the manner as provided under the Act, and such claim for compensation shall not be barred by limitation provided under any law for the time being in force. (section 18(2).

Every allottee shall take physical possession of the apartment, plot or building as the case may be, within a period of two months of the occupancy certificate issued for the said apartment, plot or buildings.(section 19(10).

Real Estate Appellate Tribunal under section 43.
In addition to the establishment of the Regulatory Authority, the Bill also proposes to establish a Real Estate Appellate Tribunal (Appellate Tribunal) within one year from the date of commencement of the Act.
Any person aggrieved by any direction or decision made by the Regulatory Authority or by an adjudicating officer, may make an appeal before the Appellate Tribunal within a period of 60 days from the date of receipt of a copy of the order or direction.
The Appellate Tribunal shall deal with the appeal as expeditiously as possible and endeavour shall me made to dispose of the appeal within a period of sixty days from the date of receipt of appeal.
The Appellate Tribunal shall have same powers as a civil court and shall be deemed to be a civil court. An appeal against the order of the Appellate Tribunal may be filed before the jurisdictional High Court within a period of sixty days from the date of communication of the decision or order of the Appellate Tribunal.

Adjudicating Officer under section 71(1).
For adjudging the compensation to be paid by the promoter in accordance with the provisions of the Act, the Regulatory Authority shall appoint (in consultation with the appropriate Government) one or more judicial officers as deemed necessary, who is or has been a District Judge, to be an adjudicating officer for holding an inquiry in this regard. However, such an appointment will be made after giving any person concerned a reasonable opportunity of being heard.

Offences and Penalty under chapter VIII.
Stringent penal provisions have been prescribed under the Act against the promoter in case of any contravention or non-compliance of the provisions of the Act or the orders, decisions or directions of the Regulatory Authority or the Appellate Tribunal which are the following:
If promoter does not register its project with the Regulatory Authority – the penalty may be up to 10% of the estimated cost of the project as determined by the Regulatory Authority;
If promoter does not comply with the aforesaid order of the Regulatory Authority - imprisonment of up to three years and a further penalty of up to 10% of the estimated cost, or both; and
In case the promoter provides any false information while making an application to the Regulatory Authority or contravenes any other provision of the Act – the penalty may be up to 5% of the estimated cost of the project or construction.

These penal provisions have also been prescribed for any contravention or violation committed by the real estate agent or the allottee.

If any allottee fails to comply with, or contravenes any of the orders, decisions or directions of the Regularity Authority, there may be a penalty for the period during which such default continues, which may cumulatively extend up to 5% of the cost of the plot, apartment or building, as the case may be, as determined by the Regulatory Authority. Further, if any allottee fails to comply with, or contravenes any of the orders or directions of the Appellate Tribunal, this may entail imprisonment up to one year or with fine for every day during which such default continues, which may cumulatively extend up to 10% of the cost of the plot, apartment or building, as the case may be, or with both.

Overriding effect under section 89.
The provisions of this Act shall have an overriding effect in case there is any inconsistency between the provisions contained in this Act and in any other law (including a state law) for the time being in force.

Some starling rulings of MAHA RERA:
Neelkamal Pvt Ltd & Anr. Vs. Union of India and Ors (WP No.2737 of2017)
(Validity of The Real Estate (Regulation and Development) Act, 2016).
Facts: The Apex Court by an order dated 4th September, 2017, in Transfer Petition (Civil) Nos. 1448 – 1456 of 2017 directed other high courts in the country to wait for the Bombay High Court to decide all pleas and petitions challenging the validity of the RERA Act. The petitioners were builders and developers who were aggrieved by the new provisions of the said Act which contains specific provisions to tackle problems like delay in possession, arbitrary interests levied on home buyers etc. Petitioners had challenged Section 3, 5, 7, 8, 11(h), 14(3), 15, 16, 18, 22, 43(5),59,60,61,63 and 64 of the Real Estate (Regulations and Development) Act, 2016 and Rules 3(f), 4,5,6,7,8,18,19, 20 and 21 of the Registration of real estate projects, Registration of real estate agents, rates of interest and disclosures on website) Rules, 2017. It was argued on behalf of the promoters/petitioners that penalties under Sections 18, 38, 59, 60, 61, 63 and 64 of the RERA Act, are violative of Articles 14, 19(1)(g) and 20(1) of the Constitution of India and amount to unreasonable restrictions.

