Maharashtra Housing (Regulation and Development) Act 2012

1. Maharashtra Housing (Regulation and Development) Act 2012 Presented by Shantilal Kataria • MD : Aditya Group, Pune • Vice President : CREDAI-Maharashtra • Vice President : CREDAI-Pune Metro

2. 2 • It is likely to come into force by August 2014. (Provisions may come in parts.) • Rules and Regulations yet to be formed. • Model agreement yet to be prescribed under the Act. • Housing authority and appellate tribunal yet to be formed. 2. The Act does not apply to area below 250 sq.mtr / 5 flats. Also, where the occupation certificate is received prior to the act. and for redevelopment/repair without fresh allotment. Plotting scheme is not governed by this Act. 3. Section (2): • Flat means residence, office, showroom, shop, godown, industrial gala. • Carpet area shall have the same meaning as in the relevant development control regulations. • Common area of the layout shall not include parking space or garages. • Limited common area means common area in the building except parking space and utility area. • Utility area means free FSI area like balcony, terrace, flowerbed, elevation boxes etc. within or attached to the flat. • Parking space means enclosed or unenclosed,covered or open area, sufficient in size to park vehicles.

3. 3 4. Section (3) - Detailed full disclosure: • True disclosure of title. • Details of Architect, Structural Engineers., Contractor. • Size of plot(s), layout plan, carpet, utility area. • FSI, TDR. • Limited common area and facilities of the building. • Details of common areas/amenities/facilities/RG/PG of the layout. • Type of design, concrete, material to be used, technology, pre-fabricated, pre-cast, earthquake resistant etc. • Architect certified Plans, Structural & Building Specs. • Schedule of the project building-wise. • Price or Brand of Fixtures (floor/sanitary/lifts). • Written date of possession of flat with all amenities. • List of flats & parking numbers. • Details of authorized brokers, agents, dealers, middlemen. • Phase-wise layout plan with phases of development.

4. 4 5. a)The promoter can apply for the registration of the project(phase wise also as independent project) even when plans are submitted for approval (Section 4). b)The authority to register the project within 7 days of the application and allot a password for access to the website of H.R.A. (fee upto Rs. 50,000). c)No advt. or sale without registration with HRA and without displaying on the website (Section 5). d)The act will apply to the ongoing project also. e)The HRA may, after giving a hearing, cancel the registration of a project in the event it is finally declared by a Court of Law that the agreement/power of attorney under which the Promoter derives the right to the land, is invalid and debar the promoter from accessing the website of respective of the project (Section 7). f)Promoter cannot sell 10% of the total area of each building till occupation certificate is received (retained flats). g)Parking can be sold (No parking to be allotted on compulsory open space). 6. a)The promoter can accept money upto 20% of the sale price before written agreement. b)Written agreement to be executed in prescribed format. 7. The interest payable by the promoter will not be more than 15% per annum.

5. 5 8. The responsibility of the promoter to provide essential services is subject to the service provider providing the same. 9. To maintain separate accounts (building wise) of all funds received towards maintenance of the project from the purchaser. 10. Defect liability period is of 5 years. 11. No mortgage etc. to be created on sold flats without the consent of the purchaser after execution of the agreement. 12. Accounts of collection of money towards maintenance etc. and defect issue in 5 years will be handled by separate entities appointed by HRA. 13. The flat purchaser shall pay at the proper time and place the price, his proportionate share of maintenance charges, taxes etc. failing which shall be punishable with the fine which may extend to the amount defaulted. 14. Incase of single building project: a) No alteration allowed in the structure of the building without consent of the purchaser. b) Not to construct additional floor or wing if not disclosed in the agreement. c) Any alteration or addition required by the govt. or due to change in law or which are disclosed in the agreement shall not require consent of the purchaser.

6. 6 15. Incase of multiple buildings in the layout or township: a) No alteration allowed in the structure of the building without consent of the purchaser. b) Not to construct additional floor or wing if not disclosed in the agreement. c) No modification in the location of RG or garden or park or PG without the consent of purchasers who agreed to purchase on the basis of disclosure of these locations and such fact is mentioned in the written agreement. Subject to these, the layout including RG, PG etc. disclosed along with the building plans can be amended, modified and varied by the promoter time to time in accordance with the DC rules for utilization of full development potential. In an approved layout, the promoter shall be entitled to construct new buildings in the layout provided he shall not reduce compulsory open space or aggregate area of park, RG, PG, garden. 16. Formation of body: a) Incase of single building, promoter to register co-operative society/company/any other legal entity within 4 months from the date of OC or minimum 60% of the purchasers taken possession or promoter has received full consideration and other amounts, whichever is earlier. b) Incase of layout of multiple buildings or wings, the promoter to register body of each society/wing independently like above. Then the promoter to form and register apex body or federation of all such entities in the layout. If the promoter fails to do as above, the purchasers may apply to the competent authority for registration of the body.

