Minister of Housing has formulated Draft Real Estate Rules under the Real Estate (Development and Regulation) Act, 2016 coming into force on first of May this year. The government is seeking suggestions and objections from the public within two weeks (till July 8th).
The Logical Buyer brings to you the draft RERA Rules in an easy to understand language. Help spread the word and share this article with all homebuyers. This article covers only the rules and regulations for the projects. Powers of regulator and functioning of the Authority will be covered separately.
1) Important points that matter to homebuyers
The Delay Penalty
We know everyone is most interested in the Delay Penalty to be paid. The Rules says:
“Rate of interest payable by the promoter and the allottee.- The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India Prime Lending Rate plus two percent”.
In simple terms, the delay penalty to be paid by the buyer in the event of delay in payments and penalty paid by the developer in the event of delay is equal.
The current Prime Lending Rate of SBI is 14.05, that makes the interest or penalty at 14.05% + 2% = 16.05%
Timelines for refund
Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter, shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with applicable interest and compensation, if any, becomes due.
Applicability on the existing project
So far, the RERA Act and the RULES do not suggest exclusion of any project. The RULES read that any project where Completion Certificate has not been obtained should file all details with the Regulator.
Promoters of all ongoing projects which have not received completion certificate shall make an application to the Regulatory Authority.
From the above rules and many other references, it is clear that RERA rules are applicable to existing projects where Completion Certificate is not received. Please do not confuse it with Occupancy Certificate (OC), OC can be obtained for partial completion of projects i.e few towers but CC is for the whole development.
Disclose Carpet Area of existing projects too
The promoter shall disclose the size of the apartment based on carpet area even if earlier sold on any other basis such as super area, super built up area, built up area etc. which shall not affect the validity of the agreement entered into between the promoter and the allottee to that extent.
It should be noted that it is just the disclosure of Carpet Area of existing projects and does not have any effect on the agreements already signed. This would surely help homebuyers who are buying properties in the Resale market as they would know the actual Carpet Area of the end product and can easily compare between two projects.
2) Other significant Rules
The Era of soft launch projects to go. Builder can’t sell anything before the project is approved by the Regulator.
Agreement for sale
The promoter shall enter into an agreement for sale with the allottees as provided by the Regulator.
Act will provide a standard agreement and the era of one-sided agreement ends now.
Information and documents to be furnished by the promoter for registration of project.
The promoter should furnish the following details
- PAN Card, Audited balance sheet and Income tax returns of the promoter(s).
- Copy of the legal title deed reflecting the title of the promoter to the land on which development is proposed to be developed
- Number of open parking areas available in the said real estate project;
- Encumbrances on the land on which development is proposed including any rights, title, interest or name of any party in or over such land
Disclosure of existing projects by promoter – (status and carpet area etc)
It is now mandatory for developers to disclose all ongoing/existing information.
The promoter shall disclose all project details as required under the Act and the rules and regulations made thereunder, including the status of the project and the extent of completion.
It may help homebuyers to check the status, quality or the product developed by the builder.
Registration of Real Estate Agents
Every real estate agent required registering under the Act. The registration will be valid for a period five years. Here are some rules for the same:
- brief details of his enterprise including its name, registered address, type of enterprise (proprietorship, societies, partnership, companies etc.);
- particulars of registration including the bye-laws, memorandum of association, articles of association etc. as the case may be
- photograph of the real estate agent if it is an individual and the photograph of the partners, directors etc. in case of other entities;
- authenticated copy of the PAN card and income tax returns.
- authenticated copy of the address proof of the place of business;
The real estate agent shall pay a registration fee of rupees twenty-five thousand in case of the applicant being and individual or rupees two lakh fifty thousand in case of the applicant being anyone other than an individual.
3) Regulator Website to have data of all Projects, Promotors, and Agents
The regulatory authority shall ensure that the following information shall be made available on its website in respect of each project registered including the web link to the developer or group website and project.
(a) Details of the promoter including the following:
a brief detail of his enterprise including its name, registered address, type of enterprise
background of promoter- educational qualification, work experience and in case of a newly incorporated or registered entity work experience of the parent entity.
(b) Track record of the promoter:
number of years of experience of the promoter or parent entity in real estate construction in the state/union territory;
number of years of experience of the promoter or parent entity in real estate construction in other states or union territories;
the number of completed projects and area constructed till date; (D) number of ongoing projects and proposed area to be constructed;details and profile of ongoing and completed projects for the last 5 years as provided under.
Details of past or ongoing litigations in relation to the real estate project.
(d) Compliance and registration
authenticated copy of the approvals and commencement certificate from the competent authority
the sanctioned plan, layout plan and specifications of the project or the phase thereof, and the whole project as sanctioned by the competent authority as provided
details of the registration granted by the Authority.
(e) Apartment and garage related details
Details of the number, type and carpet area of apartments for sale in the project
Details of the number and areas of garage for sale in the project
Details of the number of open parking areas available in the real estate project.
(f) Registered Agents: Names and addresses of real estate agents.
(g ) Consultants:
Details, including name and addresses, of contractors, architect and structural engineers and other persons concerned with the development of the real estate project
(f) Development Plan:
The plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof including fire fighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy etc
Amenities: a detailed note explaining the salient features of the proposed project including access to the project, design for electric supply including street lighting, water supply arrangements and site for disposal and treatment of storm and sullage water, any other facilities, and amenities or public health services proposed to be provided in the project;
Gantt Charts and Project schedule: the plan of development works to be executed in the project and the details of the proposed facilities to be provided thereof.
(g) Financials of the promoter
4) Promoter is required to upload following details of project
The promoter shall upload the following updates on the webpage for the project, within seven days from the expiry of each quarter:
List of number and types of apartments or plots, as the case may be booked and List of number of garages booked;
Status of the project:
(A) Status of construction of each building with photographs;
(B) Status of construction of each floor with photographs;
(C) Status of construction of internal infrastructure and common areas with photographs.
Status of approvals:
(A) Approval received;
(B) Approvals applied and expected date of receipt;
(C) Approvals to be applied and date planned for application;
(D) Modifications, amendment or revisions, if any, issued by the competent authority with regard to any license, permit or approval for the project.
5) Documents available for Download
Following documents will be available for download from the regulator website.
No Objection certificates; Consent to Establish and Operate; Environmental Clearance; Fire NOC; Permission from Water and Sewerage department; Height clearance from Airport Authority of India; Such other approvals as may be required and obtained for the project.
Authenticated copy of the license or land use permission, building sanction plan and the commencement certificate from the competent authority obtained
Authenticated copy of the site plan or site map showing the location of the project land along with names of revenue estates, survey numbers, cadastral numbers, khasra numbers and area of each parcels of the project land;
Authenticated copy of the layout plan of the project or the phase thereof, and also the layout plan of the whole project as sanctioned by the competent authority;
Floor plans for each tower and block including clubhouse, amenities and common areas;
Authenticated copy of occupancy certificate and completion certificate including its application.
Details including the proforma of the application form, allotment letter, agreement for sale and the conveyance deed;
Authenticated copy of the legal title deed
Land Title Search Report from an advocate having experience of at least ten years in land related matters;
Details of encumbrances on the land on which development is proposed
From banks for construction finance;
From banks for home loan tie-ups.
The Rules are defined by the Central government. The state government will have to draft their rules under these model rules only.