WIRC of ICAI X Taxmann's Maharashtra RERA Law & Practice

© WESTERN INDIA REGIONAL COUNCIL OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA Price : ` 3495 Second Edition: 2024 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise, without the prior permission, in writing, from the publisher.

Published by : CA. Arpit Jagdish Kabra, Chairman, Western India Regional Council of The Institute of Chartered Accountants of India ICAI Tower, Plot No. C-40,G-Block, Bandra Kurla Complex, Bandra (East) Mumbai 400 051, INDIA Tel : 022 33671400/1500 Email : wirc@icai.in Website : www.wirc-icai.org Disclaimer: In spite of having taken all possible due care to do away (avoid) mistakes or omissions, this publication is being sold on the condition and with precise/clear understanding that information provided in this book is solely for the reference and must not be taken as having authority of or in any way binding on the Authors, sellers, publishers or editors, who in no way owe any responsibility for any damage or loss to any person/s a purchaser of this publication or nor, for the result of any action taken on the basis of this work. Please do contact the concerned Department for convincing or reliable information. The Publishers shall be extremely obliged if errors are brought to their notice for carrying out the corrections in the future edition/s.

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MESSAGE FROM PRESIDENT, ICAI Dear Professional Colleagues,

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he Real-Estate sector is one of the fastest growing sectors and had witnessed many challenges resulted in loss to not only to the buyers of the properties but also to the builders and developers. Therefore, for the promotion and regulation of the sector in an efficient and transparent manner, the RERA (Real Estate Regulation Act) was introduced in 2016. The two years of the Act post implementation saw a steady mechanism of recovery. The Act provided for a Real Estate Regulatory Authority in each state which acts as an adjudicating body for a speedy dispute resolution.

The Real Estate Regulatory Authority (RERA) continues to be a cornerstone for transparency in the real estate industry, the establishment of which aimed to eliminate existing discrepancies and challenges within the sector, fostering uniformity and standardisation in its regulation. Though RERA has been instrumental in bringing back the investors’ confidence, yet the practicalities and intricacies of the law are to be fully understood by the interested parties and the professionals so that the law could be implemented in letter and spirit.

In this regard, I extend my sincere appreciation to the Office Bearers of the Western India Regional Council (WIRC) of ICAI for introducing this unique initiative of the “Maharashtra RERA Law and Practice” and in presenting the second edition of the “Maharashtra RERA Law and Practice”. The comprehensive publication on MahaRERA, encompassing the provision of RERA, Rules, Regulations, Notifications, Circulars and relevant case laws is indeed a significant stride towards understanding the law in a lucid manner.

I am optimistic that members engaged in this domain will find this resource immensely beneficial for their professional pursuits.

Wishing you all a fulfilling and an enlightening learning experience!

With best wishes, CA. Aniket Talati President, ICAI

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MESSAGE FROM VICE-PRESIDENT, ICAI

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n own home is the most precious thing which every citizen in our country aspires for. Traditionally, in India our forefathers’ only ambition in life used to be to have their own house. Recently, the developers and builders in India were involved in many practices which deprived the original owner of their home.

To curb the malpractices a comprehensive regulatory framework in the form of RERA was envisaged on a national basis. A recent industry analysis projects that real estate sales in India would reach $1 trillion by 2030, accounting for 13% of the country’s GDP by 2025. The Real Estate Regulation and Development (RERA) Act, 2016 is one of the most significant pieces of legislation approved by the Indian Government. Its goal is to improve India’s real estate sector by promoting increased accountability, transparency, citizen centricity, and financial restraint.

The Institute of Chartered Accountants of India (ICAI) has always taken the initiative to influence all facets of the profession by giving its members guidance and thought leadership. The same is bolstered by ongoing learning mechanisms and periodically released updated reference materials.

I am glad to note that the Western India Regional Council (WIRC) of the Institute of Chartered Accountants of India (ICAI) is coming out with the 2nd edition of Maharashtra RERA Laws and Practice covering relevant provisions of RERA Act, notifications, circulars and relevant case laws etc. This Practice Manual would be a suitable platform to provide latest information to the members pertaining to the above Act. I am hopeful that the members shall find this manual useful and relevant. My best compliments to all those associated with the compilation and finalisation of this Practice Manual.

CA. Ranjeet Kumar Agarwal Vice President, ICAI

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MESSAGE FROM CHAIRMAN, WIRC Dear Professional Friends,

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he rapid rate of urbanization and demand for housing and commercial space has focused on the need to ensure that the sector is regulated as per policy which has evolved and the consumers’ interest as a stakeholder is recognized and protected. The Chartered Accountants, being a partner in Nation Building have a leading role to play in development of this business sector in an orderly and regulated manner. Each sector regulated has grown multi fold over the years and has offered a considerable professional opportunity with responsibilities. Further the industry is secondhighest employment generator after agriculture and a major contributor to the country’s GDP, the real estate sector plays a pivotal role in the Indian economy.

It generates millions of jobs directly and indirectly, and its growth has a ripple effect on numerous industries, including steel, cement, and construction materials. With a projected market size of US$ 1 trillion by 2030, the Indian real estate sector presents immense opportunities for growth and development.

The government to regulate the most unregulated sector has implemented the Real Estate (Regulation and Development) Act, 2016 (RERA) on a pan India basis to develop and to protect the interest of the consumers by setting up a regulatory system which is most robust and transparent. The RERA Act, 2016 has casted huge responsibilities on the Chartered Accountants to ensure much needed transparency, the Chartered Accountant, has been recognised as a key professional stakeholder under the Act. RERA has provided amble professional opportunities which is required to be discharged with lot of responsibility and accountability. The professional opportunities include to offer advisory services, and effective mandatory compliances such as registration of projects, project updates, project extension, revival of projects, quarterly return filing, various certification and audit etc.

In addition, RERA has opened up opportunities on the litigation side as well.

In order to empower the stakeholders in the real estate sector post RERA and to join hands in creating the awareness for smooth implementation of the Act, Rules and Regulations, we at WIRC of ICAI have decided to bring out 2nd Edition of comprehensive MahaRERA Practice Manual.

WIRC of ICAI formed a study group of industry experts and representatives from all the stakeholders headed by CA. Ramesh Prabhu as editor and supported by CA. Vinay Thyagaraj as co-editor to compile, Review and update the MahaRERA Law & Practice Manual for the benefit of all stakeholders including Chartered I-9

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MESSAGE FROM CHAIRMAN, WIRC

Accountants, Advocates, Promoters (Landowners, Developers, Builders), Architects, Engineers, Lenders, Agents, Bankers, Allottees, Industry associations as well as Authorities.

The manual is systematically divided into chapters covering each aspect of real estate transactions with necessary legal provisions, steps & prescribed procedures for its compliance, the consequential risk of violation and inviting penal actions, and supported by judicial rulings. Other than RERA, this practice manual touches upon other related laws including Income Tax, GST, IBC, Consumer Protection Act, MOFA, Stamp duty, Registration, PMLA and FEMA all of which have a bearing on real estate transactions. It was felt that some degree of peripheral domain knowledge is essential to get a better understanding of the real estate sector.

It has been our constant endeavour at WIRC to publish the latest and best publications for the benefit of its members and students in particular and the stakeholders in general with the help of luminaries and experts in the respective fields.

I am indeed grateful and express my special thanks and gratitude to Hon’ble Shri Ajoy Mehta, IAS (Rtd.) Chairman, MahaRERA, Shri Mahesh Pathak, IAS (Rtd.) Member-1 MahaRERA and Shri Sanjay Deshmukh IAS (Rtd.), Consultant MahaRERA, MahaRERA Team and other RERA Authorities, officers who have shared their views, who encouraged us to bring out the comprehensive RERA manual. We express our gratitude to CA. Aniket Talati, President of ICAI and CA. Ranjeet Kumar Agarwal, Vice President of ICAI for providing the continuous guidance and support in building the capacity of the members and to bring out the second edition and also for sharing their message for this manual. We are thankful to each and every study group members who have devoted their time and energy in reviewing and updating the 2nd Edition of Maharashtra RERA Law and Practice.

We are grateful to the publishers Taxmann Publications Pvt. Ltd. who have shown the willingness to publish this 2nd edition of RERA Manual and the entire team of WIRC of ICAI who have wholeheartedly supported in this journey.

To conclude, we are confident that this RERA manual will serve as an effective guide, navigator, tool, ready-reckoner to practicing Chartered Accountants and the other professionals in building their real estate practice, to all other stakeholders to understand, appreciate and comply with the provisions of the real estate law and avail the maximum benefits offered by the law, rules and regulations. Most importantly, it will contribute to the creation of a more transparent, accountable, and sustainable real estate industry in India. RERA will be a part of growth of Indian economy RERA will be one among major contributor to the growth of the Indian economy.

Yours truly, CA. Arpit Jagdish Kabra Chairman - WIRC of ICAI

MESSAGE FROM CHAIRMAN, ALL INDIA FORUM OF REAL ESTATE REGULATORY AUTHORITIES

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hank you very much for Sharing the Manual of Maharashtra RERA law & Practice’. This is wonderful initiative, to bring updated volume of this manual.

I have gone through the manual and find it very comprehensive and a very valuable guidebook for all the stakeholders. It has up to date circulars of MahaRERA and all information at one place for promoters, home buyers, RERA practitioners as well as for general public.

I am sure that this useful manual will be very helpful guidebook for all, to understand the functioning of RERA Maharashtra, as well to adhere to compliance Mechanism , for better real estate development. I am sure other RERAs will also take similar initiative to bring such guide books.

I compliment ICAI for this important initiative.

Dr. Shrikant Baldi, IAS (Rtd.) Chairman - All India Forum of RERA (AIFORERA) and Chairman, Himachal Pradesh RERA and Former Chief Secretary of HP.

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FOREWORD

Shri AJOY MEHTA (I.A.S.) Chairperson, Maharashtra Real Estate Regulatory Authority (MahaRERA)

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t is a pleasure to learn that Western India Regional Council (WIRC) of Institute of Chartered Accountants of India (ICAI), has been conducting various knowledge updating programs for capacity building of their members and to make the regulatory system of RERA, more robust.

The 2nd Edition of “Maharashtra RERA Law and Practice” by incorporating the various policy changes undertaken by the MahaRERA is one of the proactive initiative by the Western India Regional Council (WIRC) of Institute of Chartered Accountants of India (ICAI) under the leadership of CA. Arpit Jagdish Kabra, Chairman of WIRC of ICAI and their team members by forming a study group headed by CA Ramesh Prabhu, consisting of industrial experts and professionals.

It is encouraging to see that the 2nd Edition has been upgraded by incorporating the orders, circulars issued by MahaRERA from time to time in respect of standardization of formats and the procedure to be followed. I am sure this edition will help all the stakeholders in understanding the provisions of the Act, Rules, Regulations, Orders and circulars and enable the compliances with the regulatory requirements.

I understand that the 2nd Edition has been reviewed by the experts and the Authorities across India who had participated in the 4 days Residential RERA Leadership Development Program held at Hyderabad organized by ICAI. This manual has a good compilation on the process for registration of the project, consent to be obtained for extension of the project, Quarterly Progress report, process to be adopted for de-registration of the projects, change of the promoters, consents required for change of plans, change of bank account, etc.

