Rera act 2016 ppt

Real Estate (Regulation And
Development )Act, 2016.
Manoj Pandit
Advocate
(c) M & P Management Consultants Pvt. Ltd.
1

RERA ACT, 2016
Present Discussion - RERA Act, 2016
 Liabilities, Penalties, Prosecution & Appeals.
 Opportunities for Chartered Accountants.
 Current Practices v/s Proposed Practices.
 Registration of Real Estate Agents / Brokers.
2

RERA ACT, 2016
Present Discussion - RERA Act, 2016
 Liabilities, Penalties, Prosecution & Appeals.
 The RERA Act, 2016 lays downs obligations on Promoters, Allottees and Real
Estate Agents and also provides for consequences for defaults by way of
penalty, fine and imprisonment for contravening those provisions by them.
 Chapter VIII of the act containing Sections from 59 to 70 deals with such
provisions.
3

Penalties under RERA Act, 2016
4
Penalty for a promoter
OFFENCE PENALTY
Contravention of the provisions
of Section 3 i.e.., making any
invitation for sale without getting
the project registered with RERA
(Section 59)
Penalty up to 10% of estimated
cost of the project.
For the continued default
imprisonment up to three years
or with further fine up to 10% of
the cost , or with both
Contravention of Section 4 i.e..,
failure to make application for
registration, submitting false
information, failure to keep 70%
in separate bank account etc.
(Section 60)
Penalty up to 5% of the
estimated project cost

5
OFFENCE PENALTY
Contravention of any other
provision of the
Act/Rules/Regulations
(Section 61)
Penalty up to 5% of the estimated
project cost
Failure to comply with the
directions/orders of the
Regulatory Authority
(Section 63)
Penalty for every day of the
default which can cumulatively
go up to 5% of the estimated
project cost
Failure to comply with the orders,
decisions of the Appellate
Tribunal(Section 64)
Imprisonment up to three years
or with fine for every day of
default which can cumulatively
go up to 10% of the estimated
cost of the project, or with both.

6
Penalty for an agent
OFFENCE PENALTY
Failure to comply with order or
direction of the Authority
(Section 65)
Penalty for every day of default
which can cumulatively go up to
5% of the estimated cost of the
building/ apartment or plot
Failure to comply with order or
direction of the Tribunal
(Section 66)
Punishment with imprisonment up
to one year or with fine for each
day of default which can
cumulatively go up to 10% of the
cost of the building/ apartment or
plot, or with both

7
Penalty for Allottees
OFFENCE PENALTY
Failure to comply with orders of
the Authority
(Section 67)
Penalty per day of the default
which can cumulatively go up to
5% of the cost of building/plot or
apartment
Failure to comply with decision or
orders of the Tribunal
(Section 68)
Punishment of imprisonment up to
one year or with fine for each day
of default cumulatively going up
to 10% of the cost of building/
apartment or plot, or with both.

APPEALS
8
 The Act stipulates that questions that come before the RERA must be
dealt with “as expeditiously as possible” and must be disposed within
60 (sixty) days from the date of receipt of the concerned application
(with reasons to be recorded in writing, if disposal does not occur
within the said period). Appeals from the directions of the RERA lie to
the Appellate Tribunal and such appeals must also be dealt with
expeditiously, though it is sufficient if the Tribunal “endeavors” to
dispose of the appeal within 60 (sixty) days of the date of receipt of
the appeal.

