No discrimination in allocation rule made fulfilling Minister’s assurance to Parliament

Project registration fee from Rs.10 and Rs.20 per sq.mt for residential and Rs.50 and Rs.100 per sq.mt for commercial projects

Interest to be paid by promoters and allottee for delays- SBI Prime Lending Rate plus 2%

Promoters to submit information on 60 aspects about themselves and projects

            Minister of Housing & Urban Poverty Alleviation has formulated Draft Real Estate Rules within two months of some sections of the Real Estate (Development and Regulation) Act,2016 coming into force on first of May this year. With the approval of the Minister of HUPA Shri M.Venkaiah Naidu, the draft rules were hosted on the Ministry’s website (www.mhupa.gov.in) seeking suggestions and objections from the public within two weeks.

            If fulfillment of its responsibility towards five Union Territories without legislatures, the Ministry of HUPA has come out with the ‘Union Territories of Chandigarh, Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep’ Real Estate (Regulation and Development) Rules, 2016.

            The Rules provide for payments to be made for registration of projects and real estate agents with the Regulatory Authority, documents and information to be furnished by developers, procedures to be followed for registration,  extension and  renewal of registration, procedures for filing and hearing of complaints and appeals, appointment and service conditions of the Chairpersons and Members of Real Estate Regulatory Authorities and Appellate Tribunals and their powers etc.

            Under the Rules, promoters can’t discriminate against anyone in the allotment of any apartment, plot or building on any ground. This has been incorporated further to the assurance of Shri Venakaiah Naidu during the debate on the Real Estate Bill in the Parliament.

            Rules require the Real Estate Regulatory Authority to be set up in States/UTs to ensure availability of information in respect of 60 aspects relating to the promoters and the projects. These relate to the profile of developer of group, track record of promoter, details of past or ongoing litigations relating to real estate projects, apartment and garage related details, location, details of registered agents and consultants, development plan, financials of the promoter, status of project along with that of approvals, contact details , copies of legal title deed, details of encumbrances etc.

            The promoter will be required to upload updates on the webpage of the project, within seven days from the expiry of each quarter, regarding number and types of apartments or plots booked, garages booked, status of construction of each floor with photographs, status of approvals, modifications if any issued by the competent authority with regard to any license, permit or approval for the project.

            Fee proposed for registration of projects with the Regulatory Authority is Rs.10 per sq.mt if the plot area is below 1,000 sq.mt and Rs.20 if the area for development is more than that for residential projects and Rs.50 and  Rs.100 per sq.mt for commercial projects.

            Upon the notification of sub-section (1) of section 3, promoters of all ongoing projects which have not received completion certificates shall apply for registration of projects within three months and disclose all relevant information including the size of the apartment based on carpet area.

            Functions prescribed for real estate agents include assisting the allottee and promoter to exercise their respective rights and fulfill their respective obligations at the time of booking and sale of any plot, apartment or building.

            Draft Real Estate Rules also provide for payment of 10% of the estimated cost of the project for compounding of imprisonment of promoter for non-registration of the project or violation of the order of the Real Estate Appellate Tribunal. Imprisonment of real estate agent and buyer for violating Tribunal’s Order can be compounded upon payment of 10% of the estimated cost of the plot, apartment or building. However, the reasons for imprisonment shall be complied with in one month.

            For any delay in payment by the promoter and buyer has been proposed to be the State Bank of India Prime Lending Rate plus 2%.

            Selection Committee headed by the Chief Justice of respective State/UT or his nominee with Housing and Law Secretaries as members will recommend names for appointment as Chairperson and Members of Real Estate Regulatory Authorities and Appellate Tribunals.

            After eliciting public comments/suggestions over the next two weeks, the draft rules will be discussed with officials of the five Union Territories and further to revision if required, the rules will be sent for legal vetting. Thereafter, the rules will be notified.

AAR

June 24, 2016