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FOREWORD

The manual has included a detailed explanation of each of the figures to be incorporated in Form No. 3 to be issued by CA for withdrawal of the amount from RERA designated account and annual audit to be issued in Form 5 by separate CA entity. The manual has included the legal and practical aspects of MahaRERA, it has also covered other important legal provisions affecting the real estate transactions such as Income Tax, GST, IBC, FEMA, PMLA, MRTP, DCPR, MOFA, Transfer of Property Act, Stamp duty, Registration, Consumer Protection Act, etc.

I am sure this Manual will be useful for all the stakeholders like Promoters, Real Estate Agents, Allottees, Association of allottees, its members, managing committee, Project Management Consultants, Contractors, Architects, Engineers, Chartered Accountants, investors, flat purchasers, developers, development managers, estate agents including the government, authorities and the policy makers. I am confident this manual will enable a better understanding of the regulatory environment that such efforts at documenting regulatory process would bring about healthy growth of the real estate sector.

(Ajoy Mehta) Chairperson, MahaRERA.

REVIEW AND APPRECIATION OF THE AUTHORITIES

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eview and Appreciation of the Authorities about the Maharashtra RERA Law and Practice 2024 – 2nd Edition:

MahaRERA Present and Past Members, Consultant, First Chairman and Former MahaREAT Photograph

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Messages

Shri. Mahesh Pathak, I compliment the team of experts and WIRC IAS (Rtd.), Member-1. of ICAI for bring out the updated version MahaRERA of Maharashtra RERA Law and Practice.

The complex provisions of Law has been discussed in detail and in a lucid language.

I am sure the stakeholders and the authorities will be benefited with the 2nd Edition.

Shri Sanjay Deshmukh, The 2nd edition of Maharashtra RERA Law IAS (Rtd.), Consultant, & Practice is an excellent work done by the MahaRERA group of experts. Also congratulate for holding 4 days RERA Leadership Development Program at Hyderabad inviting the RERA authorities for sharing the experience and suggestions.

I was amazed by the efforts taken by the team in bringing out the updated version.

The study group headed by CA. Ramesh Prabhu and CA. Vinay Thyagaraj under the guidance of CA. Arpit Kabra, Chairman of WIRC of ICAI deserves huge appreciation.

This is an excellent reference book for all the Stakeholders to work within the regulatory framework.

Shri S.S. Sandhu, IAS CA. Mr. Ramesh Prabhu and his team (Rtd.), have come out with a very invaluable Former Member (Admin) resource in the form of 2nd Edition of of Maharashtra Real Es- Maharashtra RERA Law and Practice 2024 for the benefit of all the stakeholders. I tate Appellate Tribunal was pleasantly surprised to know that the 1st edition was sold in no time and the further demand started pouring in even from states other than Maharashtra in the country. The overwhelming response the book received in a short time underlines its relevance and necessity for the matters relating to RERA domain. The usefulness of the book undoubtedly has resulted in bringing out the 2nd Edition of the book. I congratulate CA. Mr. Arpit Jagdish Kabra, Chairman of WIRC of ICAI and his team for bringing out the 2nd edition.

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REVIEW AND APPRECIATION OF THE AUTHORITIES

Name and Designation

Messages I am confident that the new edition of the book will provide further insights to its readers, academicians and practitioners into the realm of RERA application. This in turn will spur WIRC of ICAI to bring out regularly the further updated editions of the book.

I wish them all a great success.

Shri Gautam Chatterjee, I had an opportunity to review the 1st IAS (Rtd.), edition and 2nd edition of Maharashtra RERA Law & Practice being published First Chairman of

by WIRC of ICAI. Considering the size MahaRERA, of the book, a good decision has been Former Housing taken to bring out two books (1) ComSecretary of Govt of mentary with 75 chapters as 1st book (2) Maharashtra Bare Acts, Rules, Regulations, Circulars, Notifications, orders etc. as the second book. Regular revision of the manual is a must as the RERA is still evolving.

4 days Residential RERA Leadership Development Program at Hyderabad was a memorable as the professionals were studying and giving the presentation before the authorities to update their knowledge and the manual. Kudos to each of the contributors and WIRC of ICAI for such great work in building the resources.

Dr. Vijay Satbir Singh, Writing a book in this digital era is a IAS (Rtd.) very big task. A commentary with 75 chapters in evolving law like RERA and Former Member-1, its implementation process followed in MahaRERA Maharashtra through MahaRERA by preparing the 2nd Edition is mind blowing.

Congratulations to each of the team members and its mentor and guide CA.Ramesh Prabhu to motivate and update the second edition. The book will certainly help the stakeholders and the authorities for easy reference. I wish the 2nd edition also will be sold quickly, so that it may give way for the third edition.

REVIEW AND APPRECIATION OF THE AUTHORITIES

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essages from former Chief Secretary, former Principle Secretary to CM of Government of Maharashtra.

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Shri Sitaram Kunte, IAS Maharashtra RERA Law & Practice, 2nd (Rtd.), Edition is a wonderful reference guide Former Chief Secretary to the promoters, Practitioners and the of Maharashtra, former allottees. 75 chapters divided into 9 Housing Secretary and parts based on the perspective of each Former Municipal Com- stakeholders is well thought. The experts missioner of Greater have tried to discuss each activities in the regulatory system under separate chapter Mumbai to explain the provisions of law, procedure by referring to the Rules, circulars and orders. I compliment the chairman CA. Arpit Kabra of WIRC of ICAI to bring out this manual forming a study group under the subject matter expert CA. Ramesh Prabhu and CA. Vinay Thyagaraj is itself a great initiate.

Shri Subhash Lalla, IAS I personally know CA. Ramesh Prabhu (Rtd.), as we both had authored a book on Compendium of Self Redevelopment Former Priniciple by having deliberation, discussion with Secretary to CM of industry experts. I compliment CA. Arpit Maharashtra, Kabra, Chairman of WIRC of ICAI for Former Cooperative identifying his unique quality and forming Commissioner a study group of experts to bring out a and Registrar of great book on MahaRERA. The MahaRECooperative Societies, RA has always created new bench mark Maharashtra. across India due to its dynamic leadership of Shri. Ajoy Mehta, Chairman. The manual is a marvelous compilation of the judgments, order, circulars, notifications with necessary examples.

Review and Appreciation from other state Authorities and Stakeholders about the Maharashtra RERA Law and Practice 2024 – 2nd Edition: Photograph

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Dr. Shrikant Baldi, IAS Thank you very much for Sharing the Manual of Maharashtra RERA law & (Rtd.), Practice’. This is wonderful initiative, to Chairman - All India bring updated volume of this manual.

Forum of RERA (AIFORERA) and Chairman, Himachal Pradesh RERA and Former Chief Secretary of HP.

I have gone through the manual and find it very comprehensive and a very valuable guidebook for all the stakeholders. It has up to date circulars of MahaRERA and all information at one place for promoters,

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REVIEW AND APPRECIATION OF THE AUTHORITIES

Name and Designation

Messages home buyers, RERA practitioners as well as for general public.

I am sure that this useful manual will be very helpful guidebook for all, to understand the functioning of RERA Maharashtra, as well to adhere to compliance Mechanism , for better real estate development.

I am sure other RERAs will also take similar initiative to bring such guide books.

I compliment ICAI for this important initiative.

Dr. Ravinder N. Batta, This “Maharashtra RERA Law & PracIAS (Rtd.) tice” is a testament to the expertise and CEO, All India Forum of commitment to raising awareness and fostering ethical practices in the real RERA, Secretariat estate industry. It is a valuable resource that will undoubtedly benefit countless individuals and contribute to a more informed and regulated market.

Shri Kishore Chandra Maharashtra RERA Law & Practice imH.C, IPS(Rtd.) presses with its collaborative expertise, Chairman, Karnataka offering a practical and comprehensive Real Estate Regulatory guide to navigate MahaRERA rules and regulations. It stands as an invaluable Authority resource for industry, professionals, bankers, lenders, home buyers delivering essential insights into the intricacies of real estate in Maharashtra. A must-have for those seeking clarity and compliance in the ever-evolving real estate landscape.

Sri P H Kurian IAS Maharashtra RERA Law & Practice 2nd edition is need of the hour. I have gone (Rtd.) Chairman, Kerala RERA through many books on RERA. I am happy to say that updated manual has touched upon each aspects systematically. Congratulations to each of the team members for making available such a beautiful reference book. It will not only help promoters, allottees and practitioners but going to help Authorities the way MahaRERA has been making efforts in bringing transparency in the Regulatory regime.

REVIEW AND APPRECIATION OF THE AUTHORITIES

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Name and Designation Sri Naveen Verma, Chairman - RERA, Bihar

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Messages Message for MahaRERA Manual 2024 (2nd Edition)- “Maharashtra RERA Law & Practice “MahaRERA is among the pioneer States where the various provisions of RERD Act, 2016 is being fully implemented.

It is in this perspective that it’s Manual 2024 would be very useful for stakeholders of real estate sector not only in the state of Maharashtra but also throughout the country. With all important and relevant information being available at one place, this document would also be of great use for personnel working in RERA as it would serve as a ready reckoner.

I congratulate all those who have put tremendous efforts in coming out with this comprehensive document.

I wish all success to MahaRERA in all such endeavours aimed at bringing transparency in the real estate sector.”

Shri Gurijala Ravindranadha Reddy, IRS(Rtd.)

“Maharashtra RERA Law & Practice” is an expertly curated guide, blending diverse perspectives to offer a comprehenMember, Karnataka sive understanding of MahaRERA Rules Real Estate Regulatory and regulations. This will benefits all the stakeholders of the Industry.

Authority Rakesh Kumar Goyal, IRS (Rtd.) Member Punjab RERA.

It was enriching experience and pleasure to participate in 4 days residential RERA Leadership Development Program at Hyderabad. 63 RERA Experts by forming 10 team were presenting before the authorities about their study, understanding about the law by comparing its implementation across India. The 2nd Edition of MahaRERA Law & Practice is a great work done by the experts and similar exercise need to be done for other states. Since RERA is implemented by the states, the procedures adopted each of them has its own unique features.

I congratulate each of the team and the WIRC of ICAI for making available such wonderful reference guide to the stakeholders.

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REVIEW AND APPRECIATION OF THE AUTHORITIES

Name and Designation CA. Sanjeev Kumar Arora, Member, Haryana (Gurugram) RERA

Messages Kudos to each and every contributor of Maharashtra RERA Law and Practice 1st and 2nd Edition. A unique master guide for RERA practitioner. Each chapter is divided into provisions, applicable Rules, circulars, notification and the contrary orders and judgments at different levels.

FAQ with standard formats makes the life of the practitioner easy. Each of the team member have worked towards giving the best under the leadership of subject matter experts CA. Ramesh Prabhu and CA. Vinay Thyagaraj. WIRC of ICAI has created this bench mark and other states need to follow this and bring out the publication as useful resource material for the stakeholders.

Laxminarayan Jannu - The release of 2nd edition of MahaRERA MSc., MPhil., LLB manual, mark a significant milestone.

This comprehensive guide empowers Member, TS-RERA, stakeholders with valuable insights and Hyderabad regulations. A leap forward for transparency and accountability in the Real Estate sector.

“Congratulations to Maharashtra team on this achievement. A powerful tool to elevate standards and transparency in real estate. Your commitment to RERA sets a motivating example for progress and excellence. Here’s to a future of responsible and thriving real estate practices!”

