Customer Queries answered by RERA Professionals

 

                                    Customer Queries Answered by RERA Professionals 

 Question 1 - If Closure/Completion under K RERA is already filed in July 2019, do we need to file again with a new module now?

Answer - K RERA has published the list of projects under Services, Applications Applied for completion. As of now there is no specific circular or communication from Karnataka RERA Authorities on submission of additional documents, details, professional certificates stating 100 % completion, Affidavits etc. In case of any specific or general communication to upload the details in the New module, then the project promoters shall update the same.

 

Question 2 - We have filed quarterly updates after filing all quarters and summaries.  Door number was issued by the local authority.  Can we consider it as a completion receipt since our project is fully completed but yet to be occupied? and as per our local authority (panchayath) we have enough clearance for registration of allottees which is door number, RR number, fire clearances. and all required other NOC?

Answer - Sec 11(4)(b) of the RERA Act mandates - obtaining Completion/Occupancy Certificate is mandatory along with completion of all development works.

Extract of the RERA Act is as follows - Sec 11(4)(b) - be responsible to obtain the completion certificate or the occupancy certificate, or both, as applicable, from the relevant competent authority as per local laws or other laws for the time being in force and to make it available to the allottees individually or to the association of allottees, as the case may be.

 

Question 3 - Is it possible to get a second extension?

Answer - Yes, possible. However, one should understand with respect to the project requirement after understanding the scheme of development of the Real Estate Project. The second-year extension may require additional information, documentation, consent allottees etc.

Sec 6 of the RERA Act states - The registration granted under section 5 may be extended by the Authority on an application made by the promoter due to force majeure, in such form and on payment of such fee as may be specified by regulations made by the Authority.

Provided that the Authority may in reasonable circumstances, without default on the part of the promoter, based on the facts of each case, and for reasons to be recorded in writing, extend the registration granted to a project for such time as it considers necessary, which shall, in aggregate, not exceed a period of one year.

 

Question 4 – Our project is physically completed and OC obtained. Association is also formed.  All approvals are obtained.  But while filing quarterly updates, we couldn’t reach 100% complete.  Now is it necessary that we file for extension again just so that we can file 100 percent in the quarterly updates & get the summary.

Answer - Sec 11 (1) of the RERA Act and Rule 15 (1) (D) mandates that the project promoters shall file the quarterly updates till completion of all development works in the project and to obtain necessary approvals, permissions, NOC’s in relation to the real estate project. In your query, you did mention that you could not achieve 100 % in the quarterly updates, hence you need the project Extension in accordance with sec 6 of the RERA Act.

As mentioned, unless 100 % is mentioned in Quarterly Updates, you cannot file summary reports and file completion.

 

Question 5 - How the association is formed? Can we mention UDS in the ATS? It makes builder life easy.

Answer – Yes, at present you can mention UDS in ATS, however reserving liberty to call upon Allottee to convey the same to the Association of Allottees to make sure you are able to comply with Section 17 of RERA Act.

Section 17 of the RERA Act - Transfer of title

(1) The promoter shall execute a registered conveyance deed in favor 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

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.

(2) After obtaining the occupancy certificate and handing over physical possession to the allottees in terms of sub-section (1), it shall be the responsibility of the promoter to hand- over 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

Provided that, in the absence of 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.

 

Question 6 – How many days required for RERA Registration Number for the project?

Answer – Once submitted, application along with prescribed fees, the Authority verify and issue the registration certificates within 30 days from the date of application in accordance with Sec 5 of the Act.

 

Question 7 - I have not applied for Registration, what are the consequences and precautions till I apply for registration?

Answer – Consequences of not registering the project under RERA–

1) Penalty as per Section 59 (1) & (2) of the Real Estate (Regulation and Development) Act, 2016 applicable

 

a.            Pulldown all your advertisements / Hoardings

b.            Temporarily stop marketing through website

c.             Shall not advertise in any media – newspaper, TV, FM, SMS, Mail etc

d.            Shall not sell any project to customers

e.            Shall not collect money from Allottees

2) Effectively promoter can carry out only construction / development activities related to project.

 

Question 8 - When will I get Login and password for RERA Website to upload the project details?

Answer - Once Registration is complete and approved by Real Estate Regulatory Authority, Login and Password will be provided. Information, documents, details shall be filled and uploaded as per Rule 15 to Karnataka RERD Rules.

 

Question 9 - Can I use the Marketing materials printed earlier?

Answer – Yes, you can use as long as it complies y with Provisions of RERD Act, all such marketing materials should have the RERA Registration number. Marketing Material includes News Paper Advertisement, Public Hoarding, Websites, Classifieds, Brochures, SMS, pamphlets etc.

 

Question 10 - Mention of registration number in project / company Website is mandatory?

Answer - Yes, it is mandatory to mention the RERA registration number on each project/website. However, till you receive the RERA Registration Number, start displaying the RERA Application number with a note there on.

 

Question 11 - Can I allow my Agent to market my Real Estate Project?

Answer - Ask your Real Estate Agent to provide the RERA Agent Registration Number, You check online at rera.karnataka.gov.in before you allow him to market the project.

 

Question 12 - What are the consequences of Real Estate Agent non registration?

Answer - Agent without registration cannot facilitate the sale or purchase of any real estate project.

If any real estate agent fails to comply with or contravenes the provisions of section 9 (registration) or section 10 (functions), he shall be liable to a penalty of ten thousand rupees for every day during which such default continues, which may cumulatively extend up to 5% of unit.

 

Question 13 - Can I deposit money to any other bank account other than RERA Designated Project Account?

