Rights of an allottee in a real estate project

Introduction

The Real Estate (Regulation and Development) Act, 2016 (the RERA Act, 2016) was enacted with the aim and objective to establish the Real Estate Regulatory Authority for regulation and promotion of real estate sector and to ensure sale of plot, apartments of buildings, as the case may be or sale of real estate project, in an efficient and transparent manner and to protect the interests of the consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute resolution, amongst other objectives. The act has provided for the obligations and compliances to be fulfilled by the promoter of a real estate project so that greater accountability towards the consumers, reduction in fraud and timely possession of the allotted apartment or plot could be established.?Here, we will deal with the rights of the allottees of the real estate project enshrined under RERA Act, 2016.

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What are rights related to having information regarding the real estate project?

The primary thing a prospective buyer in a real estate project does is to find out the basic information regarding the project so that he can make the best possible decision for investing his hard-earned money in a real estate project. We all know that for any kind of decision making the primary thing which is required is data, i.e., the basic information regarding the project in which the buyer is planning to invest. The RERA Act, 2016 has provided for the provision for the mandatory registration of the project before the respective Real Estate Regulatory Authority. Section 3(1) of the RERA Act, 2016 read as “No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act……”. Therefore, all the basic information related to the registered real estate project are available with the respective Real Estate Regulatory Authority which is provided to the general public on the website of the Authority.

Also, Section 11(1) of the RERA Act, 2016 mandates the promoter that upon receiving his Login Id and password after registration, the promoter shall create his web page on the website of the Authority and enter all details of the proposed project, in all the fields as provided, for public viewing, including-

(a)???Details of registration granted by the Authority;

(b)??Quarterly up-to-date the list of number and types of apartments or plots, as the case may be, booked;

(c)???Quarterly up-to-date the list of number of garages booked;

(d)??Quarterly up-to-date the list of approvals taken and the approvals which are pending subsequent to commencement certificate;

(e)???Quarterly up-to-date status of the project; and

(f)???Such other information and documents as may be specified by the regulations made by the Authority.

Section 11(2) of the RERA Act, 2016 mandates that “The advertisement or prospectus issued or published by the promoter shall mention prominently the website address of the Authority, wherein all details of the registered project have been entered and include the registration number obtained from the Authority and such other matters incidental thereto.” All the information pertaining to the real estate project is furnished to the Authority which information is made available to the general public for viewing by the Authority.

Therefore, it is clear that the prospective buyer in a real estate project may obtain necessary details about the real estate project and the promoter after visiting on the website of the respective Real Estate Authority. Also, one can get the RERA registration number of the project from the brochure / prospectus / website of the concerned project and the buyer can cross check and verify the details of the project from the website of the Real Estate Regulatory Authority.

For any details regarding the registered projects in UPRERA, please click here.

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What are the rights of an allottee regarding perusal of the necessary documents such as maps, plans, etc. of the real estate project?

The RERA Act, 2016 was enacted with aim and objective of bringing transparency in the real estate sector by putting positive obligations in the manner of compliances for a real estate promoter. This has brought greater accountability of the promoters towards its customers which has significantly reduced the number of frauds and misinformation being spread regarding the project. The allottee in a real estate project has the right to peruse the map of the project as sanctioned from the Competent Authority in which jurisdiction the project lies. For that, it is much necessary that one must know about what is a sanctioned plan.

As per Section 2(zq) of the RERA Act, 2016: “sanctioned plan” means the site plan, building plan, service plan, parking and circulation plan, landscape plan, layout plan, zoning plan and such other plan and includes structural designs, if applicable, permissions such as environment permission and such other permissions, which are approved by the competent authority prior to the start of the real estate project.”

Section 11 (3) of the RERA Act, 2016 puts an obligation on the promoter at the time of booking and issue of allotment letter who shall be responsible to make available to the allottee, the following information –

(a)???Sanctioned plans, layout plans, along with specifications, approved by the competent authority, by display at the sight or such other place as may be specified by the regulations made by the Authority.

(b)??The stage wise time schedule of completion of the project, including the provisions for civic infrastructure like water, sanitation and electricity.

Section 19(1) of the RERA Act, 2016 mandates that the allotee shall be entitled to obtain the information relating to sanctioned plans layout plans along with the specifications, approved by the competent authority and such other information as provided under the RERA Act, 2016 or the rules and regulations made or the agreement of sale signed with the promoter and the allottee.