Sri K. Srinivasa Rao Member, TS-RERA, Hyderabad

“Maharashtra RERA Law & Practice” impresses with its collaborative expertise, offering a practical and comprehensive guide to navigate MahaRERA regulations.

It stands as an invaluable resource for industry professionals its updated contents enrich with practical insights and case studies, references are meticulous effort to address the evolving needs of the industry. It is a valuable tool that promotes transparency and understanding with the real estate industry.

REVIEW AND APPRECIATION OF THE AUTHORITIES

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Name and Designation Sri Naresh Mathpal Member RERA - Uttarakhand

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Messages The authorities were surprised to witness hard work done by expert CA teams across India to update 2nd edition of MahaRERA Law & Practice. Kudos to CA. Ramesh Prabhu & his team for bringing out such an excellent reference book which includes Act, Rules, Regulations, notification, orders, FAQ, judgments from Authorities to Hon’ble Supreme court.

P. K. Biswal, IAS (Rtd.) The MahaRERA Manual 2023 is a wonderful compendium of Act, Rules, RegulaMember (Adm.) tions and Notifications that would prove Odisha Real Estate handy for all the those concerned such Regulatory Authority as promoters, home buyers, professionals and general public interested in the Bhubaneswar matter. To my knowledge rarely such a compendium is available in other states.

The roles and responsibilities of different stakeholders like chartered accountants, architects, housing societies are clearly spelt out in separate chapters here for their benefits. A common man can understand and appreciate the nuances of the legal positions explained in a very lucid manner. In the meanwhile, RERA has crossed six years and Maharashtra is the leader in real estate sector in the entire country. MahaRERA is also a pioneer in many innovative practices in RERA, which most other states follow.

Implementation of RERA has crossed many hurdles in our country and no doubt it has brought transparency and stability in the real estate sector. It’s heartening to note that all innovations in RERA have been documented well in this work. I am sure, the young researchers and practitioners in RERA will be immensely benefited through this brilliant documentation.

I would like to congratulate the authors for this monumental work on RERA, which will go a long way in making RERA regime more accessible and acceptable for the general public.

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REVIEW AND APPRECIATION OF THE AUTHORITIES

Name and Designation Shri S Selvakumar, Additional Director Tamilnadu - RERA

Messages It is an innovative attempt in bringing the MahaRERA law & practice manual which will be a guide for all the stakeholders.

I compliment the team for their effort in this regard.

CA. Kamal Kant Jain,

I was happy to go through the flow of Former Member of UP the contents in the 2nd Edition of MaReal Estate Appellate harashtra RERA Law and Practice. I can understand the efforts put by the team Tribunal in reviewing the manual and updating it.

The law evolves over the period. RERA is a new law. The guidance book of this type will bring more clarity in the provisions of law and also to adhere to the regulatory system. I congratulate WIRC of ICAI for continuously bring out the 2nd edition, shows its demand in the market. Each of the team members have worked hard to give this final shape to the manual.

Shri G Hari Babu PRESIDENT NAREDCO – National

My heartfelt appreciation for your outstanding contribution to the field of real estate through your book, “Maharashtra RERA Law & Practice.” In my capacity as the President of the National Real Estate Development Council (NAREDCO), I am particularly impressed by the quality and depth of your work.

“Maharashtra RERA Law & Practice” is poised to serve as an essential guide for developers, investors, buyers, and all stakeholders involved in the real estate ecosystem.

Your dedication to research and scholarship is evident throughout the book, and I am confident that it will significantly contribute to enhancing knowledge and understanding of RERA and its implications. On behalf of NAREDCO, I extend our sincere gratitude for your valuable contribution to the real estate industry.

Once again, thank you for your dedication and hard work. We wish you continued success in all your future endeavours.

REVIEW AND APPRECIATION OF THE AUTHORITIES

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Messages

Shri S.N. Reddy,

On Behalf of Our Builders Association of india , A largest and oldest construction industry Association in the country, I as Builders Association of president congratulate WIRC of ICAI to India come out with such a nice book.

President,

Maharashtra RERA Law & Practice 2nd edition is need of the hour. I have gone through many books on RERA. I am happy to say that updated manual has touched upon each aspects systematically.

Congratulations to each of the team members for making available such a beautiful reference book. It will not only help promoters, allottees and practitioners but going to help Authorities throughout the country , the way MahaRERA has been regulated the real estate industry Dr. Adv. Harshul Savla. I am happy to learn that a Master Key Authors on Real estate and updated 2nd Edition of Maharashtra RERA Law and Practice 2024 is released books.

by WIRC of ICAI covers all aspects of PhD Guide, Director Real Estate. in Suvidha Lifespaces Developer and Suvidha An excellent description on each of the activities and the compliance to be done Group by the promoters, Real Estate Agents R e c i p i e n t o f m a n y Allottees and the professionals is nicely Awards and the office explained with examples, provisions of bearers in many Devel- the law, Rules and with reference to opers Association. applicable orders, notifications, regulaCommittee member tions and judgments. of RERA Practitioners It is a book every stakeholders need to Welfare Association. own to refer regularly and I congratulate the entire team of study group and the head of the team CA. Ramesh Prabhu for their hard work in bringing out this manual.

Sri. Anand Gupta,

Happy to see such a knowledgeable and purpose full book. Maharashtra RERA Chairperson, Law & Practice 2nd edition is excellent Housing and Rera com- and need of the hour. I have gone through mittee of Builders Asso- many books on RERA. I am happy to say ciation of India that updated manual has touched upon each aspects systematically.

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REVIEW AND APPRECIATION OF THE AUTHORITIES

Name and Designation

Messages Congratulations to each of the team members for making available such a beautiful reference book. It will not only help promoters, allottees and practitioners but going to help Authorities the way MahaRERA has been making efforts in bringing transparency in the Regulatory regime

Nisha Nambiar

The MahaRera Law and Practice second edition is a well curated manual and is a Deputy Infrastructure comprehensive guide for all stakeholders.

Editor, The manual gives an overview of how the Times Of India. act has been implemented in the state Reports on RERA and and shares insights and will definitely help all stakeholders. If I may say the MahaRERA initiates, team’s efforts may be one a step towards notifications, orders, judgments in times of transparency and better implementation of the act, it truly is a giant leap for India, regularly. bringing about the necessary regulation in the housing sector I congratulate all the team members for painstakingly putting in all efforts to bring this out especially the core members who brainstormed about it and bought out the second edition Sri Harrish Jain

*Maharashtra RERA Law & Practice 2nd edition is one of the best RERA books.

President.

I have referred so far. I have learned that Brihanmumbai Devel- 2nd edition was prepared due to huge opers Association (BDA) demand received for its maiden edition. I am happy to say that updated manual has touched upon each aspects systematically.

Congratulations to each of the team members for making available such a beautiful reference book. It will be help promoters, allottees and practitioners, professionals and Authorities for easy implementation of Rera in Maharashtra.

REVIEW AND APPRECIATION OF THE AUTHORITIES

Dr. Rao VBJ Chelikani, President of Confederation of Resident Welfare Association ( A National body of RWAs).

Adv. Harshad Bhadbade, President of Bar Association of MahaRERA and MahaREAT as under.

I-24

The importance of Association of Allottees or Resident Welfare Association (RWA) has been statutorily recognized in Real Estate (Regulation & Development) Act 2016. It is the obligation of the promoters to register the Association of Allottees on booking majority of apartments in real estate project and convey the common area to it within 3 months of Occupation certificate. The enlarged and update MahaRERA Law & Practice , 2nd Edition has in detailed covered most aspects of Real estate and RWA. I appreciate the efforts of the authors in bringing out such an ideal referencer for the benefit of the stakeholders including policy makers. *MahaRERA has always created a bench mark in the implementation of RERA. Maharashtra RERA Law & Practice 2nd edition has covered every aspects of RERA implementation in the Maharashtra. I am sure, this book is itself another bench mark compared all the books available on RERA. CA. Ramesh Prabhu (editor), vice president of our Bar Association and CA.Vinay Thyagaraj (Joint Editor) with team of experts under the guidance of CA. Arpit Jagdish Kabra, Chairman, WIRC of ICAI have really worked hard to bring out such an unique book. I congratulate the entire team.

Dr. Suhas Patwardhan, Maharashtra RERA Law & Practice updated Chairman of Maha- 2nd edition is a great work done by the rashtra State Co-op- team of experts under the guidance of varerative Housing Fed- ious Authorities and the leadership of CA. Arpit Jagdish Kabra, Chairman of WIRC of eration Ltd. ICAI. The complete theoretical and practical knowledge and skill to comply with various provisions of RERA, Income tax, GST, IBC, consumer commission etc is nicely covered.

I congratulate the entire team and wish a great success.

J K RAO, IRS (Retd.) This comprehensive manual is sure to be of Ex- Chief Commis- immense help in understanding the compex regulatory framework brought into force in sioner & the real estate development sector in recent D i r e c t o r G e n e r a l years. It will also help fulfill the need in (lnv) of Income Tax. ensuring the transparency, accountability and efficiency in the implementation of RERA ACT, 2016.

I-25

REVIEW AND APPRECIATION OF THE AUTHORITIES

My compliments and best wishes to CA. Ramesh Prabhu, Editor, and his expert Associate for this valuable contribution in the field of real estate development.

CA SUJATHA G

On behalf of the Karnataka State Chartered Accountants Association (KSCAA), I extend my heartfelt congratulations and K a r n a t a k a S t a t e deepest appreciation for your outstanding Chartered Accoun- accomplishment in creating this comprehentants Association sive and informative MahaRERA manual.

(KSCAA) Demystifying the intricacies of Maharashtra RERA is no small feat, and you have done Karnataka so with remarkable clarity and accuracy.

President

The dedication of the team under the leadership of CA. Ramesh Prabhu and CA.Vinay Thyagaraj to this project has not gone unnoticed. The real estate industry, particularly in Maharashtra, has been in dire need of a reliable resource that simplifies the complexities of RERA. Your manual has filled that void, making RERA accessible and understandable for all stakeholders, from developers and builders to buyers and investors.

VIKRAM RAI PRESIDENT Bangalore Apartments’ Federation (BAF)

On behalf of the Bangalore Apartment Federation (BAF), I extend our heartfelt congratulations and deepest appreciation for your invaluable contribution to the real estate sector in Maharashtra. Your comprehensive and informative manual has shed much-needed light on the complexities of the Maharashtra Real Estate Regulatory Authority (MahaRERA), making it accessible and understandable for a wider audience.

represent and protect the interests of Apartments & Resident Welfare Associations across Bangalore.

The BAF is confident that the MahaRERA Manual will play a pivotal role in promoting a more ethical and consumer-centric real estate market in Maharashtra. We commend your dedication to public service and your unwavering commitment to empowering homebuyers. Your efforts will have a lasting positive impact on countless individuals and families across the state.

Shri Sanjay Shukla, “The information shared in the book is very comprehensive and it is a commendable IFS(Retd.) initiative. The book is a great source of Chairman, information for all the stakeholders.”

Chhattisgarh Real Estate Regulatory Authority Raipur, Chhattisgarh

REVIEW AND APPRECIATION OF THE AUTHORITIES

Shri Dhananjay Dewangan, IAS(Retd.)

I-26

“The book is a great initiative and a good compilation which will be beneficial to all stakeholders of the real estate sector.”

