70%
of unused amounts collected for ongoing projects to be kept in a separate bank
account
Promoters
to declare original sanctioned plans, changes made later, fresh timeline for
completion of ongoing projects
Registration
of projects with Regulatory Authorities incentivized by reducing fee
substantially
Interest
to be paid both by promoters and allottees is SBI
Marginal Cost Lending Rate plus 2%
Promoters
to make public a host of information and report quarterly progress to enable
informed decisions by buyers
Assurances
given by Shri M.Venkaiah
Naidu to Parliament acted upon in the Rules
Real estate developers will have to furnish additional information regarding
the ongoing projects for the benefit of the buyers besides depositing 70% of
the unused funds in a separate bank account to ensure their completion. This
has been stipulated in the Real Estate (Regulation and Development) (General)
Rules, 2016 notified today by the Ministry of Housing & Urban Population
and applicable to the five Union Territories without Legislature viz., Andaman
& Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep
and Chandigarh. These Rules were required to be notified on October
31, as stipulated in the Real Estate (Regulation & Development) Act, 2016
that was partly brought into effect on May 1st this year.
Some changes have been made in the Draft Rules placed in public domain three
months back, by incorporating some suggestions
received from consumer associations and real estate bodies.
Regarding ongoing
projects:
In respect of the ongoing projects that have not received completion
certificate in specified time, developers will
have to make public the original sanctioned plans with specifications and
changes made later, total amount collected from allottees,
money used, original timeline for completion and the time period within which
the developer undertakes to complete the project, duly certified by an
Engineer/Architect/practicing Chartered Accountant. Promoter shall also declare
size of the apartment based on carpet area even if it was earlier sold on any
other basis.
The developer, within three months of applying for registration of a project
with the Real Estate Regulatory Authority shall deposit in a separate bank
account , 70% of the amount collected and unused for ensuring completion of
ongoing projects.
Registration of
projects:
For registration of projects with the authorities, developers will be required
to submit authenticated copy of PAN Card, annual report comprising audited
profit and loss account, balance sheet, cash flow statement and auditors report of the promoter for the immediate three
preceding years, authenticated copy of legal title deed, copy of collaboration
agreement if the promoter is not the owner of the plot. Promoter also has to
declare information regarding the number of open and closed parking areas in
the project.
Promoter shall upload on the webpage of the project, within 15 days of expiry
of each quarter information regarding number and type of apartments or plots,
garages booked, status of the project with photographs floor-wise, status of
construction of internal infrastructure and common areas with photos, status of
approvals received and expected date of receipt, modifications in sanctioned
plans and specifications approved by the competent authority.
The requirement of disclosing Income Tax returns proposed earlier has been
withdrawn in the final Rules keeping in view the
confidentiality attached with them and as pointed out by legal experts and
promoters.
Registration fees:
To incentivize registration of projects and Real Estate Agents with Regulatory
Authorities, fee for the same has been reduced by half based on suggestions
from promoters for reduction of fee. For registration of projects, the
fee has been reduced to Rs.5 per sq.mt for up to 1,000 sq.mt area and Rs.10 per
sq.mt beyond this limit subject to a maximum of Rs.5.00 lakh
per project. For commercial and mixed development projects, it will be Rs.10
and Rs.15 per sq.mt subject to a maximum of Rs.7.00 lakh.
For commercial projects, it will be Rs.20 and Rs.25 subject to a cap of Rs.10 lakh per project. For plotted development, it is Rs.5 per
sq.mt with a ceiling of Rs.2.00 lakhs.
A cap has been placed on the total amount of registration fee based on the
suggestion of real estate bodies.
Fee for renewing registration of projects with the Regulatory Authorities would
be half of the registration fees.
For registration of Real Estate Agents, fee now prescribed is Rs.10,000 for individuals and Rs.50,000 for other entities as
against Rs.25,000 and Rs.2,50,000 proposed in the Draft
Rules.
Similarly, fee for renewal of registration of projects and agents has also been
reduced to Rs.5,000 and Rs.25,000 respectively.
Interest to be paid in
case of delay;
Developers will be required to refund or pay compensation to the allottees with an Interest Rate of SBI’s highest Marginal
Cost of Lending Rate plus 2%.
Further to an assurance given by the Minister of Housing & Urban Poverty
Alleviation to the Parliament during passage of the Real Estate Act, Rules
stipulate such payment to the allottee be made within
45 days of it becoming due. This interest applies to payments due to the
developers by the allottee which is to be paid within
the period to be specified in the Agreement of Sale.
Fee for appeals and
complaints:
For
every appeal to be made to the Real Estate Appellate Tribunal, fee proposed is
Rs.5,000. For every complaint to be made to Regulatory
Authorities and Adjudicating Officers, fee proposed is Rs.1,000.
Compounding of
punishment:
Rules provide for compounding of punishment with imprisonment for violation of
the orders of Real Estate Appellate Tribunal against payment of 10% of project
cost in case of developers and 10% of the cost of property purchased in case of
allottees and agents. Compliance with reasons for
punishment shall be complied within 30 days of compounding.
In pursuance of the assurance given by Shri M.Venkaiah Naidu, Real Estate Rules prohibit any
discrimination in sale of properties on any ground.
Under the Rules, Adjudicating Officers, Real Estate Authorities and Appellate
Tribunals shall dispose of complaints within 60 days.
To enable informed decisions by buyers, Real Estate Regulatory Authorities
shall ensure publication on their websites information relating to
profile and track record of promoters, details of litigations, advertisement
and prospectus issued about the project, details of apartments, plots and
garages, registered agents and consultants, development plan, financial details
of the promoters, status of approvals and projects etc.
Ministry of Urban Development is working on similar Rules which would be
applicable for real estate sector in the National Capital Region of Delhi while
the State Governments and other UTs with Legislatures are required to notify
Rules for application in respective domains.
As per the Act, the Real Estate Rules were required to be notified by all the
concerned by October 31,2016. In view of the delay in
this regard, the Ministry of HUPA has sought time from the Committee on
Subordinate Legislature of Rajya Sabha
for notifying the Rules.
With notification of Real Estate Rules by the Ministry of Housing & Urban
Poverty Alleviation, States and UTs are expected to do so soon. As per the
provisions of the Real Estate (Regulation and Development) Act, 2016, Real
Estate Regulatory Authorities are required to be put in place by April 30, 2017
before full Act is brought into effect, the next day.
AAR/KM
October 31, 2016