7. 17. Convey of title etc.: a) In respect of property where only 1 building is constructed and no period for conveying the title is mentioned in the agreement, the conveyance to be executed within 4 months from the date of registration of the society/company/association. b) Incase of multiple buildings in the layout – till the time entire development of the layout is completed the conveyance is to be executed of structure of buildings where minimum 60% flats are sold and occupied along with FSI consumed in such buildings. The conveyance shall be subject to right to use common amenities, internal access road developed or to be developed in the layout with the right to use the open spaces allocated to such buildings in the agreement to sale. The promoter shall be entitled to develop and continue to develop the remaining layout land, with the right to use internal access road, all facilities, amenities, services etc. in the layout and to construct any additional structures by consuming balance FSI, TDR, additional FSI and any future increase in FSI and TDR and additional FSI due to change in law and policies provided that if the FSI of the plot in the layout is increased due to change in law/policy, then increase in FSI proportionate to FSI consumed by the conveyed structure shall belong to the organization of purchasers of the conveyed structure. It shall not be necessary for the promoter to obtain consent from the organization of purchasers in the layout for utilizing FSI. It shall be the duty of the promoter to file with the Competent authority copy of the conveyance executed by him. If the promoter fails to execute the conveyance then the purchaser shall have the right to go for the procedure of deemed conveyance. The promoter shall convey the layout plot or land to the apex body or federation. The apex body or federation formed on a layout plot shall manage and administer the common areas and facilities without having any legal right in the buildings.

8. 8 18. Effect of non-completion of project: If the promoter fails to complete construction and obtain OC by the date agreed or as decided by the HRA, then after giving a hearing, the HRA may pass an appropriate order to enable completion of construction and obtain OC. Such order may provide for - (i) Formation and registration of a legal entity of 60% of the flat purchasers who have come before the HRA. (ii) Appointment of the legal entity as an escrow agent for taking over the possession. (iii) Directing the Competent Authority to transfer the Retained Flats in the name of the escrow agent. (iv) Authorizing the escrow agent to appoint contractors, consultants and other agencies required to complete the construction and obtain OC. If the promoter for reasons beyond his control, is unable to give possession of the flat by the date agreed and further three months and three months, then the promoter shall be liable to refund the amount received with interest at the prescribed rate and penalty as may be determined by HRA.

9. 9 19. Punishment: • For non-registration of the project(section 4) upto Rs. 1,000/- per day of default (Section 44). • Penalty for not complying with or contravention of section 6 (entering required details on website within prescribed period), 16 (non completion of the project) and 17(creating mortgage of sold flats without the consent of purchaser). Penalty of Rs. 10,000/- per day or Rs. 50 lakhs, whichever is lower (Section 44). • If a flat purchaser or an organization fails to comply with or contravenes the provisions of the agreement for sale, including non-payment of any amounts or charges, he shall be liable to pay a penalty of upto Rs. 10,000/- or 1% of the sale price, whichever is higher (Section 46). • Any person who willfully fails to comply with an order of HRA or HAT shall be liable to imprisonment of upto 3 years or penalty of upto Rs. 10 lakhs or both ( Section 47). • Any person other than the promoter without reasonable cause fails to comply with or contravenes any other provision of this act or rule or does not pay the penalty shall be liable to pay the penalty upto Rs.50,000 (Section 48). • Any promoter without reasonable excuse fails to comply with or contravenes provision of Section 9(not to accept sum exceeding 20% without entering written agreement), 12(to maintain building wise separate account of maintenance), 14(no alteration without the consent of the purchaser after plans are disclosed), 18(to take steps for formation of society/company/association/apex body/federation), or 19(to convey the title of the land) shall be liable to pay the penalty upto Rs. 1 crore. • Any promoter fails to comply with or contravenes any other provision of this act or rules will be liable to pay penalty upto Rs. 10 lakhs.

10. 10 20. Authorities: Competent Authority : Competent Authority would not be below the rank of District Dy. Registrar of Co-operative societies. Housing Regulator Authority : Officer would be a person with special knowledge and experience in public administration, urban development, housing, finance law or management and is holding or has held the post of Principal Secretary to State Govt. or equivalent under Govt. of India. Housing Appellate Tribunal : Competent Authority is or was a High Court Judge, Principal Secretary to State Govt. or equivalent under Govt. of India. 21. a) Housing Regulatory Authority and Housing Appellate Tribunal shall be deemed to be a Civil Court for the purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973. b) Appeal against Housing Appellate Tribunal’s order will lie with the High Court. c) Every order passed by Housing Appellate Tribunal shall be deemed to be a decree of a Civil Court and shall be executable in the same manner. d) Provisions of this act shall be in addition to the provisions of the transfer of property act. e) State government may do anything not inconsistent with the provisions of this act, which appears to be necessary within 2 years from the date of commencement of this act.