Decision: The HC held that these provisions were merely regulatory or compensatory, not penal. Justice Naresh Patil vocalized- “I have already indicated that the provisions of RERA are prospective in nature. The penalty under Sections 18, 38, 59, 60, 61, 63 and 64 is to be levied on account of contravention ofprovisions of RERA, prospectively and not retrospectively. These provisions, therefore, cannot be said to be violative of Articles 14, 19(1)(g), 20(1) and 300-A of the Constitution of India.” The Hon’ble Division further observed that ,We hold that challenge to constitutional validity of first proviso to Section 3(1), Section 3(2)(a), explanation to Section 3, Section 4(2)(l)(C), Section 4(2)(l)(D), Section 5(3) and the first proviso to Section 6, Sections 7, 8, 18, 22, 38, 40, 59, 60, 61, 63, 64 of the Real Estate (Regulation and Development) Act, 2016 fails. These provisions are held to be constitutional, valid and legal.” The Hon’ble bench held that that when “construed harmoniously’’, sections 3,4, 5,6, 7 and 8 (dealing with revocation of registration) objected to by petitioners are not discriminatory nor do they violate the rights to property and freedom of trade. “These provisions impose reasonable restrictions on the promoter in larger public interest. They regulate construction activities.’’Regarding section 18 which makes a promoter liable to compensate a buyer for delay in possession even if he withdraws from a project, the HC found nothing unconstitutional. “Its purpose is to ameliorate the buyers in real estate sector and balance the rights of all the stakeholders. It seeks to protect the allottees and simplify the remedying of wrongs committed by a promoter,’’ held the HC adding, “It ensures that a buyer’s money is not misused or unreasonably retained by the promoter.’’ However, Section 46 (b) of the Act was set aside as it included any officer who has held the post of Additional Secretary to be eligible for membership of the two-member tribunal. Court held that the majority of the total members of the tribunal. Court held that the majority of the total members of the tribunal should always be judicial members.

Mr. V.M. Gawand Vs. M/s. Grace Erectors of Companies, Builder& Developers (COMPLAINT NO: CC006000000001070)
(The Real Estate (Regulation and Development) Act, 2016 not for specific performance of an agreement)
Facts: The complainant who was the Chairman of the Wadala Co-operative Housing Society Ltd has filed complaint against Grace Erectors of Companies, Builders and Developers alleging that the developer delayed the possession of 48 flats and occupancy certificate (OC) to its members for more than five years.The society stated that it had executed a development agreement with the developer in December 2005 and registered a confirmation deed in February 2007, to give peaceful possession of the 48 flats (measuring 600 sqft carpet each duly constructed and completed along with OC free of cost) to the society within 36 months from the date of commencement certificate. (given in November 2006). However, the developer modified the plan and got approval in December 2009 and started work. The developer was supposed to give possession of the flats on or before 2012 but till date, he has not handed over the flats to the managing committee.The developer denied the allegations and stated that (MahaRERA) wasn't the forum wherein the complainant can enforce the terms and condition of the development agreement and therefore requested to dismiss the complaint.

Decision: The Hon’ble Authority observed thatthe complainant was making grievances for the breach of terms and conditions of the development agreement. The MahaRERA is not the forum for settlement of such disputes regarding the specific performance of the development agreement with the respondent. It is evident that the dispute between the complainant and the respondent is of civil nature and does not pertains to any violation or contravention of the provisions of the Real Estate (Regulation and Development Act, 2Ol6 or Rules or Regulations mode there under and hence, dismissed the complaint.

Mahesh Pariani Vs. Monarch Solitaire LLP (COMPLAINT NO: CC006000000000789)
(The Real Estate (Regulation and Development) Act,2016is not for investors or co-promoters)
Facts:The Complainant has invested some amount in the residential Project known as 'Monarch Solitaire' and reserved four apartments in the said Project in 2014. The said Project is registered under MahaRERA. The Complainant stated that after reservation of four apartments, Respondent neither gave his invested money back with interest nor is giving the possession of the apartments earmarked for him. Therefore, he prayed that Maha RERA pass an appropriate order for recovery of the principal amount with interest.