APPEALS
9
Aggrieved
party
Authority or
adjudicating
officer
Direction
Order
RE
Appellate
tribunal
Within
60 days
from the
copy of
order/D
High Court
Required to adjudicate cases
within 60 days from date of
receipt of application & if not
possible record reasons
Within 60
days from
the copy of
order/D
In respect of matters pending
before Consumer Courts, the
appellants have the option to
withdraw such complaint and file
an application before the
adjudicating officer
Pre Deposit at REAT Level:
For promoters
30% of penalty or 100% of interest
& compensation to the allottees

APPEALS
10
 Appeals to be heard by Real Estate Appellate Tribunal
 Any person aggrieved by any direction or decision or order made by the
Authority or by an adjudicating officer under this Act may prefer an appeal
before the Appellate Tribunal within a period of sixty days from the date of
the order. The Appellate Tribunal may entertain any appeal after the expiry of
sixty days if it is satisfied that there was sufficient cause for not filling it within
that period.
 While filing the appeal, the promoter has an obligation to deposit at least
thirty per cent of the penalty, or such higher percentage as may be
determined by the Appellate Tribunal, or the total amount to be paid to the
allottee, including interest and compensation imposed on him, if any, or with
both, before the said appeal is heard.

APPEALS
11
 The Appellate Tribunal shall not be bound by the procedure laid down by the
Code of Civil Procedure, 1908 but shall be guided by the principles of natural
justice.
 The Appellate Tribunal shall also not be bound by the rules of evidence
contained in the Indian Evidence Act, 1872.
 Every order made by the Appellate Tribunal under this Act shall be executable
by the Appellate Tribunal as a decree of civil court, and for this purpose, the
Appellate Tribunal shall have all the powers of a civil court.

APPEALS
12
 APPEAL TO HIGH COURT
 Any person aggrieved by any decision or order of the Appellate
Tribunal, may, file an appeal to the High Court, within a period of
sixty days from the date of communication of the decision or
order of the Appellate Tribunal, to him, on any one or more of
the grounds specified in section 100 of the Code of Civil
Procedure, 1908.

Respontunity for CA under RERA
13
 It shall be the responsibility of the Chartered Accountant to provide
Certificates/Letters/NOC’s as required from time to time during various stages of
construction of the project and shall be given to the promoter without any delay
and/or within 7 days on request of the promoter.
 The Chartered Accountant shall give various Certificates/Letters as per prescribed
forms under RERA act, rules and regulations there under or as per any other Law
for time being in force.
 The Chartered Accountant shall make himself aware of the RERA act, rules and
regulations and shall perform all his duties prescribed under the said act, rules
and regulations within the time period stipulated.
 The Chartered Accountant shall furnish and submit all Certificates, Audit reports
and any other papers as required to be submitted by the Real Estate Regulatory
Authority.

14
Key Role of
CA in RERA
Registration of
RE projects
with RERA
Pre-
withdrawal
Certification
Based on PoC
Representation
Services
before AT or
RERA authority
Accounts
Audited

15
 Amounts from the separate account maintained for deposit of amounts
received from allottees shall be withdrawn by the promoter after it is certified
by an engineer , an architect and chartered accountant in practice that the
withdrawal is in proportion to the percentage of completion of the project.
 The promoter shall get his accounts audited within six months after the end
of every financial year by a chartered accountant in practice, and shall
produce a statement of accounts duly certified and signed by such CA. During
the audit it shall be verified that the amounts collected for a particular
project have been utilized for the project and the withdrawal has been in
compliance with the proportion to the percentage of completion of the
project.

Opportunities for CA Under RERA
16
 Chartered Accountants can be appointed as legal representative before the
Appellate Tribunal or the Regulatory Authority.
 Can be appointed as member of Central Advisory Council, Chairperson or
member of RERA, Technical Member of Real Estate Appellate Tribunal

Opportunities for CA Under RERA
17
 Secondary role of a CA
 Application for Registration of real estate project ---
Application shall be made in prescribed form with the prescribed fee and
shall include details of promoters, projects launched in past five years,
approval letters/certificates to commence project, lay out plan, allotment
letter, agreement for sale proforma, garage , declaration to legal title etc.
 Registration of real estate agents --- No real estate agent shall be able to
facilitate the sale or purchase in a real estate project registered without
obtaining registration under new Act. The registration shall be given by the
Authority for the entire State/ Union Territory.

