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.
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