Member, Chhattisgarh Real Estate Regulatory Authority Raipur, Chhattisgarh Ravi Varma, Chairman,

I am happy to learn and congratulate the team WIRC of ICAI ( a regulatory body National Association of CA Profession) for bringing out their 2nd updated version of Maharashtra RERA of Realtors India.

Law & Practice. MahaRERA has taken three important steps for real estate agents (1) mentioning in the agreement for sale of Apartment to honour the obligations towards agent,(2) Training and competency certification of real estate agents (3) Registration of Self Regulatory organizations (SRO) for real estate agents. This proactive steps and other initiatives are nicely incorporated in the book. This will help other state authorities to do such proactive steps. This book will certainly help the stakeholders for necessary compliance.

PREFACE BY THE EDITOR AND CO-EDITOR

CA. RAMESH S. PRABHU,

CA. VINAY THYAGARAJ

Editor and Convenor for Study Group

Co-Editor

FROM EDITORS DESK Dear Friends,

W

e sincerely thank CA. Arpit Jagdish Kabra, Chairman, WIRC of ICAI and his entire team for giving us an opportunity to review and bring out the 2nd Edition of “Maharashtra RERA Law & Practice” by forming the Study group of experts from different States of India, RERA Authorities, Industry representatives and the stakeholders.

Considering the continuous demand for the updated version of the RERA manual, CA. Arpit Jagdish Kabra suggested to form the study group of experts in April, 2023 to review and update the RERA manual. MahaRERA Chairman Shri Ajoy Mehta, Shri Mahesh Pathak, Member-1 and Shri Sanjay Deshmukh, consultant MahaRERA had series of meeting with the office bearers of WIRC of ICAI and also with the ICAI to build the capacity of the CA members considering the various policy changes implemented by MahaRERA for better transparency and robust regulatory system. He inspired us to update the RERA manual and also agreed to have continuous interaction with WIRC of ICAI and ICAI. We are also thankful to CA. Aniket Talati, President of ICAI, CA. Ranjeet Kumar Agarwal, Vice President of ICAI, CA. Abhay Chhajed, Chairman, Committee for Commercial Law, Economic Advisory and NPO Co-operatives of ICAI, CA. Mangesh Kinare, vice Chairman of the committee and the entire team of ICAI for organising 4 days Residential RERA Leadership Development Program at Centre of Excellence, Hyderabad by involving 63 CAs from across Indian I-27

I-28

PREFACE BY THE EDITOR AND CO-EDITOR

States and are expert in RERA, also involving more than 15 RERA Authorities across India. The participants could interact with the RERA authorities, exchange knowledge, experience, deliberated during these 4 days.

Which also helped us to review and update the RERA manual.

Accordingly, the study group was enlarged to include all the real estate stakeholders like promoters, agents, professionals such as CAs, Architects, Engineers, Valuers, Advocates, Solicitors etc. officials from the Authority and the Appellate Tribunal.

The study group members volunteered to author the chapters for the RERA manual and RERA experts who have done 4 days Residential Leadership Development Program at Hyderabad volunteered to review and update the RERA manual.

The guidance of each of the Authorities in the 4 days RERA Leadership development residential program and who have agreed to be part of the study group have continuously guided us to bring out the present version of 2nd Edition of RERA manual.

We are thankful to all study group members who have gone extra mile to share their knowledge and expertise, experience and who have interacted and reviewed the chapters to bring the RERA manual to the present form.

The RERA manual has been divided into multiple chapters to address each practice area viz., registration certification, and litigation. It has also been organised to attend to needs of multiple stakeholders, namely, promoters, allottees, regulatory authorities, professionals, bankers, investors, etc. The relevant legal provisions, followed by the procedure, Standard Operating Procedure (SOP), FAQ and the judicial rulings have been included to make the manual simple, relevant, practical and practice oriented. We have tried to make the manual as simple as possible and have discussed the provisions along with Rules, orders, regulations and applicable circulars for the particular chapter. Without restricting the contents of the manual to only RERA provisions, the peripheral subjects connected with real estate transactions such as applicability of Income Tax, GST, Stamp duty, Registration, Insolvency and Bankruptcy, consumer protection, FEMA, PMLA, MOFA, Maharashtra Apartment Ownership Act, MRTP, DCPR etc. also included. This inter contextual knowledge, we believe will widen the canvas of practitioners in this field by adding to their domain knowledge of real estate sector.

The Manual attempts to serve as a guide to the new entrants, practitioners in the MahaRERA Practice and also as a reference manual to the professionals who are already into real estate practice. Keeping in mind the new area of practice opened

by RERA to Chartered Accountants, Architects, Engineers and to Advocates especially to represent before Real Estate Regulatory Authority, Adjudicating Officer, Real Estate Appellate Tribunal, this manual has covered many of the legal aspects. The various formats, drafts and specimen are included in the RERA manual as ready references. The Practitioners may accordingly, decide to adapt the drafts considering the facts circumstances and the relief claimed.

The team realised early on that one uniform approach & template cannot be applied for practice and non-practice oriented topics. We recognised this

PREFACE BY THE EDITOR AND CO-EDITOR

I-29

limitation and this challenge may not have been overcome fully. We hope, that the practice oriented topics will allow for both beginners and intermediate level practitioners to raise their standards. Limitations in the perceived shortcomings of written word of law should not restrict or bar practitioners in pursuing best practices, enabling them to meet the objectives of RERA simultaneously with that of the needs of the client.

We believe that no tool is ‘omnicompetent’ and there is no such thing as a master-key that will unlock all doors. Similarly, no manual is perfect and has all answers. For professionally qualified Chartered Accountants & Professionals.

It is up to the members to wear their thinking hats and apply their overall skills and specialised knowledge to seek out answers to difficult situations.

Yet, professionals advising clients must understand, and be clear that creative paper solution towards compliances cannot be a substitute for timely project completion as envisaged under RERA. When in doubt, revert to the objectives of RERA to get clarity.

This manual does not delve into how ideally the law should function. We are aware that today’s knowledge will not be the same as yesterday’s, and will give way to revisions, given the dynamic nature and evolution of RERA, legal pronouncements, as well as constantly changing building regulations.

Whilst all care has been taken to ensure arranging and organising the chapters and contents in a smooth manner, we are sure, there is enough scope to improve the arrangement as well as contents of the RERA manual. This being the first edition there may be many short comings. In all humbleness, we request the users of this manual to give the their feedback and constructive suggestions to improve the manual for revision in the proposed future editions to editors on : reramanual@gmail.com with a copy marked to WIRC of ICAI on email : wirc@icai.in.

We are thankful to CA. Kiran Niyati and Mr. Vishal Bamane for arranging the chapters properly and each of the study group members for their contribution and support in bringing out this 2nd edition of “Maharashtra RERA Law & Practice” Manual published by WIRC & ICAI. Once again, we are thankful to WIRC of ICAI and its team for giving us this opportunity to serve the profession.

Happy readings and our best wishes to build and develop MahaRERA Practice.

With regards CA. Ramesh S Prabhu, Editor

CA. Vinay Thyagaraj,

Convenor for Study Group

Co-Editor & Dy. Convenor of the Study Group

WESTERN INDIA REGIONAL COUNCIL 2023-24 Chairman WIRC Vice Chairman WIRC

CA. Arpit Jagdish Kabra CA. Hitesh Pomal

Secretary WIRC

CA. Sourabh Ajmera

Treasurer WIRC

CA. Ketan Saiya

Chairperson - (WICASA)

CA. Pinki Kedia

Members

CA. Murtuza Kachwala CA. Yashwant Kasar CA. Shweta Jain CA. Piyush Chandak CA. Abhijit Kelkar CA. Ankit Agarwal CA. Ankit Rathi CA. Chintan N. Patel CA. Gautam Lath CA. Hrudyesh Pankhania CA. Ishwarkumar Jivani CA. Ruta Chitale CA. Rahul Parikh CA. Sanjay Nikam CA. Shilpa Shinagare CA. Vikash Jain

Ex-Officio – Members

CA. Aniket Sunil Talati - President ICAI CA. (Dr.) Adukia Rajkumar Satyanarayan CA. Chhajed Piyush Sohanrajji CA. Chitale Chandrashekhar Vasant CA. Doshi Vishal CA. Durgesh Kabra CA. Khandelwal Dheeraj Kumar CA. Khandelwal Purushottamlal Hukamichand CA. Kinare Mangesh Pandurang CA. Savla Priti Paras CA. Sharma Umesh Ramnarayan

I-31

4 DAYS RESIDENTIAL RERA LEADERSHIP PROGRAM

1. Inaugural address by Sri. Aniket Talati, ICAI President. Present Telangana RERA Chairman, Sri. Satyanarayan, Naredco National President Sri. Haribabu, ICAI Central Council members, other dignitaries and 63 RERA Leadership development program participants from across India

4 days Residential RERA Leadership Development Study Course organised by the Committee for Commercial Laws, Economic Advisory, NPO and Co-operatives of ICAI at Centre of Excellence at Hyderabad on 27th October, 2023 to 30th October, 2023.

Under the guidance of CA. Aniket Talati, President, CA. Ranjeet Kumar Agarwal, Vice President of Institute of Chartered Accountants of India (ICAI), CA. Abhay Chhajed, Chairman, CA. Mangesh Kinare, Vice Chairman of Committee on Commercial Laws, Economic Advisory & NPO Co-operative of ICAI, and the team had arranged 4 days Residential RERA Leadership Development Program at Hyderabad from 27th October, 2023 to 30th October, 2023. CA. Ramesh Prabhu and CA. Vinay Thyagraj, both subject experts were given the responsibility to Co-ordinate and to form 10 teams with captain, vice captain and the presenters.

63 CAs, participating in this study course were registered by inviting the RERA I-33

I-34

4 DAYS RESIDENTIAL RERA LEADERSHIP PROGRAM

experts, authors, faculties, practitioners across India. The Chairman, Members of RERA Authorities, Chairman of Appellate Tribunals and other stakeholders were invited to present their views on the vision of RERA for next 10 years.

The study course was highly interactive, featuring group discussions and presentations on various crucial RERA topics, ensuring a well-rounded learning experience. The same is being organised in a unique format where participants are the Chartered Accountants practising in Real Estate Sector in various States, shall present States’ RERA Act, rules, a comparison and the best practices that may be followed. Participants are in assigned in 10 Teams and each Team is assigned unique subject which they have to study and is given an opportunity to present for around 60-120 minutes at the Residential Course to other 9 teams and the dignitaries.

Each team presentation may be chaired by State RERA Chairmen, Industry representatives, Home Buyers representatives or other senior officials. Further, a concept paper shall be drafted and be submitted to various RERA Authorities and all other stakeholders for consideration of best practices in RERA across the Country after the course is completed.

2. Group photo of participants with RERA Authorities of different States

Thus 3 fold activities are done by the participants of this Study course: (1) Before the Course: Each team is required to have group interaction about the practices followed by the RERA Authorities across India on a particular area and submit the Initial research paper to ICAI. (2) During the Course : At the Residential Course each team is given opportunity to present their paper, have interaction with other 9 team

4 DAYS RESIDENTIAL RERA LEADERSHIP PROGRAM

I-35

and invited distinguished dignitaries and incorporate the suggestion made by them.

(3) After the Course : After the course is completed, each team is required to submit their final research paper by incorporating the learnings of other experts in the study course.