Answer - No, Minimum 70% of the money realized from the allottees shall be deposited into RERA Designated Bank account of the project. Read Sec 4(2)(L)(D) of the Act.

 

Question 14 - How do I withdraw money from RERA Designated Project Account?

Answer - Money shall be withdrawn based on Architect, Engineer and CA Certificates in accordance with Sec 4(2)(L)(D) of the Act. For Subsequent withdrawal, in excess of these certificate values, every withdrawal should be supported by Architect, Engineer and CA Certificates to certify percentage of the completion.

 

Question 15 - Can I avail loan against this project Account?

Answer - No, account should be free and no lien etc.

 

Question 16 - Should I obtain the certificate from same Architect, Engineer and CA Certificates every time for withdrawal?

Answer - Preferably yes, otherwise every time the professionals will end up with doing the same work/duplicating of work/more time to issue certificates etc.

 

Question 17 - Should I handover these certificates to banker to withdraw the money from project Account?

Answer - Not required unless banker insists on this. It is more of self-regulation.

 

Question 18 - What to do with these certificates?

Answer - Authorities may insist to upload these certificates during quarterly filing. these certificates are relevant and required during the Annual Audit under RERA. Statutory Auditor / RERA Auditor shall verify these certificates while issuing Annual RERA Audit Report to certify that the withdrawals are in proportion to the percentage of completion of work. Hence retain the same with the finance/accounts department.

 

Question 19 - Can I use the funds withdrawn from Project Account other than for respective Project purposes?

Answer - No, money withdrawn shall be used only for that project purpose. (if money already spent by promoter for project purpose, to that extent it can be transferred and utilised).

 

Question 20 - I have taken Construction Finance (CF) from Financial Institution/Bank - Presently as per arrangement between Construction Finance (CF) from Financial Institution/Bank, should money be deposited to Escrow Account?

Answer - Once RERA Registration is received, 70 % of the money collected from Allottees should go to RERA designated Project Account. Money can be withdrawn from RERA designated Project Account as per Sec 4(2)(L)(D) of the Act and then same can be transferred to Escrow account.

 

Question 21 - Should I deposit money Collected towards GST/Taxes?

Answer - If your estimated cost of project includes GST/taxes, then it should be deposited, if not, can be collected and deposited in separate bank account. Such money collected towards GST / taxes shall be used only for payment of taxes of this project.

 

Question 22 – Usage of Allotment letter, Sale Agreement and Sale Deed post 31st July 2017?

Answer - Yes, Allotment letter, Sale Agreement and Sale Deed shall be in compliance with RERA Act (e.g., conveyance of Carpet Area etc). Contact your legal counsel/Advocate/ Consultants for RERA Complied Allotment letter, Sale Agreement and Sale Deed.

 

Question 23 - IF OC received in march 2019, Is quarterly update need for April to June 2019?

Answer - Quarterly updates are mandatory to submit till completion of development work in the Project. Mere receipt of occupancy certificate does not amount to completion of the project. In the state of Karnataka, Electricity connection would be given by ESCOM on furnishing of Occupancy Certificate. Promoters shall carefully arrive and declare the project is completed only on achieving 100 % development work in accordance with the Sanction plan, Brochures, Terms of Agreement entered with the allotees.

Read note on - https://taxguru.in/corporate-law/completion-project-rera.html

 

Question 24 - In one case, the plan was sanctioned during July 2018, project was approved during July 2019 and RERA permanent registration is valid from July 2019. Should the quarterly returns from July 2018 to June 2019 be filed?

Answer - Yes, Quarterly Updates for the entire period from the date of registration have to be filed. In your case even though the plan was approved in July 2018, however obtained RERA Registration from July 2019, hence Quarterly update starts from Sep 2019 quarter.

 

Question 25 - Is the COVID Extension of 6 months applicable irrespective of whether any clauses mentioned or not in the agreements?

Answer - COVID 19 extension of 6 months/9 months are applicable for the completion of development in the project. I.e., End date is extended without collection of additional fees by the Authority. However, for the purpose of allottees, all clauses in the agreement shall prevail and valid irrespective of COVID 19 extension by the RERA Authority.

 

Question 26 – We have received the BDA license letter in September 2020. We are awaiting approval of our project for which documents for registration have been submitted and application is in process. When do we need to file quarterly updates for our new project and for what period? As in the rules it says that quarterly updates are to be submitted from the date of approval.

Answer - Yes, Quarterly Updates for the entire period from the date of registration have to be filed. In your case even though the plan was approved in Sep 2020, RERA Registration is yet to obtain from the Authority. hence Quarterly updates start from the quarter of registration.

 

Question 27 - For plot development also whether formation of association is applicable?

Answer - Yes required and more so if there are any amenities like club house and other common amenities in the real estate project.

 

Question 28 - If the extension is also lapsed, how do we file Quarterly Updates?

Answer - Generally Quarterly updates module is enabled till the end date of registration. Once End is over, the promoter shall file an application for extension of registration. Once the Authority extends the end date of the project, Quarterly updates modules are also automatically enabled. So, promoters can file quarterly updates post obtaining the extension.

 

Question 29 - Can we form an Association without a deed of declaration and without obtaining the OC? Do we need to register under Karnataka Apartment Ownership Act 1972?

Answer - Sec 11(4) (‘e) of the RERA Act mandates the promoter to enable the formation of Association in accordance with the local laws.

Sec 11(4) (‘e) - enable the formation of an association or society or co-operative society, as the case may be, of the allottees, or a federation of the same, under the laws applicable

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.

 

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