Decision:While going through the documents, the authority found out that Pariani and developer had signed a ‘Memorandum of Understanding (MoU)’ on March 12, 2014 that made it clear that Pariani is an investor and not an allottee. The authority further observed that, it is evident that the dispute between the complainant and the respondent (developer) is of a civil nature between the promoter and co-promoter, and does not pertain to any contravention of the ReaI Estate (Regulation and Development) Act, 2016. The complaint was therefore, dismissed.

CONCLUSION:
The Real Estate (Regulation And Development) Act, 2016, has very noble cause behind its implementation that is to tackle the issues of lack of transparency and accountability plaguing the real estate sector, by providing strict mechanisms to facilitate and regulate the sale and purchase of commercial and residential units/projects and advocating timely completion of projects by all promoters, regardless of their standing in the market. Upon keen observation, the act makes and interesting departure from its predecessors. While terms carpet area had multiple meanings and interpretations ascribed to them earlier, the act seeks to remove such ambiguity. The establishment of an authority is bringing more accountability for the developers and some simultaneously some much needed assurances to buyers/allottee. The Real Estate and Regulatory Authority Rules (RERA) 2017 came into effect in Maharashtra on May 2017.

Since then, MahaRERA has received 16,802 applications from developers, of which it has granted registration to 16,665. In the same period, a total of 14,881 applications were received from the real estate agents of which it granted registration to 14,762 applications. The authority also received 2,866 complaints. While it has already passed orders in 1,637 complaints, hearing is in the process for 891 complaints and the authority is yet to receive documents in 170 complaints. In case of complaints where either of the party isn't happy with the order passed by the authority, they can approach the Maharashtra Real Estate Appellate Tribunal. The tribunal has received 219 appeals till now and orders have been passed in 74 appeals, while it is in process of hearing 93 appeals. It is yet to receive documents in 52 cases. The authority has even started a conciliation forum, which comprises of two members in every bench, one is from consumer forum while the other is from the developers body like NAREDCO, MCHI-CREDAI and CREDAI.

The MahaRERA conciliation forum has received 171 conciliation requests, out of which the promoters consent was received in 88. Hearing has been completed in 53 requests, while it is being conducted for 12 conciliation requests. The market situation after one year is that, there have been fewer project launches and the focus has been on execution. Developers have tried to adhere to compliances, to avoid litigation. Relaxed delivery timelines for existing projects has granted developers an escape window. The Act is a positive change in terms of increasing transparency in the real-estate sector, increasing accountability of the promoters and developers and establishing efficient forums for grievance redress. This will consequently lead to lower litigation due to stringent rules and regulations in the highly corrupt sector. Time bound approvals and transparency will also lead to greater flow of investment both domestic and foreign leading to reduction in cost of borrowing in the real-estate sector. Though it is a win-win situation for both the reputed bona- fide developers and the buyers and will help the sector grow in the long-run.

References:
1)The Real Estate (Regulation And Development) Act, 2016, by Taxmann.
2) RERA, The Real Estate by Jayesh Ganatra.
3) THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016 AND RULES 2017 by Housing Guru Ramesh Prabhu (Author), MAHASEWA (Contributor).
4) Snow White's The Real Estate (Regulation and Development) Act, 2016 with Maharashtra Rules, 2017 by Adv. Sunil Dighe.
5)https://maharera.mahaonline.gov.in/Site/ViewPDFList?doctype=JJOR51FGWTx3l9ECa2Nqi4MLaPgdY62gSrI8EwovEm_82MyI_yr8B9YKWz/j21gdRihED0QgKuiIM7K28_bs5zoasxOZJHpdusYbp_NtxMQ=
6)http://www.mondaq.com/
7)https://economictimes.indiatimes.com/news/economy/indicators/economic-survey-housing-sectors-share-in-gdp-of-india-to-rise-to-6/articleshow/12276533.cms.
8)https://indianexpress.com/article/what-is/what-is-rera-
9)https://www.livemint.com/Politics/7OqlH8FC5TtrlMhbQdehbO/News-in-numbers--Real-estate-sector-contributes-9-to-India.html.