The abovementioned information regarding approved sanctioned plan of the project is also made available to the public on the website of the respective Real Estate Regulatory Authority. More so, the approved sanctioned plan of the project is also available at the Competent Authority which can be sought from them. A person desirous of getting those details from the Competent Authority can file an RTI application before the Competent Authority requesting the approved sanctioned map of the project.

The allottee shall be entitled to have the necessary documents and plans including that of common areas, after handing over the physical possession of the apartment, plot or building, as the case may be, by the promoter.[1]

Hon’ble Supreme Court in Ferani Hotels Private Limited vs The State Information Commissioner, Greater Mumbai & Others[2] observed that: “…If we put this in the correct perspective, it means that the owner of the property, who has given authority to a developer under an agreement to develop the property and obtain sanctions, is precluded from obtaining any information about the sanctions, because ultimately he would be entitled to only a percentage of the monetary share of sale proceeds of what is constructed on the premises. Such a proposition is only stated to be rejected, and in a sense seeks to put the developer and holder of the Power of Attorney on a pedestal. This is, of course, de hors any private lis pending between the parties…

…we would like to say that keeping in mind the provisions of RERA and their objective, the developer should mandatorily display at the site the sanction plan. The provision of sub-section (3) of Section 11 of the RERA require the sanction plan/layout plans along with specifications, approved by the competent authority, to be displayed at the site or such other places, as may be specified by the Regulations made by the Authority. In our view, keeping in mind the ground reality of rampant violations and the consequences thereof, it is advisable to issue directions for display of such sanction plan/layout plans at the site, apart from any other manner provided by the Regulations made by the Authority. This aspect should be given appropriate publicity as part of enforcement of RERA…”

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What are the rights of an allottee regarding the knowledge of the stage wise development of a real estate project / stage wise completion schedule?

It is natural that any person who has made an investment of his hard-earned money and lifelong savings in a real estate project shall have the right to know about the construction status and the developments in the real estate project he has invested into. Also, it is very much necessary for the buyer to know the current status of construction if money has to be paid as per the construction linked plan as agreed between the buyer and the builder. This has been taken care of by the RERA Act, 2016 at the very beginning. As soon as the promoter has registered his project before the respective Real Estate Regulatory Authority and obtaining the login Id and password, the promoter is required to create his webpage on the web portal of the Authority. The said web page shall include the details of the registration as granted by the Authority; quarterly up-to-date the list of number and types of apartments or plots, as the case may be, booked; quarterly up-to-date the list of number of garages booked; quarterly up-to-date the list of approvals which are pending subsequent to commencement certificate; quarterly up-to-date status of the project; and such other information and documents as may be specified by the regulations made by the Authority.[3]

The promoter at the time of the booking and issue of allotment letter shall be responsible to make available to the allotee the stage wise time schedule of completion of the project, including the provision for civic infrastructure like water, sanitation and electricity.[4]

The above-mentioned obligation of the promoter is also reaffirmed as a right available to the allottee under Section 19(2) of the RERA Act, 2016 which confirms that the allottee shall be entitled to know stage wise time schedule of completion of the project, including the provisions for the water, sanitation, electricity and other amenities and services as agreed to between the promoter and the allottee in accordance with the terms and conditions of the agreement of sale.

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What are the rights of an allottee related to the title and physical possession of the allotted flat?

The allottee in a real estate project has the right to get the registered conveyance deed executed in his favour along with the undivided proportionate title in the common areas of the project. The allottee has the right to take the physical possession of the booked apartment / plot as per the agreement of sale. The promoter shall execute a registered conveyance deed in favour of the allottee along with the undivided proportionate title in the common areas to the association of the allottees or the competent authority, as the case may be, and hand over the physical possession of the plot, apartment of building, as the case may be, to the allottees and the common areas to the association of the allottees or the competent authority, as the case may be, in a real estate project, and the other title documents pertaining thereto within specified period as per sanctioned plans as provided under the local laws of the state. If there is not 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, shall be carried out by the promoter within three months from date of issue of occupancy certificate.[5]

After obtaining the occupancy certificate and handing over physical possession to the allottees, it shall be the responsibility of the promoter to handover the necessary documents and plans, including common areas, to the association of the allottees or the competent authority, as the case may be, as per the local laws. If there is not any local law, the promoter shall handover the necessary documents and plans, including common areas, the association of the allottees or the competent authority, as the case may be, within thirty days after obtaining the occupancy certificate.[6]

Section 19(11) of the RERA Act, 2016 puts the above-mentioned duty of the promoter as a positive obligation of compliance upon the allottee to participate towards registration of the conveyance deed of the allotted apartment, plot or building as previously provided under Section 17(1) of the Act.