Current Practice(MOFA) Vs Proposed
New Practice (RERA)
18
SN Salient Issues Provision in MOFA, 1963 Provision in RERA, 2016
1 Sale of parking Not permissible Only covered car parking
space / Garages including
mechanical car parks
2 Carpet area Balcony included and net
usable area was permissible
Includes:- Area covered by
the internal walls of the
apartment
Excludes:- Area covered by
the external walls, exclusive
balconies, verandah areas,
service shafts and terraces
not included. 3% tolerance
allowed. Compulsory re-
measurement of flat at the
time of possession

New Practice (RERA)
19
3 Before execution of
agreement
Not to exceed 20% Not to exceed 10%
4 Proportionate
charging of common
areas
Chargeable Chargeable
5 Deemed
conveyance
Applicable within Six
months of notice.
Applicable within three
months of completion
certificate of real estate
project if date has not been
specified in the agreement to
sale
6 Defects period 3 years 5 years

New Practice (RERA)
20
7 Refund of money only
if delay for possession
then refund of money
with interest to the
buyer
Simple interest @ 9% p.a.
from the date Sums are
received.
Simple interest @ 2% +
prevailing MCLR rate of the
State Bank of India from the
date sums are received.
8 Formation of society As soon as minimum
number of persons (60%)
require to take flats.
Within 4 months of 60%
occupation.
Within 3 months of date of
51% of allotees that have
booked their apartments

New Practice (RERA)
21
9 Conveyance If no period mention within
4 months of formation of
society.
If no period mentioned then for
single building within 3 months
of issue of occupation
certificate or 51% of total
number of allotees in the
building / wing having paid full
consideration whichever is
earlier. In case an apex body
has to be formed if no date is
agreed upon the 3 months from
the completion of the last Bldg.

New Practice (RERA)
22
SN Salient Issues Provision in MOFA,
1963
Provision in RERA, 2016
10 Extension of
time for delivery
of flat
i. Non availability of
steel, cement, other
building, water or
electric supply.
ii. War, civil commotion
or act of God.
iii. Any notice, order,
rule, notification, of
the government
and/or other public
or competent
authority.
i. War, civil commotion or
act of God.
ii. Any notice, order, rule,
notification, of the
government and/or
other public or
competent authority.
iii. Excludes period of
registration where actual
construction not carried
by promoter due to
specific stay, injunction
order to the project by

New Practice (RERA)
23
Note-the provisions of this
proviso are not mandatory
but negotiable.
any court of law, tribunal,
competent authority, statutory
authority, high power
committee etc. or due to other
mitigating circumstances as
decided by the RERA authority.
iv. If authority is convinced
that due to no fault of the
promoter there has been a
delay he can get extension for
the registration of the project

New Practice (RERA)
24
11 Payment terms Very stringent/Not practical
therefore no developers
used to follow.
Liberal and practical for
promoter and allotees
12 Escalation Increase in local taxes,
water charges, insurance
and such other levies, if
any, imposed local
authority/govt.
Escalation free except duty
increase in account of
development charges/ charges
to authority.
13 Share of outgoings In proportion to floor area
of flat
Proportion to carpet area.

New Practice (RERA)
25
14 All receipts Mentions maintain a
separate account.
70% to be maintained with
designated account and to be
withdrawn as per progress of
construction.
15 Project potential Till conveyance/ society
formation any FSI increase
would belong to developer
Disclosure to be made about
expectation of FSI proposed to
be utilized including
expectation of future FSI or
else consent of 2/3 rd allottees
required
16 Interest Developer’s discretion M.C.L.R. plus 2% of SBI Bank
Rate.

