THE REAL ESTATE (REGULATION & DEVELOPMENT) ACT, 2016 RAJKOT BRANCH OF WIRC OF ICAI By CA. D. K. Patel 7 th May, 2016

WHAT DOES THE ACT AIMS FOR:  To protect the rights and interests of consumers  To promote uniformity and standardization of business practices and transactions in the real estate sector  To attempt balancing interests of consumers and promoters by imposing certain responsibilities on both. Contd... The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

 To establish symmetry of information between the promoter and purchaser  To promote transparency of contractual conditions between both the parties  To set minimum standards of accountability  To establish a fast-track dispute resolution mechanism The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Chap -ter HeadingSectionsNotified w.e.f. 1st May, 2016 IPreliminary1 & 22 IIRegistration of Real Estate project and registration of Real Estate Agents 3 to 10 IIIFunctions and duties of Promoter11 to 18 IVRights and duties of Allottees19 VThe Real Estate Regulatory Authority20 to 4020 to 39 VICentral Advisory Council41 & to 58 VIIThe Real Estate Appellate Tribunal43 to 58 VIIIOffences, Penalties and Adjudication59 to 7271 & 72 IXFinance, Accounts, Audits and Reports73 to 78 XMiscellaneous79 to 9281 to 92 The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Advertisement in any medium/ form  Informing persons about a Real Estate Project  Offering plot, building, apartment for Sale  Inviting persons to purchase the above & mode of payment thereof. The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Apartment  Called by any name- Tenement, Flat, Block, Dwelling unit, Show room, Office, Chamber, Godown, Premises, Suit, unit or any other name.  Separate and self- contained part of any immovable property  Located on one or more floors or any part thereof in a building or on a plot of land  Used or intended to be used for any residential or commercial use. The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Building  Any structure, erection or part of a structure intended to be used for residential, commercial or for business, occupation, profession, trade or for related purposes. Carpet Area  The Net usable floor area of an apartment excluding external walls, exclusive balcony/open terrace area  Includes Internal partition walls in the apartment The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Real Estate Project  Development of a building consisting of apartments  Conversion of Existing building into apartments  Development of land into plots or apartments  For the purpose of Sale  Project includes common areas, improvements & structures thereon, easement, rights etc thereto The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Sanctioned plan  The site plan, Building plan, Service plan, Parking and circulation plan, Landscape plan, Layout plan, Zoning plan, Structural designs.  Environmental & other applicable permissions The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Promoters to Register every project except  Land area of the project is 500 sq. mtrs or less.  No. of apartments in the project not exceeding 8  Received completion certificate prior to commencement of this Act  Project is for renovation, repair or re- development for existing occupants only. The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Registration at what point?  Before advertisement  Before invitation to persons to purchase (launch of project ) Registration of ongoing projects:  On the date of commencement of this Act  Completion certificate has not been issued  Application for registration within 3 months from the date of commencement of this Act. The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Documents to be enclosed with application The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel  Details – Name, address, type (proprietary, partnership, company…), registration details  Promoters’ details – Name, address, photos  Details of Projects launched in last 5 years including current status thereof – delay in completion, cases pending, payments pending  Approved Sanctioned plan, commencement certificate, layout plan & location of plan  Plan of common area development work  Proposed facilities to provided

 Proforma of the allotment letter, agreement for sale, and the conveyance deed  Number, type and Carpet area of apartment offered  Details of Contractors, Architect, Structural Engineer of the project  Declaration supported by affidavit stating : i) Ownership & legal title, encumbrances on the land Ii) Time period within which promoter undertake to complete the project iii) 70% of booking realization to be kept in a separate bank account with a scheduled bank to cover the cost of project The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

 On getting registration Create Webpage on website of the authority under this act and upload details of project  Status to be updated every quarter on the website – progress, new bookings, any new development in the project  Not to advertise, book, sale or offer for sale prior to Registration  To issue allotment letter on booking, avail sanctioned plan, specifications to the allottees  To inform about stage wise time schedule of completion including civic infrastructure – water, sanitation & electricity  70% of amount realized to be kept in separate bank A/c  To execute registered conveyance deed in favour of allottee The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

