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Delhi RERA mandates registration if plot size exceeds 500 sq meters


The Real Estate Regulatory Authority (RERA) of Delhi has made it mandatory for the builder to register the project if the area on which the project is being developed exceeds 500 square meters, irrespective of the number of apartments built on it. Section 3(2) (a) of the RERA provides for an exemption from registration if the land proposed to be developed is less than 500 sq metres or the number of apartments proposed to be developed is less than eight. Using the loophole, many developers in posh colonies of Delhi have been avoiding the registration, claiming that the number of apartments is less than eight and to register their project, they have to meet both conditions.

ET has recently reported about the similar order by Rajasthan RERA, where property consultants had requested Delhi RERA to come up with the similar order. “All real estate projects are required to be registered under the Act with RERA, NCT of Delhi if the area of land proposed to be developed either for building flats, floors, shops, commercial space or for plotting exceeds 500 square meters, in all phases. To illustrate even if six flats or two floors or four showrooms are being constructed as a real estate projects on a 501 square meter plot it would require registration with RERA, NCT of Delhi,” Delhi RERA Chairman Anand Kumar has said in the order. This authority has been receiving complaints from various home, commercial space, plot buyers, and the general public that many promoters (which term includes builders and developers) are avoiding RERA registration of their projects in NCT of Delhi on various pretexts. Various promoters including builders and developers have expressed doubt before the Authority whether they are required to register with the authority if their plot area exceeds 500 sq meter but the number of apartments proposed to be constructed remain below nine. Most of them appear to be under the impression that no registration is required with RERA if the plot size is either of 500 sq meters or below or they are constructing less than nine units.

“The order will bring much needed transparency in the real estate sector. Most of the development in Delhi is limited to four floors per plot and the value of home is usually on the higher side. This will give relief to homebuyers who often are duped by builders and RERA also couldn’t take action due to lack of registration,” said Amit Goyal, CEO at India Sotheby’s International Realty. Delhi RERA has also threatened to levy a penalty which may extend up to 10% of the estimated cost of the real estate project, in case the order is not followed. “If any promoter does not comply with the orders and continues to violate the provisions he shall be punishable with imprisonment for a term which may extend up to three years or with fine which may extend up to a further ten percent of the estimated cost of the real estate project, or with both,” the RERA has said in the order. RERA has also clarified, in case the number of apartments proposed to be developed exceeds eight, in all phases, on any size of the plot, the registration is mandatory. “This order is welcoming for Delhites as greater transparency becomes available. It not only protects the home buyer interests but also great for developers as such orders help increase home buyer confidence. I would like to urge the Delhi RERA to consider adding capturing of demand side data as well,” Abhishek Kiran Gupta, CEO and Co-Founder of CRE Matrix. The purpose of registration is to ensure transparency with regard to funds collected from the allottees, completion and conveyancing of the property in favour of the allottees, and to ensure that the project has the necessary approvals and sanctions. RERA registration also curtails the ability of the promoter/developer to resort to unfair practices and irregularities. Most properties in Delhi’s posh colonies are in the range of Rs 20-100 crore, wherein existing owners, mostly elderly people, either sell or collaborate with developers. “The authority also advises general public not to make any investment by booking or purchasing any residential or commercial unit/space or plot in any real estate project falling under any one of the categories,” RERA has said in the order.

Faizan Haidar, ET Bureau

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