Wednesday, 12 December 2018

India: RERA- Haryana: Withdraw certifications to incomplete projects

Improvement in opportunities and the growing scale of economy in the country has elevated India to emerge as one of the favourable destinations for carrying out business. This has led to rise in the real estate sector as well. It is one of the major sectors dominating the argo-based economy of the nation. With increasing Gross Domestic Product, real estate has expanded the scope in residential as well as commercial arena.

Regulatory framework governing Real Estate

In order to promote the real estate sector and to ensure sale of plot, apartment or building, or sale of real estate project, in an efficient and transparent manner to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal, the Government has enforced the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as the “Act”). The Act has also established the Real Estate Regulatory Authority (hereinafter referred to as the “Regulatory Authority”) and the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Authority.

The monitoring of the issues relating to real estate at the local level, each State has formulated its independent real estate regulation and development rules.

Legally Saleable

According the provisions of the Act, no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase any real estate project unless a completion certificate has been obtained certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws. [Section 3(1) read with Section 2(q) of the Act].

In furtherance to the execution of conveyance deed in favour of the allottees, the promoter of the real estate project is required to obtain the occupancy certificate permitting occupation of any building, which has provision for civic infrastructure such as water, sanitation and electricity, as applicable as per local laws to enable handing over of the possession to them. [Section 17 read with Section 2(zf) of the Act]

The promoter of the real estate project is responsible to obtain the completion certificate or the occupancy certificate, or both, as applicable as per local laws or other laws for the time being in force and to make it available to the allottees [Section 11 (4) (b) of the Act].

In the news…

Considering the troubles faced by the homebuyers, the Haryana Real Estate Regulatory Authority - Gurugram bench has ordered the Town and Country Planning Department (hereinafter referred to as “DTCP”) Haryana, to withdraw the Completion Certificate, or Occupation Certificate, issued to projects that are yet to complete the development. [1] The DTCP has been required to initiate an inquiry as to how such certificates have been procured fraudulently. Show-cause notices have been issued to such builders who have deceived to obtain the aforesaid certifications in respect of incomplete projects. The regulatory authority has directed DTCP to take disciplinary action against officers with whose connivance builders have secured clearances.  

With a view to safeguard the interests of the real estate buyers, the Regulatory Authority of Haryana has come forward with a pragmatic approach to take action against the developers who have illegally obtained occupation/ completion certificate in respect of projects which fail to meet the criteria of completion.


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