Occupation Certificate but no Completion Certificate: Is RERA registration required?

As the Real Estate (Regulation & Development) Act, 2016, (RERA) crossed the Rubicon on May 1, 2017, there is a lot of speculation on its applicability and scope. One such aspect is the absence of mandatory occupation certificate and completion certificate in many cases.

The Act states that all ongoing as well as under-construction projects that have not received completion certificate have to get registered with the regulatory authorities within three months, i.e, July 31, 2017. Projects with a plot size of minimum 500 sq m or eight apartments will fall under the purview of the Act.

Section 3 of the Act says: “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.

Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act.”

What is a completed project? 

The Act exempts completed projects from the purview of the Act. But what is the operational definition of a completed project? What would happen if a project has got an Occupation Certificate (OC) but not Completion Certificate (CC)?

“I think all projects that have 8 or more units, whether having a CC or not, should be registered under RERA. In line with the section 3(1) of the Act, which says that no developer should sell without obtaining RERA registration after May 1, a project completion certificate may be used for physical completion but a project is not completed till the RWA of the society is formed and operations handed over to the society in line with the RERA,” says lawyer Devinder Singh, who practises in the Supreme Court.

Cases have emerged where many housing societies have OC but no CC. While speaking at the PHD Chamber of Commerce conclave in Delhi recently, Haryana RERA ED Dilbag Singh Sihag had said that any project that has OC but not CC or vice versa has to register itself under RERA. “All units need to get completion certificates before July 31 even if the housing society is cent per cent occupied and all units have been sold. A CC is a legal document that attests the fact that the new building has been constructed and completed according to all the safety norms and regulations.”

Haryana has started the registration of ongoing projects. “The interim authority has already registered two developers out of the 10 applications that were received. The final rules will be out by June 30, 2017” explained Sihag.

JLL(R) chairman Anuj Puri says that every ongoing and under-construction residential project, or projects that have not received their completion certificate before RERA became a law, comes under the purview of the Act. “This means that buyers into such projects now have a very clear picture of when they can expect possession, and what their legal recourse is if the developer fails to deliver. That also applies to the amenities and facilities mentioned in the sales agreement, from which there can be no deviation unless two-third of all buyers in the project agree to such changes,” he explained.

Ongoing projects a grey area 

But ongoing projects are a grey area in some states. It’s crucial for a buyer to crosscheck rules in the state concerned before investing as many states have kept the ongoing projects out of the ambit of the Act.
“If an ongoing project falls under RERA then it’s a safe and secure investment option. In states where ongoing projects are excluded from the Act, it’s better to invest in new projects which would be registered under RERA.” says Singh.

Courtsey: Shaveta Dua | Economic Times Wealth | 27th June, 2017

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