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All provisions of Real Estate (Regulation and Development) Act, 2016 (RERA Act) have come in force in Maharashtra on 1st May 2017 and we are seeing the change in Real Estate Sector; inducing transparency and fair practices by the Promoters.;

The Maharashtra Real Estate Regulatory Authority (herein after referred to as “MahaRERA”) has been the benchmark RERA Regulatory Authority in India and has leaded the way for RERA Compliance in the State of Maharashtra. From creating the first RERA website in the country enabling the registration of project online, to the introduction of Conciliation and Dispute Resolution Forum, MahaRERA is certainly a benchmark in India.

With such a competent MahaRERA Authority, it is expected from the Promoters to duly comply with the compliances and obligations under the said Act. Following are some of the major compliances expected from the Promoters.

On procurement of CC, the Promoters shall make an application to “Maharashtra Real Estate Regulatory Authority” as provided in the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as the “MahaRERA Act”) for registration of the project by submitting an authenticated copies of the sanctioned plans, layout plans along with specifications and initial CC from the competent authority obtained in accordance with the laws as applicable for the project and where the project is proposed to be developed in phases, an authenticated copies of these approvals for each of such phases and manner within such time as specified under the MahaRERA Act.

The Promoters shall create a web page online through this IT solution, filling the details in the requisite forms, upload the required documents and pay the necessary fees. On failure to register the project under the provisions of the Act, the Promoters shall be liable to a penalty which may extend up to 10% of the estimated cost of the project as determined by the Authority.

No Promoters shall advertise, market, book, sell or offer for sale or invite persons to purchase in any manner any saleable flat as the case may be without registering the project with the MahaRERA pursuant to obtaining of the initial CC and sanction of plans as also all clearances from the competent authorities and not upon merely procuring the Intimation of Disapproval (IOD). Where the project is to be developed in phases, every such phase shall be considered a stand-alone project and the Promoters shall obtain registration under the Act for each phase separately.

The Promoters shall not accept a sum more than 10% (Ten per cent) of the cost of the saleable flats as an advance payment from the flat buyer without first entering into a written Agreement for Sale with such allottee and register the said Agreement for Sale as provided in MahaRERA Act. As provided under Rule 10(1) of the MahaRERA Rules read with Section 13(2) and read with Section 84(2) (h) of the MahaRERA Act, provides for a Model Form of Agreement (Annexure – ‘A’ of the MahaRERA Rules), the Agreement for Sale shall specify the date on which the possession of the saleable flat is to be handed-over, the rates of interest payable by the Promoters to the flat buyers in case of default etc.

The Promoters agree that a Draft of Agreement for Sale of their saleable flats shall be prepared by the Promoters’ Advocates and Solicitors and shall be verified by the Society’s Legal Advisors. The Draft so approved shall not be altered or modified in any manner without prior written approval of the Society.

As provided under Section 4(2)(l)(D) of the MahaRERA Act and subsequent Circular 03/2017 MahaRERA/Secy./File No. 27/79/2017 dated 7th June, 2017, the Promoters shall submit a declaration supported by an affidavit stating that 70% of the amounts realized from the new flat buyers of the saleable flats from time to time shall be deposited in a Separate Bank Account (hereinafter referred to as ‘SBA’) to be maintained in a scheduled bank to cover the cost of construction and shall be used only for purpose of construction of the project in proportion to the percentage of completion of the project.

Further, the amounts from the SBA shall be allowed to be withdrawn by the Promoters after it is certified by an Architect in Form-1, by an Engineer in Form-2 and a Chartered Accountant in Form-3 all the forms co-signed by the authorized representative preferably Chairman or Secretary of the Society (Since the Society is also a Promoter) that the withdrawal is in proportion to the percentage of completion of the project.

The Promoters are also required to get their SBA audited within six months after the end of every financial year by a chartered accountant in practice and shall produce a statement of accounts duly certified and signed by such chartered accountant and it shall be verified during the audit that the amounts collected for a particular project have been utilized for the project and the withdrawal has been in compliance with the proportion to the percentage of completion of the project.

Under the provisions of Rule 5 of the Maharashtra Real Estate (Regulation and Development) (Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2017, the Promoters are required to submit the said certificates to the scheduled bank operating the SBA for the purpose of withdrawal from time to time. Since, the Promoters are required to get their designated SBA audited within six months after the end of every financial year; these certificates shall be retained by the Promoters for the purpose of audit. However, the Promoters shall submit self-declaration to the bank once every quarter as provided in the MahaRERA Act. On failure to comply with the provisions pertaining to operation of SBA, the Promoters shall be liable to a penalty which may extend up to 5% of the estimated cost of the project as determined by the Authority.

As provided under Section 11 of the MahaRERA Act and as specified in Circular 14/2017, MahaRERA/Secy./File No. 27/548/2017, dated 1st November, 2017 issued by MahaRERA, the Promoters shall regularly update the information on the MahaRERA website with regard to the list of number and types of their saleable flats booked, the list of number of garages booked, the list of approvals taken and the approvals pending subsequent to CC from the competent authorities, status of the project and such other information and documents as specified etc. On failure to quarterly update the project under the provisions of the act, the Promoters shall be liable to a penalty which may extend up to 5% of the estimated cost of the real estate project as determined by the MahaRERA Authority.