More so, the allottee has the right to receive compensation from the promoter in case any loss is caused to the allottee due to the defective title of the land in which the project is been developed or has been developed. Such claim of compensation is not barred by limitation provided under any law for time being in force.[7]

The allottee shall be entitled to claim the possession of the apartment, plot or building, as the case may be, and the association of the allottee shall be entitled to claim the possession of common areas as per the declaration furnished by the promoter in relevant provisions of RERA Act, 2016.[8]

Every allottee shall take physical possession of the apartment, plot or building, as the case may be, within a period of two months of the occupancy certificate issued for the said apartment, plot or building.[9]

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What are the rights related to refund and/or compensation from builder?

It has been observed that the allottee of a real estate project suffers irreparable losses and damages due to the non-delivery legal possession of the allotted flat and also because of the promoter fails to discharge any of the obligations which has been imposed on him. Section 18 of the RERA Act, 2016 provides for the return of the amount deposited by the allottee and compensation.

If the promoter fails to complete or is unable to give possession of an apartment, plot or building, in accordance with the terms of the agreement for sale or duly completed by the date specified in the agreement for sale or due to discontinuance of his business as a developer on account of suspension or revocation of the registration or for any other reason, he shall be liable on demand to the allottees, to return the amount received by him in respect of such apartment, plot, building. If in the case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, the promoter shall return the amount received by him in respect of that apartment, plot, building, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under RERA Act, 2016.[10]

If an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.

More so, the allottee has the right to receive compensation if any loss is caused to him due to defective title of the land, on which the project is being developed or has been developed. Such claim of compensation shall not be barred by limitation provided under any law for the time being in force.[11]

In addition to the abovementioned remedies to the allottees, if the promoter fails to discharge any other obligations imposed on him under RERA Act, 2016 or the rules or regulations made thereunder or in accordance with the terms and conditions of the agreement for sale, he shall be liable to pay such compensation to the allottees, in the manner as provided under the RERA Act, 2016.[12]

The Hon’ble Supreme Court of India in Kolkata West International City vs Devasis Rudra[13] held that: “…It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund…”

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What are the rights of an allottee if there are structural defects in the building?

The RERA Act, 2016 mandates the promoter to make the construction work strictly according to the approved sanctioned map, layout map and specifications as approved by the Competent Authority. The promoter cannot change the structure, or make construction other than what has been approved by the competent authority unilaterally. This has been covered under Section 14 of the RERA Act, 2016 wherein if any other alterations or additions in the sanctioned plans, layout plans and specifications of the buildings or the common areas within the project has to be made by the promoter it is mandatory that such happens only after the previous written consent of at least two-third of the allottees, other than the promoter, who have agreed to take apartments in such building.

Section 14(3) of the RERA Act, 2016 protects the right of the allottee of the real estate project in case of structural defects in the building. It says that in case any defects or any other defect in workmanship, quality or provision 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, it shall be the duty of the promoter to rectify such defects without further charge, within thirty days, and in the event of promoter’s failure of rectify such defects within such time, the aggrieved allottees shall be entitled to receive appropriate compensation.

The abovementioned responsibility of the promoter, with respect to structural defects or any other defect for five years shall continue even after the conveyance deed of all the apartments, plots or buildings, as the case may be, to the allottees are executed.[14]

[1] Section 11(5) of the Real Estate (Regulation and Development) Act, 2016

[2] CIVIL APPEAL Nos.9064-9065 of 2018.

[3] Section 11(1) of the Real Estate (Regulation and Development) Act, 2016

[4] Section 11(3)(b) of the Real Estate (Regulation and Development) Act, 2016

[5] Section 17(1) of the Real Estate (Regulation and Development) Act, 2016

[6] Section 17(2) of the Real Estate (Regulation and Development) Act, 2016

[7] Section 18(2) of the Real Estate (Regulation and Development) Act, 2016

[8] Section 19(3) of the Real Estate (Regulation and Development) Act, 2016

[9] Section 19(10) of the Real Estate (Regulation and Development) Act, 2016

[10] Section 18(1) of the Real Estate (Regulation and Development) Act, 2016

[11] Section 18(2) of the Real Estate (Regulation and Development) Act, 2016

[12] Section 18(3) of the Real Estate (Regulation and Development) Act, 2016

[13] Civil Appeal No. 3182 of 2019

[14] Section 11(4)(a) of the RERA Act, 2016.