Is Revocation of Registration of Real Estate Project-A Solution for all ?

Is Revocation of Registration of Real Estate Project-A Solution for all ?
  • General
  • Wednesday 17th April 2019
  • Author: Shreya Uppal

Highlights

  • It has issued Directions which has clarified that it will consider only those complaints for revocation of project which involves Association of Allottees.

  • Many complaints have been received, therefore it has set one limit which was necessary for the welfare of both the parties so that proper balance can be maintained between Demand and Supply cycle and unnecessary Inventory Cost can be reduced.

After two years of existence of MAHARERA, some requisite actions have been taken by the Authority to bring some more Transparency in the system against the complaints which are being received for the purpose of Revocation of Registration of Projects. It has issued Directions which has clarified that it will consider only those complaints for revocation of project which involves Association of Allottees. Association of Allottees can be any Association or Society or any other Body consisting of Majority of Allottees i.e. Atleast 51% including members to whom plot/apartments have been allotted/sold or otherwise transferred including Rehab portion. Many complaints have been received, therefore it has set one limit which was necessary for the welfare of both the parties so that proper balance can be maintained between Demand and Supply cycle and unnecessary Inventory Cost can be reduced.

In its recent order dated 28.03.2019, it has also explained the proper procedure to file the complaint. Some important underlying points have been mentioned which are required to be followed by the Association of Allottees while filing the complaint. The complaint should include Declaration  confirming that any complaint regards to the project under consideration has not been filed with NCLT/Debt Recovery Tribunal or any other act including IBC/SARFAESI ACT etc. and no proceedings are pending. The sole purpose of the Authority regarding this declaration is to ensure Non-Duplication of Services rendered and to ensure Speedy Trial in any court of law. It should also include the list of All Stakeholders with available contact details including Promoter, Architects, Engineer and Chartered Accountants' respective Certifying Form, banks listed in Encumbrance Certificate and other party having third-party interest in the project. The Encumbrance Certificate is a mandatory document used in property transactions as evidence of free title/ownership. When buying a house, flat or plot, it is important to verify that the property does not have any monetary or legal dues. And  Encumbrance Certificate (EC) ensures that there is complete ownership of the property without any monetary or legal liability. The EC for the property can be obtained from the sub-registrar’s office where the particular property has been registered.

After receiving a Valid Complaint, MAHARERA shall serve Notice to the promoter, stating the grounds which it is proposed to revoke the registration for which the promoter is provided Thirty days to present his case. The copy of the aforesaid notice shall also be provided to all the stakeholders. All the complaints clubbed together for the same project shall be heard by Chairperson/Member. The MAHARERA may constitute Designated Resolution Panel (DRP) consisting of One member from Promoter's Associations and One member from Consumer Forum. The member of the said panel would be selected out of the existing conciliation forum members who have adequate professional experiences in the Real Estate sector or is a Chartered Accountant or Architect, or Engineer, or lawyer. The said panel with the help o f Association of Allottees shall prepare a blue Print for completion of the project.

 

 The Blueprint shall consist of the following:

  1. Financial Blueprint detailing current financial status of the project including Cash in Hand, liabilities, expected revenue and so on. It shall also contain a financial estimate to complete the project and detailed roadmap towards arranging the finances.
  2. Construction Blueprint determining the amount of construction work needed to complete the project. Accordingly, detailed roadmap with timelines for completion of work including a selection of a contractor.
  3. Overall, DRP with the help of Association of Allottees shall prepare the detail blueprint for project completion.
  4. The existing professionals attached to MAHARERA Registered Project namely  Architect , Engineer, Chartered Accountant shall assist the said panel in the preparation of the blue print.

 

The aforesaid entire exercise will have to be completed within a period of Four months. However, MAHARERA by recording reasons may extend the said period.

  1. After finalization of blue print, the said blue print will be submitted to the MAHARERA by Designated Resolution Panel

After the blueprint stage here comes the crucial stage of decision taking which will be taken by MAHARERA either in the motion of the the promoter of in the motion of the Association of Allottees. This decision will differ case to case which cannot be defined universally and purely the Sole Discretion of MAHARERA.

If the decision comes against the promoter and as a consequence of which project has to be revoked then the following steps shall be undertaken:

  1.  lssuance of Intimation of Revocation of Registration of Project as per Form D.
  2. The project shall be moved from Registered projects to List of Revoked Projects.
  3. Promoter shall be no longer be able to update / correct / extend etc the details of the project.
  4. Mail shall be sent to Maharashtra Real Estate Appellate Tribunal informing them on the same.
  5. Mail shall be sent to Real Estate Regulatory Authorities in other states & union territories informing about the Revocation.
  6. Freezing of the project designated bank account and thereafter take such further necessary actions, including consequent de-freezing of the said account, towards facilitating the remaining development works.
  7. MAHARERA may also consult the State Government for finalization of blueprint for completion of the project.
  8. On the expiry of the Appeal period (Sixty Days), construction of the project may commence as per the blueprint prepared by DRP.
  9. Under the guidance of MAHARERA, the Association of Allottees shall work on completion of the project as per blueprint and provide updates to MAHARERA on Monthly basis.

All these directions shall stand effective from the date of order and shall be complied with. 

So, we have seen how the authority has provided a Checklist of Documents to be submitted while filing a complaint, and how it has maintained Parity between Promoter and Buyer which was the main aim of RERA.

Harming no-one and Taking Care of All, that is what RERA is all about!!

For consultancy related to Association of Allottees, contact us.

 

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