New Practice (RERA)
26
17 Termination Developer was entitled to
terminate after notice on
default of payment
Promoter entitled to terminate
after 3 installments not paid
and notices given. Refund must
be made within 30 days.
18 Specification of
materials
Generic declaration would
suffice
To mention brand, or price of
product (if unbranded).
19 Registration of
project
Not required Compulsory before any
advertisement or receipt of
payment

New Practice (RERA)
27
20 Insurance Of building Of building and title
21 Disclosure To be available on site On the site and website
22 Title Liability Up to conveyance is done Liability in perpetuity
23 Offences &
Penalties
Imprisonment and nominal
files were prescribed
Heavy fine linked with up to
10% of estimated project cost
and imprisonment only if
directions of authority not
followed for both developers as
well as allottees.

New Practice (RERA)
28
24 Consent to change
sanctioned plans
Consent not required
unless individual unit is
affected.
Consent of 2/3 allotees
required for making any major
modification in sanctioned
plans or revised plans.
25 Development of
project and
amenities
Phase wise development
not mentioned
Detailed phase wise
development permitted along
with different date of
possessions for apartment and
amenities

New Practice (RERA)
29
26 Unfinished project No provision of take over Authority with approval of
state government may allow
development of project by any
other person including first
right to take over and complete
the project will rest with
allottees who has purchased
apartment in the said project.
27 Marketing Agents Not required to be
registered
Registration is mandatory with
RERA authority.

Definition of Real Estate Brokers
/ Agents as per the new law
30
 “Real Estate Agent” means any person, who negotiates or acts on behalf of
one person in a transaction of transfer of his plot, apartment or building, as
the case may be, in a real estate project, by way of sale, with another
person or transfer of plot, apartment or building, as the case may be, of any
other person to him and receives remuneration or fees or any other charges
for his services whether as commission or otherwise and includes a person
who introduces, through any medium, prospective buyers and sellers to
each other for negotiation for sale or purchase of plot, apartment or
building, as the case may be, and includes property dealers, brokers,
middlemen by whatever name called.

Registration of real estate agents
31
Make
Application
for
Registration
Acceptance on
fulfillment of all
condition , within such
period
Reject if does not
confirm to the
provisions of the Act
Deemed to be
Registered if within
the specified period no
communication of
acceptance or
rejection received
Grant a Single
Registration for
entire State of
Union territory
Opportunity of
being heard
has to be given

32
Section 9
(1) All real estate agent shall not facilitate the sale or purchase of or act on
behalf of any person to facilitate the sale or purchase of any plot, apartment or
building, as the case may be, in a real estate project or part of it, being the part
of the real estate project registered under section 3, being sold by the
promoter in any planning area, without obtaining registration under this
section.
(2) Every real estate agent shall make an application to the Authority for
registration in such form, manner, within such time and accompanied by such
fee and documents as may be prescribed.

33
(3) The Authority shall, within such period, in such manner and upon satisfying
itself of the fulfilment of such conditions, as may be prescribed—
(a) grant a single registration to the real estate agent for the entire State of
Union territory, as the case may be;
(b) reject the application for reasons to be recorded in writing, if such
application does not conform to the provisions of the Act or the rules or
regulations made there under:
Provided that no application shall be rejected unless the applicant has been
given an opportunity of being heard in the matter.

34
(4) Whereon the completion of the period specified under sub-section (3), if the
applicant does not receive any communication about the deficiencies in his
application or the rejection of his application, he shall be deemed to have
been registered.
(5) Every real estate agent who is registered as per the provisions of this Act or
the rules and regulations made there under, shall be granted a registration
number by the Authority, which shall be quoted by the real estate agent in
every sale facilitated by him under this Act.
(6) Every registration shall be valid for such period as may be prescribed, and
shall be renewable for a period in such manner and on payment of such fee
as may be prescribed.