 To obtain Completion, Occupancy & Lease certificate and make it available for allottees.  Maintain essential services till taking over of maintenance by the AOP  Enable formation of AOP for building maintenance  Not to mortgage or create a charge on apartment after executing an agreement of sale  Not to cancel allotment except as per terms of Satakhat  Agreement for sale must be in standard form  Adherence to sanctioned plan and specifications  Liability to rectify structural defect within 30 days if brought to notice by allottee within 5 years  Liability to compensate allottee for failure to discharge obligations as advertised/informed The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Advertisement must include Website address of authority Project Registration Number Such other matter incidental thereto. The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Not to accept advance exceeding 10% without entering into registered Satakhat Deposit 70% of amount realized from allottees in a separate bank A/c with a Scheduled bank The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

 Promoter shall withdraw amount from earmarked bank a/c to cover the project cost in proportion to stage of completion  Withdrawal permitted after % of completion certified by an Engineer, an Architect and a Chartered Accountant  Accounts to be audited within 6 months after the end of financial year by the CA  Auditor to certify that amounts collected have been utilized in the project and withdrawal from bank is in proportion to the % of completion The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

 Proposed project shall be developed and completed as per sanctioned plan  If any alteration or addition to be made, then written consent of at-least 2/3rd of allottees is required.  In case of any structural defect, defect in workmanship or quality if brought to the notice of the promoter within 5 years, it should be rectified without further charges within 30 days else to be compensated. The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

 Promoter shall not transfer his majority stake without prior written consent from 2/3rd allottees except promoter  Written approval of regulatory authority necessary  Such transfer shall not affect the sanctioned plan  On the transfer being permitted by the allottees, intending promoter shall comply with provisions of this Act independently. The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Promoter shall obtain insurance including but not limited to: Promoter shall pay premium and charges before transferring it to association Title of land and building Construction of project The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

If the promoter fails to complete or is unable to give possession, In accordance with the terms, or by the specified date,  Due to discontinuance of his business  If the allottees wishes to withdraw from project, to return the amount received by him with interest.  If the allottees does not intend to withdraw, interest for every month of delay to be paid. The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Rights Right to information & documents Sanctioned plans, documents of insurance Right to obtain certificates C ompletion, occupancy & Lease Right to claim compensation Breach of agreement & defective title Right to withdraw from project Alterations, trf. To 3rd party or registration revoked Right to execution of registered Satakhat If more than 10% advance demanded The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

 Before booking, verify builder’s registration  Not to buy apartment in unregistered projects  Not to pay more than 10% of cost before agreement and payment should be made by banking channels only.  To make necessary payments as per Satakhat & interest for delay thereon  To participate in formation of association  To participate in registration of conveyance deed  To take physical possession within a period of 2 months of receiving occupancy certificate The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Appropriate government shall appoint authority within 1 year from commencement of this Act. Function Registration & regulation of real estate projects Protection of interest of allottees, promoters, RE Agents Creation of transparent and robust grievance redressal Encourage investments, constructions in Real Estate Sector Function To register and regulate projects To publish & maintain database on website To ensure compliance with rules & regulations Powers Impose penalty or interest if any provisions are contravened If it found suspicious, can call for information & can investigate Can restrain any promoter, allottee or agent if found necessary The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Ministry of the Central Government dealing with Housing shall be the ex officio Chairperson of the Central advisory Council. Formation of Central Advisory Council 5 Representative s of State Government Representati ves of various Ministries 5 representativ es of the Real Estate Regulatory Authorities, not more than 10 members representing interests of real estate industries The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

 Every bench of the Appellate Tribunal shall consist of at least 1 judicial & 1 Admin to technical Member.  Aggrieved person can file appeal within 60 days from receipt of direction, order or decision made by RA.  Endeavour shall be made by the tribunal to dispose of the appeal within 60 days.  Appellant may either appear in person or can authorize CA, CS, Cost Accountant or Advocate. The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Non registration of the project Penalty upto 10% of estimated cost of project Does not comply with orders of RA Imprisonment upto 3 years or fine upto 10% of estimated cost or both Provision of false information Penalty upto 5% of estimated cost ofproject The Real Estate (Regulation & Development) Act, 2016 by CA D. K. Patel

Within 6 months, by , the appropriate government (State Govt) will make rules and regulations regarding: FForms & manner of application and its enclosures PPeriod & condition of registration MMaintenance & preservation of Books of Accounts RRate of interest for delays/defaults FForm & particulars of agreement for sale DDetails to be published in website AAny other matter it may deem fit.