TMI BlogREGISTRATION OF REAL ESTATE PROJECTS UNDER THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016X X X X Extracts X X X X X X X X Extracts X X X X ..... REGISTRATION OF REAL ESTATE PROJECTS UNDER THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016 - By: - Mr. M. GOVINDARAJAN - Other Topics - Dated:- 25-7-2016 - - Chapter II of the Real Estate (Regulation and Development) Act, 2016 provides for the procedure of registration of real estate projects and real estate agents. The provisions of this Chapter has not yet been notified even though the Act came into effect from 01.05.2016 and some of the provisions were notified as to their effect from 01.05.2016. Real Estate Project Section 2(zn) defines the phrase real estate project as the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopment of land into plots or apartment, as the case may be, for the purpose of selling all or some of the said apartments or plots or building, as the case may be, and includes the common areas, the development works, all improvements and structures thereon, and all easement, rights and appurtenances belonging thereto. Where the real estate project is to be developed in phases, every such phase shall be considered a standalone real estate project and the promoter shall obtain registration for each phase separately. Registration requirement Section 3(1) provides that any promoter cannot sell or offer for sale or invite person to purchase any plot, apartment etc., without registering the real estate project with the Real Estate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulatory Authority established under this Act. Ongoing projects as on 01.05.2016 and for which the completion certificate has not been issued, the promoter shall require registering within a period of three months from 01.05.2016. Non applicability Section 3(2) provides registration of the real estate project shall not be required in the following cases- where the area of land to be developed does not exceed 500 sq. meters or the number of apartments to be developed does not exceed 8 inclusive of all phases; if the appropriate Government considers it necessary, it may reduce the threshold limit of the same; where the promoter has received the completion certificate prior to the commencement of this Act; for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building as the case may be, under the real estate project. Procedure for Registration Section 4 and 5 of the Act provides the procedure of registration. The procedure is as detailed below: Every promoter shall make an application to the Real Estate Regulatory Authority for registration in such form, manner, within such time and accompanied by such fee as may be specified by the regulations made by the Authority; The promoter shall enclose the following documents along with the application- a brief details of his enterprise, type of enterprise and the particulars of registr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation and the names and photographs of the promoter; a brief detail of the projects launched by him for the past five years, whether completed or being developed including the current status of the said projects, any delay in completion, details of cases pending, details of types of land and payments pending; an authenticated copy of the approvals and commencement certificate from the competent authority; if the project is to be developed in phases, an authenticated copy of the approvals and commencement certificate from the authority for each such phase; the sanctioned plan, layout plan and specifications of the proposed project or the phase thereof, and the whole project as sanctioned by the competent authority; the plan of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopment works to be executed in the proposed project and the proposed facilities to be provided thereof including fire fighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy; the location details with clear demarcation of land dedicated for the project along with its boundaries including the latitude and longitude of the end points of the project; proforma of the allotment letter, agreement for sale and the conveyance deed proposed to be signed with the allottees; the number, type and the carpet area of apartments for sale along with the area of the exclusive balcony or verandah area and the exclusive open terrace areas apartment with the apartment, if any; the number of areas of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garage for sale in the project; the names and address of his real estate agents, if any, for the proposed project; the names and addresses of the contractors, architects, structural engineer, if any and other persons concerned with the development of the proposed project; a declaration, supported by an affidavit, which shall be signed by the promoter or any person authorized by the promoter, stating- that he has a legal title to the land with legally valid documents with authentication of such title, if such land is owned by another person; that the land is free from all encumbrances, or as the case may be details of the encumbrances on such land including any rights, title, interest or name of any party in or over such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land along with details; the time period within which he undertakes to complete the project or phase thereof, as the case may be; that 70% of the amounts realized for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a schedule bank to cover the cost of construction and the land cost and shall be used only for that purpose; the promoter shall withdraw the amounts from the separate account to cover the cost of the project, in proportion to the percentage of the completion of the project; the amounts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in practice that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withdrawal is in proportion to the percentage of the completion of the project; the promoter shall get his accounts audited within 6 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 Chartered Accountant and it shall