RERA Registration Lapsed but Project Incomplete!

RERA authority may extend the timeline of RERA registration if Promoter justifies the delay, but in any case, maximum one year extension can be provided with extension Fees. RERA timeline doesn’t expire overnight, any Project development has Phase wise development, if proper Planning is done by builders they can avoid lapsing of Project & application for extension should be done three months before the last date. What happens when RERA registration lapsed but project is still incomplete? In such a scenario Promoters shall not be allowed to 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 of such projects.

Upon lapse of RERA timeline RERA authority may offer the Association of Allottee the right to complete the rest of Project by taking over the Project but if such arrangement in not feasible than RERA authority has the power to take over the balance Project from Promoters.

What if you have already Invested or Paid Full amount to Promoters of such RERA lapsed Project. You can withdraw from the Project. If Builders doesn’t agree to refund your investment you can file complained in the respective state RERA authority, where you will get full refund along with Stamp Duty and GST paid with Interest. When you don’t want to withdraw from such project you are entitled to get interest till the time Project is not completed.

Blog | Pune Housing Market

What is the main reason of Stacked or Lapsed Project?

There are some genuine conditions where Promoters were not willful defaulter, like delay in project due to natural calamities or Stay Order from court due to some litigation, sometimes delay in approval of NGT etc. But in maximum case delay in projects is due to unfair Practice of Promotors, Promoters collect fund for completing the Projects and diverts that fund to other Projects, sometimes Promoters take money from customers for the development of Project and starts buying Mercedes and BMW and at the end left with no money to complete the Projects. Sometimes they also make defaults with the Project financers also. Such Builders collect GST from customers, but they never deposit the same and also becomes GST defaulters. In such a scenario even if RERA freezes their bank account Project is not possible to be completed by AOA.

Is lapsed Project can be restarted by the Promoters?  

Yes, it can be restarted and new timeline for completion can be given by RERA authority if Promotors gives a consent of at least 50% allottee along with proper documents, justification and the project extension fees.

What are the other legal remedies for Allottee / Purchaser?

1)     Consumer Protection Act 2019

2)     Insolvency and Bankruptcy Code 2016

3)     Indian Contract Act 1872

4)     Specific Relief Act 1963

5)     Arbitration & Conciliation Act 1996

6)     Civil Procedure Code 1908: Civil Suit

7)     Indian Penal Code 1860: Fraud & Cheating

What if builders / Promoters are insolvent?

RERA authority has limited options to provide the relief to buyers, in case RERA authority has ordered promoters to refund the amount but promoters have no money they will either abscond or go behind the Bar, but buyers cannot get financial reliefs. When projects have opportunities to generate money than only you can get reliefs so if you see that promoters are involved in unethical practice don’t wait for the promotors to run away with the Project fund, file Complaint immediately.

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Blog | Pune Housing Market

 

Location: Pune, Maharashtra, India

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