The programme structure was thoughtfully designed not only to provide the best learning experience but also to foster interaction and the sharing of knowledge among participants. Throughout the programme, the participants get the opportunity to engage with eminent dignitaries from RERA Authorities across different States, facilitating a rich exchange of ideas and concepts. ICAI has also decided to award the best 3 team for its performance based on the marks given by other 9 team, dignitaries on the various parameters.

3. Valedictory function. RERA Authorities, ICAI Officers and Centre of Excellence, Hyderabad team members

Each Research paper presented by the team will contain the following: Comparative Study: Analyze and compare the procedures adopted by all 28 RERA Authorities in the implementation of the subject assigned to you. This analysis should reference the rules and circulars of respective states, and the information should be obtained by visiting the websites of these 28 states.

Case Laws and Orders: Discuss relevant case laws or orders from RERA, Appellate Tribunal, High Court, Consumer Courts, and the Supreme Court pertaining to the subject matter. Provide your team’s comments or insights on these case laws and orders.

I-36

4 DAYS RESIDENTIAL RERA LEADERSHIP PROGRAM

Best Practices: Examine the best practices implemented by respective states and propose improvements.

Shortcomings and Suggestions: Identify any gaps or shortcomings and offer suggestions to rectify them.

Vision for Implementation: Share your vision for the implementation of RERA with regard to the assigned subject over the next 10 years, highlighting the objectives and the role of various stakeholders.

ICAI’s Role: Offer suggestions on how ICAI and its members can make a significant difference in the full-scale implementation of RERA. Define your expectations from ICAI and its members.

Representation to Authorities: Outline the representation to be made to various authorities, RERA, and the government to bring your teams vision to fruition in the next 5 years.

Additional Inputs: Include any other pertinent information, feedback, or insights deemed relevant by your team.

Each paper will have reference specific sections, rules, circulars, notifications, or case laws upon which the presentation is based. The out come of this study will be shared with Union and State Governments, Authorities, various regulators and the stakeholders to implement the suggestions to make happen the vision of RERA leaders.

During this study course, the participants also reviewed and updated the 2nd Edition of Maharashtra RERA Law and Practice. More and more similar intensive study course need to be arranged to build the capacity of the members to practice in RERA. The ICAI also has started the 1st Batch of Certificate course on Real Estate Laws.

WIRC MAHARASHTRA RERA LAW & PRACTICE STUDY GROUP OF EXPERTS, REVIEWERS & CONTRIBUTORS Name

Name

CA. Ramesh S Prabhu (Editor)

CA. Vinay Thyagaraj (Co-Editor)

CA. Vijaykumar Ramnani

CA. Sunil Naik

CA. Aditya Zantye

CA. Abhinav Welekar

CA. Bharat Dhonde

CA. Yogesh Kumar Goyal

CA. Vaibhav Modi

CA. Lalit Ashok Pawar

Adv. (CA) Nipun Singhvi

CA. Mahadev Birla

CA. Pinky G Bhonsley

CA. Anand Jain

CA. Sarthak Bhansali

CA. Rahul Gupta

CA. Manan Doshi

CA. Karan Mehendiratta

CA. Bhavesh Nagda

CA. Agrawal Nitin Kumar

CA. Ashokkumar Manghnani

CA. Rashmi Lonikar

CA. Meenesh Shetty

CA. Arun Kumar Agarwal

CA. Prasanna Sudke

CA.Sachin Sharma

CA. Dipesh Patel

CA. Rachana Agrawal

CA.Parikshit Bhadade

CA. Lalitkumar Raithatha

CA. Dilip Kr Agarwal

CA. Mayur Agrawal

CA. Prasanna Shenoy

CA. Arup Dasgupta

CA. Shashank Jain

CA. Sudheer Mandava

CA. Chetan Joshi

CA.Ankita Agrawal

CA.Pulkit Mehta

CA. Nitya Prakash Lanjewar

CA. Gopal Lodha

CA. Adhish Agarwal

CA.Shyam Sunder Bajaj

CA. Gopal Malpani

CA. Kunal Mody

CA. Surabhi Dhonde

CA. Pranavkumar Limaja

CA. Shreyash Prabhu

I-37

I-38 WIRC MAHARASHTRA RERA LAW & PRACTICE STUDY GROUP OF EXPERTS Name

Name

Shri D.R. Hadadare

CA. Kaushik Sampat

Dr. CA. Rajkumar Adukia

CA. Rajesh Sanghavi

CA. Karthik S Iyer

CA. Sumit C Kapure

CA. Amit Mohare

Adv. Shirish Deshpande

CA. Vimal Punmiya

Adv. Vinod S Sampat

CA. Naresh Sheth

Adv. Dhiren Vinod Sampat

CA. Vishal Gala

Adv. Mithil Vinod Sampat

CA. Venugopal Gella

Adv. Suhail Ahmed

Dr. Anand Gupta

Shri Ramprasad Padhai

Dr. (Adv) Harshul Savla

Shri Rajendra Bhatta Bacha

Er. Tarun Motta

Shri. Vipul Shah

Adv. Naresh Pai

CA. Alok Agarwal

Adv. Kiran Saha

CA. Samir Sanghavi

Adv. Sanjay Lukka

CA. Juzar Meeyajiwala

CA. Bhavna Radheshwar

CA. Vinit V Deo

CA. Kiran Niyati

CA. CS. Ashish Ghiya

Shri Vishal Bamane

CA. Sanjay Ghia

CA. Lalit Rajput

Ar. Manoj Daisaria

Dr. Archana Sabnis

Er. Manoj Kumar Dubal

CS. Rajat Agarwal

Adv. Sachin Karia

CA. Venkatesh Padiyar

Shri Prasad Satyan

Shri Rajesh Mehtani

CA. Shailesh Ghedia

Smt. Sharmila Ranade

Mr. B.T. Srinivasan

CA. Vishnu Agrawal

Shri Sunit Gupta

CONTENTS

PAGE

PART 1 GENERAL - APPLICABLE TO ALL STAKEHOLDERS 1.01

Overview of RERA, 2016

3

1.02

Journey & Implementation of RERA & Important Circulars of MahaRERA from Inception till December, 2023

9

1.03

Objective and purpose of RERA

25

1.04

Real Estate Sector deficiencies addressed by RERA

31

1.05

The Authorities to Implement the Act

38

1.06

Powers and Functions of Real Estate Regulatory Authority

49

1.07

Powers and Functions of Adjudicating Officers

54

1.08

Central Advisory Council – Establishment and Functions

65

1.09

Real Estate Appellate Tribunal and its Functions and Powers

68

PART 2 PROMOTER - FROM THE PROMOTERS PERSPECTIVE 2.01

Promoter under RERA

85

2.02

Functions and duties of Promoter

96

2.03

Registration of Real Estate Project - Legal Framework

153

I-39

I-40

CONTENTS PAGE

PART 3

2.04

Documents Required and the Process of Registration

176

2.05

Operation of RERA Designated Bank Account

218

2.06

Financial Planning for Real Estate Projects

226

2.07

Quarterly Progress Report (QPR) to be Done by the Promoters

233

2.08

Procedure to Extend the Period of the Registration

254

2.09

Procedure for Amendment or Modification in the Sanctioned Plans

267

2.10

Transfer of Real Estate Project to Third Party

278

2.11

The Transfer of Title

295

2.12

Force Majeure and COVID Impact on Real Estate Sector

312

2.13

Advertising and Marketing Post RERA

319

2.14

Importance of end Date/Completion Date and Date of Possession under RERA

329

2.15

Change in process and procedure of Real Estate business post RERA

340

2.16

Car Parking Space & MahaRERA Circular

347

2.17

RERA Compliance report by Chartered Accountant

366

2.18

De-Registration of the Project

378

2.19

Gradation of Real Estate Projects

382

AGENT - FROM THE REAL ESTATE AGENT PERSPECTIVE 3.01

Registration of Estate Agents Legal Framework

391

3.02

Process to obtain registration for Real Estate Agent

404

3.03

Functions of the Real Estate Agent

406

3.04

Impact of RERA on Estate Agents

415

3.05

Changing Business Landscape for REALTORS post RERA

418

3.06

Training and Certification for Real Estate Agents

421

3.07

Self Regulatory organization for Real Estate Agents

427

3.08

Anti Money-Laundering, Countering the Financing of Terrorism and Combating Proliferation Financing Guidelines for Real Estate Agents, 2023.

429

CONTENTS

I-41 PAGE

PART 4

PART 5

PART 6

ALLOTTEES - FROM THE ALLOTTEES AND THE ASSOCIATION OF ALLOTTEES PERSPECTIVE 4.01

Revocation of Registration of the Project

455

4.02

Stalled Real Estate Projects and Revival

460

4.03

Alternative investment fund for Real Estate including SWAMIH FUNDS

485

4.04

Rights and Duties of Allottees

500

4.05

Association of Allottees

535

4.06

Remedies for Conveyance & Deemed Conveyance

555

4.07

Allottee due diligence before purchasing Property

570

PROFESSIONAL - FROM PROFESSIONAL PERSPECTIVE FOR CAs, ADVOCATES, ENGINEER, ARCHITECTS 5.01

Title Certificate

587

5.02

Allotment Letter, Agreement for Sale and Sale Deed

600

5.03

Role and Responsibilities of Architect under RERA

615

5.04

The Roles & Responsibilities of a CIVIL ENGINEER and issue of FORM 2 under RERA

632

5.05

Quality assurance and defect liability under RERA

638

5.06

Certificate in Form 3 by Chartered Accountant

647

5.07

Audit by Chartered Accountant under MahaRERA (Form No. 5)

707

5.08

Guidance note on Accounting for Real Estate Transactions (Revised 2012) and Revenue from contracts with customers (IND AS-115)

760

5.09

Key audit challenges - Real Estate Sector

791

5.10

Real Estate Collaborations & Significance of Corporate Due Diligence

796

REDRESSAL - REDRESSAL SYSTEM : COMPLAINT, APPEAL, SECOND APPEAL, CONCILIATION 6.01

Source (Complaints against unregistered projects for Registration)

805

6.02

Complaint filing and its Procedure

810

6.03

Process of an Inquiry by the Authority or Adjudication Officer

841

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CONTENTS PAGE

PART 7

PART 8

6.04

Appeals under RERA

873

6.05

Second Appeal before High Court

898

6.06

Execution of orders of MahaRERA and Adjudicating Officer

915

6.07

Execution of a decree under Code of Civil Procedure, 1908

942

6.08

Complaints by Association of Allottees

948

6.09

Offences & Penalties

970

6.10

MahaRERA Conciliation & Dispute Resolution Forum

994

6.11

MahaRERA Conciliation Forum Role Model of ADR in Real Estate Sector

1008

6.12

Establishing of a Home Buyer/Allottee Grievance Redressal Cell

1021

INCOME TAX, GST - TAXATION: INCOME TAX, GST AND STAMP DUTY AND REGISTRATION 7.01

Income Tax Applicable on Real Estate Transactions

1025

7.02

Overview of GST Implications of Real Estate Sector

1088

7.03

Stamp Duty and Registration

1135

ALLIED LAWS - OTHER ALLIED LAWS LIKE MRTP, DCPR, IBC, CONSUMER PROTECTION ETC. 8.01

Real Estate Laws of India

1157

8.02

Salient Features of Maharashtra Ownership Flats Act, 1963 (“MOFA”)

1166

8.03

Comparison between MOFA and RERA

1180

8.04

Overview of Maharashtra Apartment Ownership Act, 1970

1185

8.05

Development Control Regulations and MahaRERA

1191

8.06

Consumer Protection and RERA : Best Recourse to Allottees

1201

8.07

Draft Format/Specimen of Consumer Complaint

1228

8.08

Landmark Judgments of the Consumer Courts

1239

8.09

Insolvency Resolution Process in Real Estate

1265

8.10

Interplay of PMLA, BENAMI, FEMA with RERA

1285

CONTENTS

I-43 PAGE

PART 9

MISCELLANEOUS - TOPICS RELATED TO REAL ESTATE RULINGS & REDEVELOPMENT 9.01

Constitutional Validity of RERA

1307

9.02

Analysis of Judgments

1322

9.03

Redevelopment and RERA

1345

ALSO AVAILABLE BOOK ON UPDATED BARE PROVISIONS: ¾ Real Estate (Regulation & Development) Act, 2016 ¾ FAQs ¾ MahaRERA Rules, Regulations, Notifications, Orders & Circulars ¾ Maharashtra Ownership Flats Act, 1963, Maharashtra Apartments Ownership Act, 1970, Deemed Conveyance, Separate chapter on Co-op. Housing Societies, Stamp Duty Amnesty Scheme, 2023

CONTENTS 1

Frequently Asked Questions (FAQs) by Ministry of Housing & Urban Affairs.