be verified during the audit 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; he shall take all pending approvals on timefrom the competent authorities; that he has furnished such other documents as may be prescribed by the rules or regulations made under this Act; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and such other information and documents as may be prescribed; The Authority shall operationalize a web based online system for submitting application for registration of projects within a period of one year from the date of its establishment; On receipt of the application the Authority shall within a period 30 days grant registration and provide a registration number, including a Login Id and password to the applicant for accessing the website of the Authority and to create his web page and to fill therein the details of the proposed project or 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 under there under after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... giving him a reasonable opportunity. Deemed registration Section 5(2) provides that if the Authority fails to grant the registration or reject the application, the project shall be deemed to have been registered and the Authority shall within a period of 7 days of the expiry of the said period of 30 days, provide a register number and a long id and password to the promoter for acceding the website of the Authority and to create his web page and to fill therein the details of the proposed project. Validity of registration Section 5(3) provides that the registration granted shall be valid for a period declared by the promoter for completion of the project or phase thereof. Extension of registration Section 6 provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the registration granted may be extended by the Authority on an application made by the promoter due to force majeure , in such form and on payment of such fee as may be specified by regulations made by the Authority. The Authority may in reasonable circumstances without default on the part of the promoter, based on the facts of each case, and for the reasons to be recorded in writing, extend the registration granted to a project for such time as it considers necessary, which shall, in aggregate, not exceed a period of one year. No application for extension of registration shall be rejected unless the applicant has been given an opportunity of being heard in the matter. Revocation of registration Section 7 provides that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Authority, on receipt of a complaint or suo motu or on the recommendations of the competent authority, revoke the registration granted after being satisfied that- the promoter makes default in doing anything required by or under this Act or the rules, or the regulations made there under; the promoter violates any of the terms or conditions of the approval given by the competent authority; the promoter is involved in any kind of unfair practice or irregularities; the promoter indulges in any of fraudulent practices. The registration shall not be revoked unless the Authority has to given the promoter not less than 30 days notice, in writing, stating the grounds on which it is proposed to revoke the registration and has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered any cause shown by the promoter within the period of that notice against the proposed revocation. The Authority may, instead of revoking the registration, permit it to remain in force subject to such further terms and conditions so imposed shall be binding upon the promoter. Unfair practice The explanation to Section 7(1) defines the term unfair practice as a practice, which for the purpose of promoting the sale or development of any real estate project adopts any unfair method or unfair or deceptive practice including any of the following practices- the practice of making any statement, whether in writing or by visible representation, which- falsely represents that the services are of a particular stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard or grade; represents that the promoter has approval or affiliation which such promoter does not have; makes a false or misleading representation concerning the services; the promoter permits the publication of any advertisement or prospectus whether in any newspaper or otherwise of services that are not intended to be offered; Effect of revocation Section 7(4) provides that the Authority, upon revocation of the registration- shall debar the promoter from accessing its website in relation to that project and specify his name in the list of defaulters and display his photographs on its website and also inform the other Real Estate Regulatory Authority in other States and Union Territories about such revocatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or registration; shall facilitate the remaining development works to be carried out in accordance with the provisions of Section 8; shall direct the banking to freeze the account and thereafter take such necessary actions, including consequent de-freezing of the said account, towards facilitating the remaining development works in accordance with Section 8; may, to protect the interests of allottees or in the public interest, issue such directions as it may deem necessary. Obligation of Authority Section 8 provides that upon lapse of registration or on revocation of the registration the Authority may consult the appropriate Government to take such action as it may deem fit including the carrying out of the remaining dev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elopment works by competent authority or by the association of allottees or in any other manner as may be determined by the Authority. The decision or order of the Authority shall take effect until the expiry of the period of appeal. In case of revocation of registration the association of allottees shall have the first right of refusal for carrying out of the remaining development works. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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