Can the RERA authorities prosecute unregistered projects?

The primary goal of the Real Estate (Regulation and Development) Act of 2016 (RERA) is to avoid builder-buyer conflicts, restore purchasers’ faith in the market, and encourage real estate transactions throughout the country.

To fulfil on its promises, RERA requires that all existing projects lacking Completion Certificates (CC) as of the Act’s inception date be registered with the corresponding State RERA within three months. Within 30 days, the regulatory authority can approve or reject the application. Furthermore, registration is required only for projects greater than 500 square metres or including eight flats. The Act specifically excludes from registration projects less than 500 square metres and including fewer than eight units. Nonetheless, these projects are not exempt from the Act’s other obligations. For example, all real estate developments, whether registered or not, are subject to land title defect liability.

Liability for structural and land title defects in non-RERA projects

According to Rakesh Reddy, Director of Aparna Constructions, homeowners can pursue RERA about problems in completed apartments even if the project is not registered. RERA states unequivocally that the developer is liable for workmanship and structural problems in a project for up to five years. According to Clause 14 (3) of the Real Estate Act, a builder is required to repair or replace any problems brought to his attention by a homebuyer within five years of the date of possession, without charging the homeowner any additional fees.  The problem must be resolved within 30 days after being brought to the developer’s attention. However, if the builder fails to correct the fault or does not comply, the homebuyer has the right to compensation under the Act. Previously, the majority of developers had just two years to remedy the problems in the supplied products, which was not the case.

Projects that applied for OC but were denied certification

Projects that sought for an Occupancy Certificate (OC) prior to the enactment of RERA but were denied the certificate are likewise covered by the Act. The simple submission of an occupancy or completion application does not exclude the project from RERA. Only projects that were awarded a certificate before to the Act’s implementation on May 1, 2017, are immune from RERA. According to Reddy, the regulation broadens the reach of RERA to multiple projects throughout states where builders previously dodged the RERA registration procedure since they ‘applied’ for OC. 

For example, UP RERA has identified 200 projects in the Delhi NCR where builders deceived the administration and avoided RERA registration by asking for OC.

Projects that are perpetually delayed

In the event of continuously delayed projects that are not registered under RERA, the customer may make a complaint with the authority or settling disputes officer designated by the legislation in accordance with Section 31 of RERA. A homebuyer may also register a complaint against the real estate agent in the manner and form prescribed by the Act. Homebuyers can contact not just the RERA authority in the state, but also other legal agencies. For example, under Section 2(1)(c) of the Consumer Protection Act of 1986, a homebuyer can file a complaint for a failure in services. 

The word “deficiency in services” refers to any flaw, defect, shortcoming, or insufficiency in the quality, character, and method of performance that is required by law.

Prior to RERA, the real estate process was fragmented and uncontrolled, making house buying a frightening experience. However, the introduction of RERA in each state has offered enormous relief to homebuyers. The Act has weeded out dishonest market participants, leaving only trustworthy and genuine market participants.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.

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