Confusion Lingers Over RERA's Exemption for Small Real Estate Projects
Section 3 of RERA exempts real estate projects with less than 500 sq mt plot area from mandatory registration. This raises questions about the rights of homebuyers in such exempted projects.
ReraReal EstateHomebuyerMahareraLegal IssuesReal Estate MaharashtraNov 04, 2024
Alok Hardikar from Vile Parle (East) raises a pertinent question Can a homebuyer file a complaint with MahaRERA against a builder of an exempted real estate project for delays in possession? Is the builder of such an exempted project liable to comply with RERA obligations, such as paying interest for delayed possession or providing refunds with interest and compensation in case of cancellation?
Understanding the RERA Exemption
Section 3(1) of RERA clearly states that no promoter can advertise, market, book, sell, or offer for sale any plot, apartment, or building in a real estate project without registering it with the regulatory authority established under RERA. However, Section 3(2)(a) provides exemptions for small projects where the land area does not exceed 500 sq mt or the number of apartments does not exceed eight.
Legal Views and MahaRERA's Stance
MahaRERA has taken the position that real estate projects exempted under Section 3(2)(a) are also outside the scope of RERA. This means that MahaRERA does not entertain complaints from homebuyers of such exempted projects, even if the complaints relate to delays in possession or refunds with interest and compensation. The Bombay High Court has recently held that the RERA Act does not apply to these exempted projects.
However, Advocate Shirish V Deshpande, Chairman of Mumbai Grahak Panchayat, respectfully disagrees with this finding. According to Deshpande, RERA is intended to regulate the entire real estate sector, not just the registered projects. If the parliament had intended to limit RERA's scope, it would have clearly stated so.
Key Provisions of RERA
- Section 11(4)(b) Requires promoters to form an association of allottees within three months of the majority of allottees booking their flats.
- Section 17 Mandates the execution of the conveyance of the property within three months from the occupancy date.
- Section 18 Holds promoters liable to pay interest to allottees at the prescribed rate in case of delayed possession. If an allottee cancels the booking due to delay, the promoter is liable to refund the amount with interest and compensation for losses due to delay.
- Section 31(1) Allows any aggrieved person to file a complaint with the authority or the adjudicating officer for any violation or contravention of the RERA Act, rules, or regulations.
Parliamentary Intent and Legal Ambiguity
If the parliament had intended to restrict RERA's scope to only registered projects, it would have made this very clear. The definitions of allottee, promoter, and real estate project in RERA are not confined to registered projects alone. Therefore, the view taken by MahaRERA and the High Court is erroneous and contrary to the parliamentary intention.
Relief for Homebuyers
Until the High Court judgment is overruled by a division bench, affected homebuyers in exempted projects can approach consumer commissions for appropriate relief. This ensures that homebuyers are not left without recourse in case of delays or other issues with their projects.
Conclusion
The legal ambiguity surrounding RERA's exemptions for small real estate projects continues to create confusion and uncertainty for homebuyers. It is crucial for stakeholders to seek clarity and advocate for a consistent interpretation of the law to protect the rights and interests of homebuyers in all real estate projects, regardless of their size.
About Mumbai Grahak Panchayat
Mumbai Grahak Panchayat is a consumer protection organization dedicated to advocating for the rights of consumers and providing legal assistance and support in various consumer-related issues, including real estate. For more information or to submit queries, you can contact Advocate Shirish V Deshpande at shirish50i@yahoo.com.
Frequently Asked Questions
What is the exemption provided under Section 3 of RERA?
Section 3 of RERA exempts real estate projects with less than 500 sq mt plot area or fewer than eight apartments from mandatory registration.
Can homebuyers in exempted projects file complaints with MahaRERA?
No, MahaRERA does not entertain complaints from homebuyers in exempted projects, even if the complaints are about delays in possession or refunds.
What is the view of the Bombay High Court on exempted projects under RERA?
The Bombay High Court has held that the RERA Act does not apply to exempted real estate projects.
What are the key provisions of RERA that protect homebuyers?
Key provisions include forming an association of allottees, executing the conveyance of the property, paying interest for delayed possession, and refunding the amount with interest and compensation for losses.
What recourse do homebuyers in exempted projects have?
Until the High Court judgment is overruled, homebuyers in exempted projects can approach consumer commissions for appropriate relief.
Related News Articles
Ashiana Housing and Arihant Foundations to Launch Residential Project in Chennai with Rs 225 Crore Investment
Real estate companies Ashiana Housing and Arihant Foundations have collaborated to develop a new residential project in Chennai, with an estimated investment of Rs 225 crore.
Shapoorji Pallonji Group Consolidates Real Estate Assets Under New Holding Company
The Shapoorji Pallonji Group has formed a new holding company, Shapoorji Pallonji Real Estate (SPRE), to consolidate its real estate holdings spread across key cities in India.
BJP Government Accused of Running Real Estate Business in Goa, Says Congress
Congress alleges land scam and real estate business by BJP, sacred lakes and water bodies being converted
Bengaluru Metro Commences Oscillation and EBD Trials on Reach 5 Line
Bengaluru Metro starts Oscillation and EBD trials on Reach 5 line stretch. The trials are being conducted on the 8.03 km long line between Bommanahalli and RV Road.
Indiranagar's 100 Feet Road Leads Asia Pacific in Retail Rental Growth
Indiranagar's 100 Feet Road has surpassed other locations in the Asia Pacific region in terms of retail rental growth, making it a prime destination for businesses and investors.
Maharashtra to Finalise Executing Agency for Rs 150 Bn Corridor Project
The Maharashtra government is set to finalize the executing agency for the Rs 150 billion corridor project connecting Mumbai and Navi Mumbai. This initiative is aimed at enhancing the real estate and infrastructure development in the region.