2

Frequently Asked Questions (FAQs) by MahaRERA

3

Frequently Asked Questions (FAQs) by Contributors of Maharashtra RERA Law & Practice

4

Frequently Asked Questions (FAQs) based on the Rulings of Authorities, Appellate Tribunals, High Court and Supreme Court compiled by Contributors of Maharashtra RERA Law & Practice.

5

(i) Real Estate (Regulation and Development) Act, 2016 (ii) Notification of the Government of India (GOI) to commence certain provisions of the Act dated 26th April, 2016 (iii) Real Estate (Regulation and Development) Removal of Difficulties Order, 2016 of GOI Order dated 28th October, 2016 (iv) Notification of the GOI to commence remaining provisions of the Act dated 19th April, 2017 (v) Notification of Government of Maharashtra to establish Maharashtra Real Estate Regulatory Authority dated 8th March, 2017

6

(i) 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 (ii) Maharashtra Real Estate (Regulation and Development) (Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interests and Disclosures on Website) (Amendment) Rules, 2019

7

Maharashtra Real Estate Regulatory Authority, Chairperson, Members Officers and other Employees (Appointment and Service Conditions) Rules, 2017

8

Maharashtra Real Estate (Regulation and Development) (Recovery of Interest, Penalty, Compensation, Fine payable, Forms of Complaints and Appeal, etc.) Rules, 2017

9

Maharashtra Real Estate Appellate Tribunal (Members Officers and Employees) (Appointment and Service Conditions) Rules, 2017

10

Maharashtra Real Estate Regulatory Authority (Form of Annual Statement of Accounts and Annual Report) Rules, 2017

11

Maharashtra Real Estate Regulatory Authority (Recruitment and Conditions of Service of Employees) Regulations, 2017

12

Maharashtra Real Estate Regulatory Authority (General) Regulations, 2017

13

Maharashtra Real Estate Regulatory Authority (General) (Amendment) Regulations, 2019

14

(i) Maharashtra Real Estate Regulatory Authority (General) (Second Amendment) Regulations, 2019 (ii) Maharashtra Real Estate Regulatory Authority (General) (Amendment) Regulations, 2021

15

Constitution and Operations of Real Estate Regulatory Fund

16

MahaRERA Orders and Circulars (Selected and important)

17

Maharashtra Real Estate Appellate Tribunal Regulations, 2019 Notification

18

Circulars - Appellate Tribunal (Selected and important)

19

Maharashtra Ownership Flats Act, 1963

20

Maharashtra Ownership Rules, 1964

21

Maharashtra Ownership Apartment Act, 1970

22

Maharashtra Ownership Apartment Rules, 1972

23

Deemed Conveyance Circulars and Notification

24

Separate Chapter XIII-B Co-Operative Housing Societies of Maharashtra Co-Operative Societies Act, 1960

25

Model Bye Laws of Co-operative Housing Societies

26

Stamp Duty Amnesty Scheme 2023 Notification and Circulars.

5.02 C H A P T E R

ALLOTMENT LETTER, AGREEMENT FOR SALE AND SALE DEED 5.02.1 OVERVIEW 1. The promoters as per their policy execute various documents with allottees such as: (i) Standard forms : Application for Booking/Reservation form; (ii) Allotment letters on receipt of minimum amount; (iii) Memorandum of understanding; (iv) Agreement for sale; and (v) Register the sale deed or conveyance deed with allottee at the time of handing over the possession of the apartment upon receipt of full consideration; (vi) Finally executes and registers the sale deed or conveyance deed of common area such as land, building and common amenities in favour of association of allottees or society or company as the case may be; (vii) Thereafter, the property cards in urban area or the 7/12 extracts outside urban area will be updated and the new owners name will be recorded by the revenue department.

2. All the above documents are not having same legal implications.

3. Further an agreement for sale of an immovable property is not the same as a sale deed for the property.

4. This Chapter discusses the differences that an allottee and promoter should be aware of, from a legal standpoint.

5.02.2 SALES ARE FORMALISED IN A STAGE - WISE MANNER After the apartment is booked by signing the booking form by the allottees, the promoter on his letter head issues allotment letter to confirm the booking of the apartment to the allottee.

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Thereafter before receiving more than 10% of the consideration of the apartment, the first documents that is executed, to provide a proper legal status to an understanding between a promoter and an allottee is known as agreement for sale as per section 13 of RERA read with Rule 10 of MahaRERA Rules, 2017. This crucial legal document is also known as agreement for sale.

However, an agreement for sale should not be confused with a sale deed or the conveyance deed – while one is a deed another is an agreement and thus, different from each other. The similarities in the names, one tends to assume they mean the same thing. However, a sale deed is quite different from an agreement for sale.

5.02.3 KEY DIFFERENCES BETWEEN AGREEMENT FOR SALE AND SALE DEED Agreement for sale

Sale Deed

Agreement for Sale is a promise of a Sale deed is an actual transfer of propfuture transfer of property ownership. erty ownership.

Agreement for Sale specifies the terms and Sale deed includes information about conditions under which the property will both the parties (buyer & seller), their be transferred. ages, addresses and other details.

Agreement for Sale gives a right for the Sale deed gives the rights and interests purchaser to purchase the property in in the property to the new owner. question on the satisfaction of certain conditions.

Agreement for Sale precedes sale deed, Allottee has to pay stamp duty and signed and executed by the promoter and registration fee to execute a sale deed. allottee, by paying full stamp duty and registering the document.

Agreement for sale is under the Indian Contract Act, 1872, Maharashtra Ownership Flats Act, 1963 u/s 4 and RERA u/s 13.

Sale deed is under Transfer of Property Act, 1882.

Maharashtra Ownership Flats Act, 1963 u/s 11 and RERA u/s 17.

5.02.4 WHAT IS AN AGREEMENT FOR SALE? An agreement for sale, is an agreement to sell a property in future. This agreement specifies the terms and conditions, under which the property in question will be transferred. The Transfer of Property Act, 1882, which regulates the matters dealing with the sale and transfer of house property, defines the contract for sale or an agreement for sale as under: “A contract for the sale of immovable property, is a contract that a sale of such property shall take place on the terms settled between the parties” – Section 54. Section 54 further provides that “It does not, of itself, create any interest in or charge on such property.”

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From the above definition, it becomes amply clear that an agreement for sale contains a promise to transfer a property in question in future, on satisfaction of certain terms and conditions. So, this agreement itself does not create any rights or interest in the property, for the proposed buyer.

What the Agreement for sales creates, is a right for the purchaser to purchase the property in question on satisfaction of certain conditions. Likewise, the seller also gets the right to receive the consideration from the buyer on complying with his part of the terms and conditions.

In case of failure of the seller to sell or hand over possession of the property to the buyer, the buyer gets a right of specific performance, under the provisions of the Specific Relief Act, 1963. A similar right is available to the seller under the agreement, for seeking specific performance from the buyer.

Even though the signing of the agreement for sale does not mean the sale has been concluded, it is a crucial step in that direction. This is why buyers must be acutely aware of the terms and condition as mentioned in the agreement.

5.02.5 LEGAL PROVISIONS UNDER RERA (1) Section 2(c) of RERA defines Agreement for sale 2(c) “agreement for sale” means an agreement entered into between the promoter and the allottee

The term “agreement” shall have the same meaning as under the Indian Contract Act, 1872 and the term “sale” shall have the same meaning as under the Transfer of Property Act, 1882.

(2) Analysis of definition of agreement for sale Analysis of definition of ‘agreement for sale’. An agreement for sale constitutes the terms and conditions of sale of a property by the seller to the buyer.

These terms and conditions include the consideration amount at which it is to be sold and the future date of full payment. Being an important document in the sale transaction, it enables the process of sale to proceed/progress without any hurdles. All the terms and conditions included in the agreement for sale must be understood thoroughly by both the parties and obeyed throughout the sale process till the time the sale deed is made. Agreement for sale is the base document on which the conveyance deed is drafted. Conveyance deed is the document prepared at the time of full payment made by the buyer and when the actual transfer of the property takes place.

(3) Allotment letter held to be agreement for sale Maharashtra Real Estate Appellate Tribunal held that allotment letter is nothing but an agreement as per section 2(c) of RERA. In the case of Jyoti K. Narang v. CCI Projects Pvt. Ltd., it was inter alia held by the Appellate Tribunal on 20th March, 2019 that it is important to gather

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the nature of the transaction and not the nomenclature of the documents while determining whether the letter executed between the parties was in the nature of an allotment letter or an agreement. Even though the letter was styled as allotment letter, considering the details of sale and purchase of the flat between allottees and promoter along with condition of stipulated period of handing over possession and the manner of payment of price as per the Schedule, it was concluded that the promoter agreed to sell the said flat to the allottees and executed the transaction of sale which was evident from the contents of the allotment letter.

5.02.6 REGISTRATION OF THE AGREEMENT FOR SALE Section 13 of the RERA states that the promoter shall not accept any amount more than ten per cent of the sale price, under any law for the time being in force. This clarifies that the restriction under MOFA which provides a threshold of 20 per cent on the consideration is further reduced to 10 per cent under RERA. The provision under section 13 of RERA is reproduced hereunder: 13. No deposit or advance to be taken by promoter without first entering into agreement for sale (1) A promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force.

(2) The agreement for sale referred to in sub-section (1) shall be in such form as may be prescribed and shall specify the particulars of development of the project including the construction of building and apartments, along with specifications and internal development works and external development works, the dates and the manner by which payments towards the cost of the apartment, plot or building, as the case may be, are to be made by the allottees and the date on which the possession of the apartment, plot or building is to be handed over, the rates of interest payable by the promoter to the allottee and the allottee to the promoter in case of default, and such other particulars, as may be prescribed.

5.02.7 AGREEMENT FOR SALE PRESCRIBED BY MAHARERA RULES, 2017 Rule 10 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 has prescribed the model form of agreement as Annexure A as per the provisions of Section 13 of the Act. The Act provides that a specified form of agreement for sale between promoters and allottees may be prescribed. This will help in preventing

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inclusion of biased provisions in it and thereby protect the interest of the allottees. Allottees have also been granted the right to seek relief from unilateral termination of such agreements by promoters without cause.

