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Maharashtra, first state to implement RERA
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Maharashtra, first state to implement RERA
Publish on : 2017-07-18 07:38:13
In a move that could bring cheer to the faces of many home-buyers, Maharashtra is all set to become the first state in India to implement the Real Estate (Regulation and Development) Act, 2016, which has many provisions that will help new buyers, while penalising non-complying real estate developers. The bill was passed in both Houses of the Parliament in May 2016. While the law has been passed by the Central government, the states have the power to amend rules and regulations. On Thursday, the Maharashtra government asked the common man for suggestions to the draft law — which has been uploaded to the government's official website. Suggestions for the draft bill will be accepted until 23 December. "We will be the first state to implement this law. We are always there for the consumers. Any consumer who feels that he or she is facing any kind of injustice can approach the tribunal to address their grievances," Prakash Mehta, the housing minister said. Some key features of the bill are: 1) Upto now, a builder usually sells the property based on the build up area. Built-up Area is the carpet area plus the outer walls. Once the new rules are implemented, builders have to instead sell the property on carpet area. Carpet Area is the area enclosed within the walls, actual area to lay the carpet. This will help customers to pay only the amount for the area they will be occupying. 2) Charges for parking area have to be shown in the official agreement. 3) The onus of completing a project within a particular time frame lies on the real estate developer, failing which the developer would face penalty and also be sentenced to three years in jail. 4) To protect customers from being fleecing by estate agents, every agent has to register himself with the government. 5) To tackle the problem of increasing ghettoisation in urban India, the law prohibits builders from barring any potential customer on the basis of religion, caste, cultural or food preferences. 6) A builder cannot change the layout plan of building without the written approval of about 66 per cent of the buyers. 7) To enable more transparency in property transaction, the builder has to give every detail regarding the project to the prospective buyer. 8) If there is any delay in delivering the property, or if the buyer is not satisfied with the property, then he or she can claim a full refund within 15 days of buying it. The builder can be penalised too. To address the grievances of property buyers, the law mandates the formation of a Maharashtra Regulatory Authority Board as a tribunal. The tribunal will comprise of the chief justice of the high court, the law and judiciary secretary and the housing secretary. Here's a more detailed look at the draft rules: Key Features of the Draft Rules As per the Section 84 of the Real Estate (Regulation and Development) Act, 2016 the State Government has made the following rules for carrying out the provisions of the Act : 1. The Maharashtra Real Estate (Regulation and Development)( Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2016. 2. The Maharashtra Real Estate Regulatory Authority, Officers and Employees (Appointment and Service Conditions) Rules, 2016 3. The Maharashtra Real Estate Appellate Tribunal, Officers and Employees (Appointment and Service Conditions) Rules, 2016 4. The Maharashtra Real Estate (Regulation and Development) (Recovery of Interest, Penalty, Compensation, Fine payable, Forms of complaints and Appeal, etc.) Rules, 2016 One more rule regarding budget and keeping of records is in the process of being vetted by Comptroller and Auditor General office and Finance Department of Government of Maharashtra. The features of The Maharashtra Real Estate(Regulation and Development)( Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2016 includes : a. Definition of Parking Space has been added : as it is prevalent in the Real Estate Sector of Maharashtra to give details of Parking Spaces by the Promoter (Rule 2(o)) b. The Promoter is required to furnish the details while registering the project : i) Title Report of the land to be submitted by the practicing Advocate reflecting the flow of the title: Which would save common man from examining voluminous documents pertaining to the title of the land. ( Rule 3(2)(c )) ii) Disclosure by the Promoter about his intention of consuming the FSI : It is the general practice that the approvals to the Real Estate Projects are available in stages/phases. Hence approved plan doesnot reflect the total development proposed by the developer on the project land. The consumer must be informed about the total development which the developers intend to carry. (Rule 3(2)(e)) iii) Use of construction Technology and Design Standards iv) Nature of organistion of Allottes to be constituted. v) The Authority may ask for more information or documents. Registration Fees for Real Estate Project Rs. 1 per Square Meter for project where area of land proposed to be developed is less than 1000 Square Meter Rs. 2 per Square Meter for projects where area of land proposed to be developed is more than 1000 Square Meters ( rule 3(5)) Registration exempted for renovation, repairs or redevelopment which doesnot involve marketing, advertisement, selling