35
Real Estate
Agent
Registered
Breach of any of the terms and conditions
specified and any rules or regulations.
Authority is satisfied that such registration
has been secured by the real estate agent
through misrepresentation or fraud
Revoke
Suspend
Opportunity
of being heard
has to be
given

36
(7) Where any real estate agent who has been granted registration under this
Act commits breach of any of the conditions thereof or any other terms and
conditions specified under this Act or any rules or regulations made there
under, or where the Authority is satisfied that such registration has been
secured by the real estate agent through misrepresentation or fraud, the
Authority may, without prejudice to any other provisions under this Act,
revoke the registration or suspend the same for such period as it thinks fit:
Provided that no such revocation or suspension shall be made by the Authority
unless an opportunity of being heard has been given to the real estate agent.

37
Real estate
agent
(applicant)
Individual –
Rs 10,000
Others –Rs 1,00,000
Fees
Name of Enterprise
Registered Address
(Place of business)
Type of Enterprise
Registration No (PAN
Aadhar, Din No etc)
Particulars of
Registration under any
other law
Authenticated Copies of
partnership deeds, AOA,
MOA.
Recent Colour Photographs of Real Estate Agent
Individual, All partners , All Directors as applicable
IT Returns of last 3 FYS
Declaration of Income of
last 3 FY’s if the applicant
was exempted from filing
returns
In writing prior to
engaging in any
activity
Application
Details of all civil and
criminal cases pending
Authenticated copies of
proof of address, branches
along with telephone, fax &
email id.

38
1) Every real estate agent required to be registered as per sub section (2) of
section 9 shall make an application in writing,- in case of registered real
estate projects forthwith and in any case prior to engaging in any activity
relating to marketing, advertising sale or purchase of any apartments.
2) The following documents shall also be submitted along with the application
namely:-
a) Brief details of his enterprise including its name, registered address of place
of business, type of enterprise (proprietorship firm, societies, partnership,
company etc.); Registration numbers, PAN , Aadhar Card No, DIN, as the case
may be, under which returns are required to be filled with statutory
authority;

39
b) Particulars of registration obtained under other laws, and rules and
regulations, as the case may be, along with the authenticated copy of
partnership deeds, memorandum of association, articles of association, etc;
c) Recent colour photographs of the real estate agent, if an individual and of all
the partners, directors, trustees, etc. Including persons in service or assigned
work expected on a real estate agent, in case of other entities;
d) Income tax returns for last 3 financial years preceding the application or in
case the applicant was exempted from filing returns in any of the 3 years
preceding the application, a declaration to such effect;

40
e) Authenticated copy of the proof of address of the principal place of business,
number of branch offices if any along with contact details including
telephone number, fax number and email address; and
f) Details (if any) of a real estate projects and their promotes on whose behalf
he has acted as real estate agent 5 years;
g) Details of all civil and criminal cases pending against him if an individual or
any of the partners, directors, trustees etc. In case of other entities;
h) Authenticated copies of all letter heads; rubber stamp images,
acknowledgement receipt proposed to be used by the real estate agent;
i) Such other information and documents, as may be specified by regulations.

41
3) (i) A sum of rupees ten thousand, in case of applicant being an individual;
and
(ii) rupees one lakh, in case of the applicant being other than an individual.
4) The fees for registration of real estate project shall be paid through NEFT or
RTGS system or any other digital transaction mode.
5) The real estate agent up on being engaged by the promoter under clause (f)
of sub-section (2) of section 4 for a real estate project shall maintain and
preserve books of accounts, records and documents separately for each such
real estate project.

Duties real estate agents
42
Every RE agent is required to be registered wit h RERA for Facilitating sale,
purchase of any RE project
RE Agent shall not facilitate purchase or sale of RE project not registered with
RERA
Maintain and presence books of accounts, records and documents as
may be prescribed
Not involve in any unfair trade practices
Facilitate the possession of all information and documents
to the allottees

Thank you
43
MANOJ PANDIT
Advocate
M & P Management Consultants Pvt. Ltd.
A-305, Durian Estate,
Goregaon Mulund Link Road,
Goregaon East, Mumbai – 400063
Mail: adv.manojpandit@gmail.com
Cell: 9820491848

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