The rule 10 of MahaRERA Rules, 2017 is reproduced hereunder: Rule 10. Agreement for Sale. – (1) For the purpose of sub-section (2) of section 13, the agreements for sale shall be in conformity with the provisions, rules and regulations made thereunder and shall be in accordance with the model form of agreement at Annexure ‘A’.

Nothing in this sub-rule shall be deemed to prevent the promoter to modify the model form of Agreement for Sale at Annexure ‘A’ .

Provided that such agreement is in conformity with the provisions of sub-section (2) of section 13 of the Act and the rules and regulations made thereunder.

(2) Any application letter, allotment letter or any other document signed by the allottee, in respect of the apartment, plot or building, prior to the execution and registration of the agreement for sale for such apartment, plot or building, as the case may be, shall not be construed to limit the rights and interests of the allottee under the agreement for sale under the Act or the rules or the regulations made thereunder.

Normally, promoters insert punitive clauses against allottees which penalises them heavily for any default while defaults by the promoter attracts negligible or no penalty.

Such penal clauses could well be a thing of the past and allottees can look forward to more balanced and rational agreements in future, now after coming into force the Real Estate (Regulation and Development) Act, 2016.

5.02.8 MAHARERA RULES, 2017 PRESCRIBE MODEL FORM FOR AGREEMENT FOR SALE Section 13 of the Act read with rule 10 provides for the model format of the agreement which provides for the various details in respect of the project of the promoter. The particulars of the development project have to inter alia include the following items: (i) The details of the construction of building and apartments; (ii) Specifications of the internal and external development works; (iii) The dates and manner for the payment of the purchaser price; (iv) Schedule for the completion of the project and the subsequent possession; (v) Rate of interest payable.

Rule 10 allows the promoter to modify the model agreement as long as it is in conformity with section 13 of the Act and the corresponding rule. Rule 10 provides that any other application letter, allotment letter or any other

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document signed otherwise between the promoter and the allottee, before the execution and registration of the agreement, shall not in any manner be construed to limit or waiver the rights and interests of the Allottee under the subsequent agreement for sale, under the Act. The model form of the agreement provided under Annexure A 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 states that clauses which are mandatory under the Act shall be retained in every individual agreement executed by the Promoter and the Allottee. The provisions which are contrary to the statutory conditions shall not be binding upon the parties.

Even though the promoter has been given flexibility to modify and alter the model agreement, such modifications or alterations shall not be inconsistent or contrary to the provisions of the Act or the rules and regulations made thereunder.

Except as stated under section 13 of the Act, the promoter has a flexibility in respect of the other provisions of the agreement. Therefore, clauses pertaining to the various other aspects of the Agreement, for example internal society rules can be decided by the promoter.

Despite the model agreement for sale prescribed in MahaRERA rules, promoters were insisting on one sided agreement clauses leading to litigation.

MahaRERA observed that during the course of hearing of the complaints that various issues of agreement were arising by way of dispute. Therefore, it was necessary to consider to modify the Agreement for Sale prescribed in Annexure A of the said Rules. In view of the above, the MahaRERA has constituted a committee to advise and to give recommendations vis-a-vis suggestion in the Draft Agreement for Sale and Draft for Allotment letter, vide order No. 17/2021 dated 14th June 2021, MahaRERA vide its order No. 38 dated 13-12-2022 made it mandatory to have following clauses in proforma agreement to sale and no deviation should be made. Explanation in section and rules is read as below: (a) Force majeure - Section 6 “Explanation. - For the purpose of this section, the expression “force majeure” shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project,”.

Rule 6 (a) “Upon the registration ... ... ... ... number in Form “C”. The period for which registration shall be valid shall exclude such period where actual work could not be carried by the promoter as per the sanctioned plan due to specific stay of injunction orders relating to the real estate project from any Court of law, or Tribunal, competent authority, statutory authority, high power committee, etc.”

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(b) Time period for the formation of association of allottees by whatever name called, not being in compliance with the proviso of Section (4) (e) of the Act read with rule 9 (1) of the Rules which proviso and Rule are as follows: Section 11(4)(e) “provided that in the absence of local laws, the association of allottees by whatever name called, shall be formed within a period of three months of the majority of allottees having booked their plot or apartment or building as the case may be, in the project;” Rule 9(7)(i) “Where a, Co-operative Housing Society the Promoter shall submit the application in that behalf to the Registrar for registration of a Co-operative Housing Society under the Maharashtra Cooperative Societies Act,1960 or a company or any other legal entity, within three months from the date or which fifty-one per cent of the total number of allottees in such a building or a wing have booked their apartment.

Rule 9(7)(ii) “Where a Promoter ... ... ... ...., then the Promoter shall submit an application to the Registrar for registration of the Cooperative Society or the company application to the Registrar for registration of the Co-operative society or the company to form and register an Apex Body in form of Federation or Holding entity consisting of all such entities in the layout formed as per clause (i) of sub-rule (1) of rule 9(1)(i) herein above. Such application shall be made within a period of three months from the date of the receipt of Occupation Certificate of the last of the building which was to be constructed in the layout. (c) Time period for execution of registered conveyance deed with the association of allottees by whatever name called, not being as per the mandate of section 17 of the Act read with rule 9(2) of the Rules, the said mandate reads as follows: Section 77 “Provided that in the absence of any local law conveyance deed in favour of the allottee or the association of the allottees or the competent authority, as the case may be, under this section shall be carried out by the promoter within three months from date of issue of occupancy certificate.”

Rule 9(2)(ii) “Period for Conveyance of title, by Promoter, to legal entity of allottees in case of single building project. The Promoter shall (subject to his right to dispose of the remaining apartments, if any) execute the conveyance of title within three months from the date of issue of occupancy certificate.”

Rule 9(2)(iii) “Period for conveyance of title, by Promoter, to organization of allottees in case of Layout:

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(a) In the case of a building or a wing of a building in a Layout, the Promoter shall (subject to his right to dispose of the remaining apartment, if any) execute the conveyance of the structure of that building or wing of that building (excluding basements and podiums) within one month from the date of issue of occupancy certificate. (b) In the case of a layout, the Promoter shall execute the conveyance of the entire undivided to inseparable land underneath all buildings jointly or otherwise within three months from the date of issue of occupancy certificate to the last of the building or wing in the layout.” (d) Defect Liability - Not mentioning of the defect liability Period or reducing the defect Liability period. The relevant provision of the Act i.e. Section 14(3) reads as follows: Section 14(3) “In case any structural defect or any other defect in workmanship, quality or provisions of services or any other obligations of the promoter as per the agreement for sale relating to such development is brought to the ,notice of the promoter within a period of five years by the allottee from the date of handing over possession,.. ... ... ... under the Act.” (e) Confirmation of final carpet area - “The Promoter shall confirm the final carpet area that has been allotted to the Allottee after the construction of the Building is complete and the occupancy certificate is granted by the competent authority, by furnishing details of the changes, if any, in the carpet area, subject to a variation cap of three per cent. The total price payable for the carpet area shall be recalculated upon confirmation by the Promoter. If there is any reduction in the carpet area within the defined limit then Promoter shall refund the excess money paid by Allottee within forty-five days with annual interest at the rate specified in the Rules, from the date when such an excess amount was paid by the Allottee. If there is any increase in the carpet area allotted to Allottee, the Promoter shall demand additional amount from the Allottee as per the next milestone of the Payment Plan. All these monetary adjustments shall be made at the same rate Per square meter as agreed in Clause 1(a) of this Agreement.” (f) Right of the promoter to charge interest to allottee - “Without prejudice to the right of promoter to charge interest in terms of sub-clause 4.1 above, on the Allottee committing default in payment on due date of any amount due and payable by the Allottee to the Promoter under this Agreement (including his/her proportionate share of taxes levied by concerned local authority and other outgoings) and on the allottee

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committing three defaults of payment of instalments, the Promoter shall at his own option may terminate this Agreement: Provided that, Promoter shall give notice of fifteen days in writing to the Allottee, by Registered Post AD at the address provided by the allottee and mail at the e-mail address provided by the Allottee, of his intention to terminate this Agreement and of the specific breach or breaches of terms and conditions in respect of which it is intended to terminate the Agreement. If the Allottee fails to rectify the breach or breaches mentioned by the Promoter within the period of notice then at the end of such notice period, promoter shall be entitled to terminate this Agreement. Provided, further that upon termination of this Agreement as aforesaid, the Promoter shall refund to the Allottee (subject to adjustment and recovery of any agreed liquidated damages or any other amount which may be payable to Promoter) within a period of thirty days of the termination, the instalments of sale consideration of the Apartment which may till then have been paid by the Allottee to the Promoter.”

5.02.9 WHAT DOES RERA 2016 SAY ABOUT AGREEMENT FOR SALE? Section 13(1) of RERA Act, 2016 states that “A promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot or building as the case may be, as an advance payment or an application fee from a person without first entering into written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force”.

From this we can infer that this particular provision emphasizes the fact that there are two fundamental duties of a promoter:

First, the promoter, after taking the advance amount from the prospective buyer, has to execute the agreement for sale.

Secondly, the agreement for Sale should be registered before appropriate authorities.

5.02.10 WHICH ENACTMENT SHALL PREVAIL FOR THE PURPOSE OF AGREEMENT FOR SALE? In order to answer this question we need to understand that real estate transactions in India are governed by the following enactments:

Transfer of Property Act, 1882 (TPA);

Indian Contract Act, 1872 (Contract Act);

Real Estate (Regulation and Development) Act, 2016 (RERA);

Registration Act, 1908 (Registration Act);

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Indian Stamp Act, 1899 (Stamp Act); and

Indian Easements Act, 1882 (Easements Act).

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But when we analyse the section 13(1) of RERA Act, 2016 specifies that an agreement for Sale must be registered as per the law for time being in force this means that an agreement for Sale is registered as per the provisions of the Registration Act, 1908.

However, section 88 of the RERA Act, 2016 states that “the act shall be in addition and not in derogation to the law for the time being in force”. This means that the RERA Act, 2016 has to be read with the Registration Act, 1908. On the other hand, Section 89 of RERA Act, 2016 states that “The provisions of this act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force”. This means the RERA Act, 2016 will have an overriding effect.

Applying the provisions of section 88 of the RERA Act, 2016, when we analyse the provisions of both the enactment, we can observe that section 17(2)(v) of Registration Act, 1908 negates the RERA Act, 2016. Therefore as per section 89 of the RERA Act, 2016, the provisions of Registration Act, 1908 will not be taken into consideration for the purposes of registration of agreement for Sale.

Hence we can say that the provisions of the RERA Act, 2016 shall prevail over Registration Act, 2016 only with respect to the agreement for Sale.

Although, the RERA Act, 2016 provides for a non obstante clause in section 89 and as a result of the same RERA becomes applicable over Registration Act, 1908. On the other hand, it also gives rise to certain other question i.e. whether an agreement for Sale will create a right, title or interest over the property?

This question arises because registration of documents is done usually to ensure clear right and title over the property to the purchaser. An agreement for Sale as such does not provide a clear title to the property. The Supreme Court has, in the case of Durgawati Devi v. Union of India (Order dated October 4, 2019 filed under SLP( C) 3479/2016), held that the execution of agreement for sale does not transfer ownership/title of the property and the ownership/title is transferred only by way of sale deed or conveyance deed.