or new allotment of any apartment or structural repairs, rehabilitation buildings being constructed under any scheme of law ( rule 3(6)) Withdrawal charges would be determined by regulations ( Rule 3(7)) The Promoter has to disclose land cost, cost of construction and estimated cost of the real estate project as required under the Act : Since penalty is levied on the cost of the project these information is necessary ( rule 3(8)) All projects where occupancy certificates to all the building under sanctioned Plan not received needs to be registered with Authority (rule 4(1)) Status of ongoing projects be disclosed as per the last sanctioned plan and also about the status of development of common areas along with expected period of completion to be disclosed. CA to certify the amount of receivables in respect of sold/allotted apartments and estimated receivables calculated on ASR rates for unsold apartments( rule 4(2)) Cannot sell the apartment if Promoter has not registered within 90 days from the date of notification of Section 3 of the Act( rule 4(4) 2nd Proviso) Withdrawal of amounts deposited in the separate account on the basis of certificate issued by the engineer, architect and chartered accountant about the extent of project completed vis-à-vis the estimated cost of the project ( rule 5(1)(b)) In case of ongoing projects : If estimated cost of receivable is less than the estimated cost required for completing the project then he has to deposit 100 percent in separate account ( rule 5(1)(ii)) Land cost incurred and cost of construction has been defined in detail in explanations under the rule 5 Registration period includes the period where actual work could not be started due to specific orders from any court of law, Competent Authority, Tribunal etc or such circumstances as may be decided by the Authority(Rule 6(a)) Extension to the real estate project may be granted by Authority depending upon documents furnished, and on same charges as required for registration of the Project ( rule 7) Revocation of Projects cannot be made unless all the parties who have created third party interest are heard ( rule 8(2)) Transfer of Title : in case of Only one building in layout, then within two months from the date of occupation certificate, In multiple buildings within two months from the date of receipt of occupation certificate for last building in the layout.( rule 9(1)) Deemed conveyance under MOFA exists(9(3)) Conveyance in case of Statutory Bodies like MHADA, CIDCO, NIT etc would be as per the provisions of the respective acts related to them(9(4)) Fees for Registration of Real Estate Agents Rs, 10,000 for individual, Rs. 25 lakhs for companies registered under companies act and Rs, one lakh for other entities besides companies act ( rule11) Rate of interest payable for Promoter as well as Allottees is SBI Prime Lending Rate plus two percent Fees for filing a complaint with the Authority is Rs. 10000/- ( Rule 23(1) Fees for filing a complaint with Adjudicating Officer is Rs. 10000/- ( rule 24(1)) Forms for various purposes, application and certification Form ‘A’ to Form ‘M’ Annexure ‘A’ Agreements 1. Parking spaces can be sold by the Promoter at consideration (Point 1.a of the Agreement) 2. Earnest Money Deposit is 10 percent of purchase consideration and further amounts as per the stages of physical completion 3.Any breach of conditions of the Agreement be cause of termination of agreement by the Promoter and if allottee fails to rectify the breach, then Promoter is free to terminate the contract and return the amount received from allottee within 6 months adjusting all dues payable to him(clause 6.3 and 6.4) The salient features of The Maharashtra Real Estate Regulatory Authority, Officers and Employees (Appointment and Service Conditions) Rules, 2016 and The Maharashtra Real Estate Appellate Tribunal, Officers and Employees (Appointment and Service Conditions) Rules, 2016 Provision for more number of authorities and tribunals have been made in the definitions Selection Committee consists of Chief Justice of High Court as Chairman and Secretary to Law Department in the State Government as Member with Secretary of Housing Department as Member and Convenor of the Committee Selection Committee have been given freedom the follow any procedure for selecting Chairperson and Member in case of Authority and Members in case of Tribunal Selection committee to recommend the three names for each appointment to be made in order of preference and State to consider the same in order of preference and if not, then record the reasons thereof. Pay and other facilities of Chairman of Authority is made equivalent to the Chief Secretary and Members with Principal Secretary of the State Govt. Members of Tribunal is also given the salary and allowances equal to the Chief Secretary Residuary powers with State Govt The Salient Features of The Maharashtra Real Estate (Regulation and Development) (Recovery of Interest, Penalty, Compensation, Fine payable, Forms of complaints and Appeal, etc.) Rules, 2016 Recovery of interest or penalty would be recovered as arrears of land revenue as provided in Maharashtra Land Revenue Code ( Rule 3) Compounding of Offences under section 59, 64,66,68 of the Act has been varying from 2 percent to 10 percent of the project cost ( rule 5) Fees for filing appeal is Rs. 5000/-( Rule 9) -----------

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