1. Release of Draft Maharashtra Real Estate (Regulation and Development) (General) Rules, 2016
The Draft of Maharashtra Real Estate (Regulation and Development) (General) Rules, 2016 is yet to be notified, even though the deadline of 31.10.2016 set by the central government under Real Estate (Regulation and Development) Act, 2016 has passed. This was required to be done to create machinery in the state to ensure protection of home buyers and boost investments in the sector.
Under the Draft Rules, the Real Estate Regulatory Authority of the state will be established/ incorporated along with the Housing Tribunal. It will be mandatory for a realty project promoter to upload all disclosures, including information and documents, to the website of the Real Estate Regulatory Authority (RERA). The promoter will have to deposit 70% of the amounts realized from allottees in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost.
Let’s wait and look for the draft for feedback, before winter session of the Maharashtra legislature begins on December 5.
2. Maharashtra Real Estate Regulatory Authority passes its first order of suo-moto complaint
On June 05, 2017, Maharashtra Real Estate Regulatory Authority (“RERA”) has passed its first order in the matter of registered real estate agent named Sai Estate Consultant Chembur Pvt. Ltd. (“Agent”). While taking the suo moto cognizance in the matter, RERA has noticed that the Agent has violated Section 9(5) of Real Estate (Regulation and Development) Act, 2016 (“Act”) and Rules 14(1) and 14(2) of 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 by not quoting its registration number on some of the advertisements of its Real Estate Projects (“Projects”), and by wrongly quoting the same in few other advertisements. Also, the Agent was held liable for violation of Section 10(a) of the Act, as some of the Projects being advertised by Agent were not registered with RERA. Considering the aforementioned violations, RERA issued directions to the Agent to undertake rectifying steps in respect of alleged violations and in addition to same, has further imposed a penalty of INR 1,20,000 on the Agent for violation period of 12 days.
3. MahaRERA provides clarification on time period for transfer of title by promoters
On June 27, 2017, MahaRERA has issued an order providing clarification on the period within which promoter has to transfer the title by executing conveyance. In terms of Section 17 of the Real Estate (Regulation and Development) Act, 2016 (“RERA”), the promoter is obligated to execute a registered conveyance deed within specified period as provided under the local laws and in the absence of any local law, the deed shall be carried out by the promoter within 3 months from date of issue of Occupancy Certificate (“OC”). Also, Rule 9(2)(iii) of the Maharashtra Real Estate (Regulation and Development) (Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosure on Website) Rules, 2017 provides that if no period of conveying the title is agreed upon, the conveyance should be executed within 3 months from the date of issue of OC or within 1 month of registration of the legal entity of allottees, whichever is earlier.
However, prior to the commencement of RERA, Section 11(1) of the Maharashtra Ownership of Flats (“MOFA”) Act, 1963 read with Rule 9 of MOFA Rules stated that if no period for execution of the conveyance is agreed upon, the promoter shall transfer the title within 4 months from the date on which the co-operative society is registered.
Accordingly, MahaRERA has clarified that in respect of ongoing project which require to be registered under RERA, the agreements which are executed prior to May 1, 2017 shall be governed by the provisions of MOFA Act, 1963 and rules made thereunder. However, all the agreements of sale executed post May 1, 2017 shall be governed by Section 17 of RERA and the conveyance should be executed within 3 months from the date of issue of OC.