If the agreement of sale does not create then it gives rise to another question as to whether the remedy can be exercised by the purchaser on breach of the agreement of sale? This has been answered under section 18 of the RERA which states that the promoter should compensate the purchaser if he was not able to complete the project and hand over the possession of the property within the time frame as specified in the agreement for Sale or agreement of sale. If the promoter fails to do so then he can file a complaint before RERA Authority and claim compensation. In case he is aggrieved by the

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order of Authority, then he can file an appeal in the Real Estate Regulatory Appellate Tribunal under section 44 of the RERA Act, 2016.

Therefore it is appropriate to conclude that the RERA Act, 2016 overrule Registration Act for the purpose of agreement for sale because the agreement for sale does not provide a clear title, However, it can be enforced in the court of law as per the provisions of the RERA Act, 2016.

5.02.11 MAHARERA RULINGS (a) MahaRERA directed the promoter to register the agreement for sale: In the case of Ashutosh Shah v. Proviso Builders & Developers it was inter alia held by the Authority on 10th October 2019 that the respondent had accepted more than 10% of the amount from the complainant towards the cost of the flat. And therefore the respondent was directed to execute and registrar the agreement for sale with the complaint in accordance with the provisions of section 13 of the Act. (b) Importance of agreement for sale Signing an agreement for sale becomes important in light of several factors.

First, this is a legal proof of the buyer and seller entering into an agreement, based on which the future course of action would be decided, in case of a dispute. Also, if you are applying for a home loan, the bank would not accept your application till you sign an agreement for sale.

Recall here that both parties will have to abide by the conditions laid in the agreement to sale. Any party flouting any of the terms, as prescribed in the agreement, might be dragged to court, if the other party so wishes.

All parties concerned should also be mindful of the fact that this document can be cited as a legal proof in the court of the law and all those who have agreed to abide by the terms are obliged to do so legally.

Agreement for sale overrides the allotment letter and any other earlier documents exchanged between promoter and allottee.

5.02.12 WHAT IS A SALE DEED? A sale deed is a legal document that proves that the seller has transferred the absolute ownership of the property to the purchaser. Through this document, the rights and interests in property are acquired by the new owner.

A sale deed usually consists of the following information— 1. Details of the buyers and sellers (name, age and addresses).

2. Property description (total area, details of construction, the exact address and surroundings).

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3. Sale amount including advance payment paid as well as the mode of payment.

4. Time frame when the property title will be actually passed to the buyer.

5. Actual date of delivery of possession.

6. Indemnity clause (The seller promises to pay the buyer for any damages in case of disputes with regard to the ownership, resulting in monetary losses to the buyer).

5.02.13 IS SALE DEED THE SAME AS CONVEYANCE DEED? Even though one often gets to hear the two terms being used interchangeably, a sale deed and a conveyance deed mean different things. The sale deed is basically a type of conveyance deed, considering the latter is rather a wide term, which also covers gift deed, exchange deed, mortgage deed, lease deed, etc. Basically, all these documents are various types of conveyance deeds.

Each type of legal document that transfers the ownership of property from one person to another is a conveyance deal. In that sense, a sale deed is a conveyance deed too, insofar as property is concerned.

Paperwork for current practices.

There in fact are two documents as under: (a) Agreement for sale, stamp duty paid and registered. (b) Sale deed for the apartment on Rs. 100 stamp paper and registered.

Sale deed is executed only after 100% payment is effected by the buyer and simultaneous possession of the apartment is received.

5.02.14 SALE DEED AT THE TIME OF PROPERTY REGISTRATION At the time of sale deed/conveyance deed registration, allottees also have to present, along with other key documents copies, the agreement for Sale (first registered document). Doing so is important, for the authorities to ensure that the transaction is being concluded, based on the agreement for sale made between the promoter and allottee earlier.

5.02.15 SUPREME COURT RULING ON SALE DEED AND AGREEMENT FOR SALE The sales agreement may or may not result into an actual sale of the property in question. Some of the stamp duty laws, like the Maharashtra Stamp Act, deem an agreement for sale of an immovable property, on the same footing as a proper deed of conveyance and therefore, are subject to the same stamp duty as is applicable on the proper deed of conveyance or sale deed of an immovable property. Due to such deeming provisions, requiring payment

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of stamp duty on an agreement for sale, people mistakenly perceive an agreement for sale, as a proper sale deed.

The Supreme Court of India in 2012, in the case of Suraj Lamp & Industries (P.) Ltd. (2) v. State of Haryana, while dealing with the validity of sales of immovable properties made through power of attorney, has held as under: “Immovable property can be transferred/conveyed only by a deed of conveyance (sale deed), duly stamped and registered as required by law.

We, therefore, reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance.”

“Any contract of sale (agreement for Sale), which is not a registered deed of conveyance (deed of sale), would fall short of the requirements of sections 54 and 55 of the Transfer of Property Act and will not confer any title, nor transfer any interest in an immovable property (except to the limited right granted under section 53A of the Transfer of Property Act).”

According to the Transfer of Property Act, an agreement for sale, whether with possession or without possession, is not a conveyance. Section 54 of the Transfer of Property Act enacts that the sale of an immovable property can be made, only by a registered instrument and an agreement for sale does not create any interest or charge on its subject matter.

The Supreme Court further reiterated the importance of sale agreement between the builder and buyer, as it recently ruled that the period of allotment of a housing unit to a home buyer has to be considered from the date of the builder-buyer agreement and not from the date of registration of the project under the Real Estate (Regulation and Development) Act, 2016.

The court further ordered the RERA authorities to order payment of compensation from the builder as per the sale agreement, the sanctity of which has been upheld through this order.

5.02.16 CONSEQUENCE OF FAILURE TO EXECUTE A SALE DEED As per the Indian Registration Act, 1908, any agreement for transfer of any interest in an immovable property of value more than one hundred rupees, is required to be registered. So, if you have purchased any property under any agreement for sale, without it being followed by a proper sale deed, you do not get any right or interest in the property purported to be transferred under the agreement of sale.

This absolute rule is subject to the exception provided under section 53A of the Transfer of Property Act. Section 53A provides that where the buyer has obtained possession of the property that is subject matter of the transfer, while fully complying with his part of the obligation under the agreement, the seller shall not be entitled to disturb the possession so granted to the buyer. It may be noted that section 53A provides a shield to the proposed

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transferee against the transferor and debars the transferor from disturbing possession of the transferee, but it does not cure the title of the buyer to the property. The ownership of the property still remains with the seller.

So, in the cases where you have purchased any property under a sales agreement and got possession, the title of the property still remains with the developer, unless a sale deed subsequently has been executed and registered under the Indian Registration Act. Thus, it becomes clear that a title in an immovable property can only be transferred by a sale deed. In the absence of a duly stamped and registered sale deed, no right, title or interest in an immovable property, accrue to the buyer of the property.

5.02.17 RERA PROVIDES FOR CONVEYANCE DEED Section 17 of RERA, provides that the promoter shall execute and register a conveyance deed of the apartment in favour of the allottees and the common area in the name of the association of allottees within 3 months of obtaining the occupation certificate or the completion certificate as the case may be.

A detailed provisions and the procedure involved in execution and registration of conveyance deed is discussed in a separate chapter in this manual.

5.02.18 FAQs Q1. What is agreement for sale?

Ans.: An agreement for sale, is an agreement to sell a property in future. This agreement specifies the terms and conditions, under which the property in question will be transferred.

Q2. What is sale deed?

Ans.: The sale deed is the main legal document by which a seller transfers his property right to the purchaser, who then acquires absolute ownership of the property.

Q3. What is the difference between agreement for sale and sale deed?

Ans.: An agreement for sale is a promise in future, that the property will be transferred to the rightful owner while sale deed is the actual transfer of property ownership to the buyer.

Q4. What documents are to be executed and in what sequence to ensure the promoter discharges his obligations under RERA. Ans.: Below documentation to be executed in the following sequence: (1) Allotment letter on receipt of booking amount not exceeding 10% of consideration amount.

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PART 5 : PROFESSIONAL PERSPECTIVE FOR CAs, ADVOCATES, ENGINEER

(2) Registering the Agreement for Sale of the apartment, after payment of applicable stamp duty, if apartment booked ‘under construction’ stage to receive more than 10% consideration amount: (a) Sale deed for the apartment will be executed and registered on a Rs. 100 stamp paper between the promoter and allottee after receipt of Occupation Certificate from the competent authority.

This represents conveyance deed of the apartment.

(3) Sale deed may be directly entered into, if the allottee is effecting full payment of consideration amount after OC has been received, and stamp duty is paid and document duly registered. In case the allottee is availing loan against mortgage to purchase the apartment, then Agreement for sale, duly registered after payment of stamp duty, will be executed first and after full payment is effected, Sale deed will be executed.

(4) Conveyance deed of common areas to be executed in favour of the legal entity.

(5) Property card updated by revenue authorities after the sale/ conveyance deed.

Thus RERA ensures proper and complete documentation upto conveyance of the flats as well as the common areas of the property.

Maharashtra RERA Law & Practice AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO NO. OF PAGES BINDING TYPE

: : : : : : :

RAMESH S. PRABHU, VINAY THYAGARAJ TAXMANN DECEMBER 2023 2ND EDITION 9789357785327 1436 PAPERBACK

Rs. 3495 | USD 84

Description This book provides an exhaustive analysis of the Real Estate (Regulation and Development) Act (RERA), 2016, discussing its multifaceted impact on the real estate sector. It thoroughly examines RERA’s legal, professional, and practical dimensions and associated regulations, catering to various stakeholders. Organised into multiple sections, each part of the book focuses on distinct elements and viewpoints relevant to real estate regulation, ensuring a comprehensive understanding.

This book incorporates the perspectives of the following stakeholders: u

General Section (Applicable to All Stakeholders)

u

Promoters

u

Real Estate Agents

u

Allottees and Association of Allottees

u

Professional Perspective including CAs, Advocates, Engineers, Architects

The Present Publication is the 2nd Edition, authored by the study group of industry experts & representatives from all stakeholders. It is edited by CA. Ramesh S. Prabhu & co-edited by CA. Vinay Thyagaraj, with the following noteworthy features: u

[Content and Structure of the Manual] The manual covers various practice areas like registration, certification, and litigation, catering to different stakeholders. It includes legal provisions, SOPs, FAQs, and judicial rulings

u

[Inclusion of Peripheral Subjects] Beyond RERA provisions, the manual also addresses related areas like 

Income Tax



GST



Stamp Duty



Registration



Insolvency and Bankruptcy



Other Relevant Laws

u

[Practice Manual for Practitioners and Professionals] The manual serves as a guide for new entrants and a reference for seasoned real estate practitioners, covering legal aspects and including various formats and drafts

u

[Limitations and Challenges] The manual acknowledges the limitations in applying a uniform approach to practice and non-practice-oriented topics, aiming to elevate the standards of beginners and intermediate practitioners

u

[Professional Application and Compliance] It emphasises the need for Chartered Accountants and professionals to apply their knowledge creatively while adhering to RERA’s objectives and client needs

u

[Dynamic Nature of RERA and Legal Changes] The manual incorporates the evolving nature of RERA, legal pronouncements, and building regulations

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