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RERA IS THE DE FACTO regulator of sector, says HARERA

In a historic judgment, the Gurugram Bench of Haryana RERA has expanded the state regulator’s scope of adjudication in the real estate sector and pronounced that the state RERA (HARERA) is the de facto regulator of the sector

All real estate projects will come under the ambit of Real Estate (Regulation and Development) Act, 2016, and, consequently, under the Real Estate Regulatory Authority (RERA) instituted by each state and Union territory, Union minister for housing and urban development, Hardeep Singh Puri, has said. This lays to rest doubts whether all projects would be covered under RERA.

“Eventually, all the real estate projects will come under the Real Estate (Regulation and Development) Act, once its mechanism is established in all the states,’’ Puri said. He also said that that all projects under construction in all the states are already under RERA.

Earlier, the Gurugram Bench of Haryana RERA (HARERA) headed by K K Khandelwal, chairman, and two members, Samir Kumar and Subhash Chander Kush, said in a judgment that all real estate projects are covered for land and title defect liability throughout the cycle of transaction.

The judgment held that projects, whether registered under HARERA or not, are both under the ambit of RERA and customer complaint may be filed in respect of both. Nowhere does the Real Estate (Regulation and Development) Act of 2016 mention that RERA is applicable only upon registered projects, the judgment said.

The real estate act provides that certain categories of projects are not required to register, but these are within the ambit of the act, the judgment said. Projects on less than 500 square metres and comprising less than 8 units have been excluded from registration, under Section 3(2) of the act. But they are not out of the purview of the other provisions of the act, the judgment said.

Thus, if a buyer finds a defect in the structure of his house in a project which is not registered, he can approach the state’s RERA for redressal. This landmark judgment was pronounced in the case of Simmi Sikka versus Emaar MGF.

The Gurugram Bench not only settled the confusion over the “applicability of the real estate act” and “registration of projects”, but also attempts to nullify the effects of dilution of the provisions of the act through the rules formulated for Haryana RERA rules, a senior official of HARERA said. Puri, however, declined to comment on the judgment.

But the minister cautioned that there were attempts at tweaking RERA as far as current projects were concerned. “But I think that will come to naught, because, as RERA mechanism are established in states, all projects will be covered by it. So, I think it’s going in that direction,’’ the minister said on the sidelines of the CII-CBRE real state conference.

Puri said RERA would be the regulator for the real estate sector. Developers, however, have decided to oppose the ruling. Getamber Anand, chairman of Credai and CMD of ATS, said this would only complicate the issue and would not help the sector.

He said Credai would talk to authorities and try to convince them not to include completed projects under its purview, as this was not the mandate of the law. If the need arises, they may move a higher court for redressal, Anand said.

Khandelwal said in his judgment that as the real estate act specifically holds the developer responsible for workmanship and structural defects of his project for five years from the date of sale, projects which were completed and handed over during the last five years, too, are covered for defect liability.

This decision has also settled the controversy over projects under construction. These are now treated as projects where Completion Certificate has not been issued before the commencement of the real estate act, that is May 1, 2017.

However, the judgment said that mere application for occupation or completion does not exempt a project from registration. It is only grant of Completion Certificate before the commencement of the act which will exempt a project from registration. HARERA Gurugram further pronounced that all new projects must be registered with the regulator, irrespective of whether the developer intends to market his project after completion or during the construction phase itself.

Source : TOI

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