11. 11 22. Litigation Process: Purchaser Vs Developer – Dispute –Housing Regulatory Authority Housing Appellate Tribunal - High Court – Supreme Court Challenging Deemed Conveyance order - Competent Authority – Appellate Tribunal

12. 12 23. SCHEDULE 1 : Measures for protection and safety of property building to be taken by the promoter • The promoter, the architect and the engineer engaged by the promoter, shall comply with the measures for safe construction and protection of properties against natural calamities. • The promoter shall enter into separate agreements and engage the services of an architect and an engineer and inform the Housing Regulatory Authority. • The promoter, the architect and the engineer engaged by the promoter shall jointly file a certificate, certifying that the building or flats are being constructed in accordance with the plans approved. • If for any reason, there is a change of architect or engineer during the construction of the building or flats, the promoter shall engage immediately another architect or engineer as the case may be and the incoming architect or engineer shall satisfy himself about the compliance of the measures. • The promoter shall obtain an insurance policy for the building or flats during the period of their construction, against loss or damage by natural calamities and loss of life and bodily injuries suffered by persons, workers and labourers constructing such building or flats, who may be inside or within the vicinity of such building or flats. • The promoter shall obtain an insurance policy or policies covering the liability of any loss of life and bodily injuries suffered by persons, workers and labourers as above.

13. 13 24. SCHEDULE 2: Promoter’s responsibility regarding the account of sums taken from or on behalf of unit purchasersof flat purchasers – • The promoter shall maintain building wise separate account in any bank of the sums taken by him from, as advance towards maintenance and outgoings share capital for the formation of a co-operative society and including ground rent, if any, municipal or other local taxes, charges for water or electricity, security, maintenance of gardens, club house, swimming pool, insurance, equipments, revenue assessment, if any, stamp duty and registration fee for the agreement of sale and conveyance deed. • The promoter shall hold the sums collected for the purpose for which they were given and shall disburse the same for said purposes including the development of real estate project and shall on demand, in writing, by the Housing Regulatory Authority or the flat or unit purchaser, individually or collectively, make full and true disclosure of all transactions in respect of that account on payment of charges and shall not utilize these sums for any purposes other than the purpose for which they were so collected.

14. 14 Promoter's responsibility for outgoing till transfer of management to the collective body of the allottees, flat or unit purchasers – • The promoter, who has collected from the allottee or flat or unit purchasers, sums for the payment of outgoings, shall pay all charges till the amounts collected for the same and fully depleted. • After the transfer of management of the building by the promoter to the organization, being collective body of the flat or unit purchasers, such payments and outgoings shall be made by the flat or unit purchasers or such collective body of flat or unit purchasers as the case may be. The transfer of management of the building or the layout land, as the case may be, shall be only after the promoter has received all outstanding dues. • The promoter shall discharge liability in respect of the above till the sums and deposits collected by him shall remain balance in a separate account held by the promoter in the bank. Refund of account- If the promoter fails to give possession of a flat- a) In accordance with the terms of the agreement b) On account of cancellation of his registration under this Act, he shall be liable on demand, without prejudice to other remedies to refund the amounts already received by him in respect of that flat with interest at a rate of fifteen percent per annum including penalty at such rate as may be determined by the Housing Regulatory Authority. The Housing Regulatory Authority may inspect or cause accounts or records of a promoter relating to outgoings in respect of the allottee’s complaint.

15. 15 25. Steps to be taken by the Developer: • Proper planning and monitoring as per law. • Project execution must be process driven. • Initiate a project once there is clarity. • Avoid alteration in plans. • Marketing should be as per actual offering. • Good construction quality. • Building wise proper accounting of maintenance charges.

16. 16 26. Recommendations & Suggestions: • Automatic registration after 7 days of application if not replied within time. • Access to website to be of controlled nature. • Allow 1-2 times to change 10% retention flats during sale. • Project already sold but awaiting OC should be exempted from 10% stock retention. • Exempt projects under construction where plinth checking is received. • All disputes by HRA to avoid multiple litigation. • Law should be applicable to CIDCO, MHADA, MMRDA etc. • Contractor liability to be added. • Speedy / Single window clearance. • Duties and responsibility of other stake holders. • Possession receipt to be taken and no grievances thereof. • Role of CA is not clear. Both CA & HRA can appeal to Tribunal.