Consumer Expectations from Real Estate Developers

Food
Clothing
Shelter
2Presented by CA. Neha Sethi

Expectations of Consumers from
Developer and Government
Developer
Time
Manage
ment
Transpa
rency
Afforda
ble
Faciliti
es
Government
Subsidy
Tax
Relaxa
tions
Grievance
Redressal
Loan

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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 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.

Contents of Act
The Real
Estate
Act,2016
92
Sections
10
Chapters

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)

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.

(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.

(Zk) Promoter
 Person who constructs building
Converts existing building into apartments
Develops land into project
 Development authority or any public body
 Apex state level co-operative housing society
 Any other person
Explanation: Developer and seller are different
person for the same project then both shall be
deemed to be developer.

(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

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

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.

Sec. 4 Application for registration
of Real Estate Project
1. Application in such manner as may be prescribed with such fees
2. 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

 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

• 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

Sec. 7 Revocation of Registration
Registration can be revoked on following grounds:-
 Complaint, suomotu, recommendation of competent authority
1. Default in doing any act required by act
2. Violation of terms and conditions of competent authority
3. 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

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.

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

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

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

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

 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)

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

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

Sec. 16 Obligation of Promoter Regarding
Insurance of Real Estate Project

 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

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

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

Time Limit for Filing Appeal
Appeal to be disposed of Within 60 Days of filing of appeal
Not disposed of Reasons to be recorded in writing for delay
Provide Opportunity of Being Heard
Interim Order Final Decision or Order
Time Limit
Within 60 days of Receiving of Order
(accompanied with such fees as may be prescribed)
Appeal Can be entertained after expiry of time limit
if supported by sufficient cause
Appeal to high Court Within 60 days of receiving of order of AT
(Delay may be condoned if supported by sufficient cause 32Presented by CA. Neha Sethi

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

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.

Right to Legal Representation
CS
CA CMA
Legal
Practitioner

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

Sec. 73 to 78 Finance, Accounts, Audit, and
reports
CG may grant loans after
appropriations by Parliament
Grant of loans by
State Govt.
Constitution of Fund
-Real Estate
Regulatory Fund
-Govt. Grants
-Fees Received
-Interest accrued on
above
Fund of union
territory shall be
credited to
consolidated funds of
India
In case of SG as
specified

 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

Thanks & Regards
Presented By:-
CA. Neha Sethi
Email: neha.sethi@jharjai.com
It would be grateful if you provide feedback on
neha.sethi@jharjai.com

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