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RERA exemptions that need to be relooked

Friday, November 17, 2017

While RERA was brought in to bring transparency in the real estate sector, there are certain conditions under which some projects are exempt. Advocate Tanmay Ketkar explains in detail

Registration of real estate projects is undoubtedly the most important provision of Real Estate (Regulation and Development) Act, 2016 (RERA). The registration of real estate projects paved the way for much-needed transparency in the sector. Initially, during the transition phase the real estate projects having OC were exempted from registering the project. Thereafter, now the projects below area of 500 square meters or less than 8 units and project of redevelopment not involving any fresh sales are exempted from registration.

Section 2(zn) of the RERA has defined the term real estate project. The definition does not differentiate the projects on basis of registration. Considering the definition both registered and unregistered projects would be covered in definition of real estate project. The rules framed under the RERA also does not differentiate between the registered and unregistered projects. After the Act and the Rules, the MahaRERA, to clarify the process and procedure of complaint redressal, published Standard Operating Procedure ( SOP) for handling of complaints. In the SOP, the very first point clarifies that the complaint cannot be filed against the unregistered projects. For the first time, the projects have been differentiated based on registration.

Double Standards?
When we consider the Act, Rules and SOP collectively, we are forced to conclude that the SOP varies from the Act and rules. The said variance is not only illegal but also has serious adverse practical implications. The variance in Act, rules and SOP is ought to create doubt and confusion about the subject matter.
Considering the justice and rule of law, it is unjust and unfair to deny forum of MahaRERA to the people, only on ground of non-registration of the project. It is double standard to differentiate complainants and giving opportunity to a class of people while denying same opportunity to other class of people.

As far as consumer complaints of real estate project are concerned, these complaints involve some key factors like delay in possession, quality of construction, conveyance, etc. In these circumstances it will not be proper to deny MahaRERA forum to complainants or consumers of unregistered projects or projects exempted from registration. For example, suppose a co-operative housing society is undergoing the redevelopment and there is no fresh or new sales involved.
Naturally, the project is exempted from registration. Now if such project is stalled, or delayed or there are other complaints about the area of units, quality of construction conveyance etc, then the consumers of such project cannot approach the MahaRERA. Alternatively, the aggrieved people or consumers will be compelled to approach the conventional civil and consumer courts, forcing the complainants or aggrieved persons to approach the forums, which could not deliver speedy justice, resulting in RERA and establishment of MahaRERA, as illogical and unfair.

Unfair exemptions?
Exempting some projects from registration can be understood, such an exemption would be helpful for small developers and small projects. Consequently since such an exemption denies the MahaRERA forum to complainants, it puts the aggrieved persons or a to greater disadvantage.

MahaRERA is apex regulatory body for real estate for the state of Maharashtra. Such an apex body is expected to redress smallest dispute and protect smallest stakeholder of real estate sector, and is expected to ensure justice for every aggrieved person of real estate sector.

Such a differentiation can be ruled out in two ways. Firstly, not exempting any project, however small or big it may be, from registration. This solution would be disadvantageous to small projects and small developers, who are currently relieved from registration and compliances. Secondly, the better option would be to allow every aggrieved person or consumer or stakeholder to approach MahaRERA.

In the longer run, it will not be proper to deny an opportunity of being heard to any stakeholder of real estate, or consumer or developer only on basis of registration and non-registration of projects.

RERA, MahaRERA and the entire system set up is new and completely different from conventional systems. Initially, there would be some difficulties, confusions, disputes about the system and its working enactment. It is not an offence to have some unanswered problems or issues. It is commendable that in recent past MahaRERA has issued various circulars, orders and explanations clarifying various doubts arouse. Let us hope that MahaRERA will redress this issue as well and will open its gates to all the consumers and aggrieved persons of real estate sector.

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