Over 100 Projects In NCR Have No Valid Registration: UP-RERA
More than 100 real estate projects in the UP cities falling under the national capital region (NCR) are currently running without sanctioned maps and registrations, the Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has said. The Authority will not be renewing the registrations of these housing projects, since the developers of these projects are not able to secure loans to help settle their debts.
According to Real Insight – Q2CY21, a quarterly analysis of India’s eight prime residential markets by the Elara Technologies-owned company, homes sales in the NCR showed a 54% decline QoQ during April-June period in 2021.
UP Developers Will Have To Follow Govt-Set Format To Write Builder-Buyer Agreement
The Chief Minister Yogi Adityanath-led Uttar Pradesh was among the states that notified the Real Estate (Regulation & Development) Act, 2016, without the Centre having to nudge them. The Central law came into force on May 1; soon after, rules were notified by the state government. However, it was only on July 26 that UP was able to launch its Real Estate Regulatory Authority website (www.up-rera.in). According to media reports, the site slowed down as a great number of complaints — as many as 15,000 in number — poured in right after the launch. The sheer number of complaints is indicative of the troubles homebuyers in the state might have faced in the past — not so anymore.
Let us look at the key features of UP's version of the law, and how it promises to guard the interests of homebuyers.
What defines as an ongoing project?
Now, developers of the ongoing projects will have to register their projects with the state RERA. It is only after doing so and receiving registration number that developers can promote and advertise their projects. In case of any failure in this regard, they will have to pay 10 per cent of the value of the project as fine or face a jail term.
That leaves us with one question, what falls under the definition of “ongoing projects”?
The Central law defines "ongoing projects" as those projects for which a completion certificate has not been issued. Developers of such projects, says the Central law, will have to make an application to the authority for registration "within a period of three months from the date of commencement of this Act".
The UP version of the law is more specific about what is not covered under the law.
In UP, an ongoing project would be that for which development is going on and a completion certificate has not been issued. Projects that meet any of the four conditions would not have to register themselves with the authority:
- If the work for maintenance has been issued to the local authority.
- If the common areas and facilities have been handed over to the Residents Welfare Association for maintenance.
- If all the development work has been completed and the sale deed for 60 per cent of units has been executed.
- If all development work has been completed and an application has been made to the competent authority for issuing a completion certificate.
What about builder-buyer sale agreement?
Following the suggestion of an 11-member high-powered panel, the state Cabinet on October 10 approved changed in the Uttar Pradesh Real Estate (Regulation & Development) (Agreement for Sales Rule) 2018. Now, real estate developers in the state will have to sign an agreement to sale with buyers, and register it with the Sub-registrar duly. The state will soon publish a standard format for this purpose. This move, say officials, would provide uniformity in purchase process and end ambiguity. Currently, developers use different formats while designing builder-buyer agreements, the conditions of which are often tilted in their favour.
What lies under the carpet?
While the Central law says the sale of an apartment now would only be based on carpet area. The UP version says that developers of existing projects "should disclose the size of the apartment based on carpet area, even if earlier sold on super built-up area or built-up area".
What are developers' responsibilities?
As prescribed in the Central version, developers in UP cannot make any changes to the plan that had been sold without the written consent of the buyer. However, there are some points where the state law is different from the Central law.The Central law mandates that developers are liable to provide all documents related to the land upon which they plan to develop the project. This land must be free of any encumbrances. However, in case there is any loss to buyers owing to
The Central law mandates that developers are liable to provide all documents related to the land upon which they plan to develop the project. This land must be free of any encumbrances. However, in case there is any loss to buyers owing to defective land title, the developer will be liable to compensate buyers. While the UP law of the version does mandate developers to provide authenticated documents involving land title, and the documents in case there are any encumbrances, it does not speak on the point of compensation in case the land title is found faulty at a later stage. Similarly, developers in UP will also not be responsible for fixing any structural flaws as the state law is silent on that point. According to the Central law, developer will be responsible for rectifying structural faults till five years of giving possession of a project without charging anything.
Need to know
- The highest jail term for a developer who violates the order of the appellate tribunal of the RERA is three years, with or without a fine.
- Any delay in project completion will make the developer liable to pay the same interest as the EMI paid by the buyer.
- Every project measuring more than 500 square metres or more than eight apartments will have to be registered with the RERA.