Functions and duties
of the promoter
Chapter 3 of the RERA (Real Estate
Regulation and Development Act)
envisages in itselfadetailed list of
functionsand duties of the promoter.
Section 2z (k) of the real estate regulation
and development act 2016 defines the
word promoter. And, it also enlists the
persons who would fallin the purview of
the definition. The objective of this act is
to safeguard the interest of home buyers.
It also brings about standardization in the
real estate sector. The act also creates
such a mechanism so that transparency in
the conduct of promoters can be ensured.
The main purpose of enacting the act is to
promote accountability, trànsparency, and
efficiency.
Who isa Promoter under the RERA Act?
As per section 2(zk) of RERA Act, a person who
constructs or causes to be constructed an
independent building or a building consisting of
apartments, or converts an existing building or a part
thereof into apartments, for the purpose of selling all
or some of the apartments to other persons and
includes his assignees.
The term "promoter" includes a wide range of
activities, including not only the involves the new
constructions but also conversion of existing
buildings,plotting of land, commercial construction,
contractor and estate development by any person
holding an agent's power of attorney from the
property owner.
Deemed promoter
The explanation to Section 2(zk) provides that
where the person who constructs or converts a
building into apartments or develops a plot for sale
and the persons who sells apartments or plots are
different persons, both of them shall be deemed to
be the promoters and shall be jointly liable as such
for the functions and responsibilities specified
under this Act or the rules and regulations made
there under.
Functions and duties of promoter
The following are the functions and duties of the
promoter
Creating web site
Section 11(1) provides that the promoter shall
create his web page on the web site of the
Authority and enter all details of the proposed
project for public view, including
" details of the registration granted by the
Authority;
quarterly up-to-date the list of number and
type of apartments or plots, as the case may
be, booked;
quarterly up-to-date the list of number of
garages books;
quarterly up-to-date the list of approvals taken
and the approvals which are pending
subsequent to commencement certificate;
quarterly up-to-date status of the project; and
" Such other information and documents as
may be specified by the regulations made by
the Authority.
Advertisement
Section 11(2) provides that the advertisement or
prospectus issued or published by the promoter
shall mention the web site address of the Authority.
Information to allottees
Section 11(3) provides that the promoter at the
time of booking and issue of allotment letter shall
be responsible to make available to the allottee the
following information
" sanctioned plans, layout plans, along with
specifications, approved by the competent
authority, by display at the site or such other
place as may be specified by the regulations
made by the Authority,
" the stage wise time schedule of completion of
the project, including the provisions for civil
infrastructure like water, sanitation and
electricity.
Responsibility of promoter
Section 11(4) provides that the promoter shall be
responsible
" for all obligations, responsibilities and
functions under the Actor rules or regulations
made there under or to the allottees as per the
agreement for sale, or to the association of
allottees till the conveyance of all the
apartments, plots or buildings to the allottees,
or the common areas to the association of
allottees or to the competent authority.
" to obtain the completion certificate or the
Occupancy certificate from the relevant
competent authority and make it available to
the allottees individually or to the association
of allottees;
" to obtain the lease certificate specifying the
period of lease and certify that all dues and
charges in regard to the leasehold has been
paid and to make the lease certificate to the
association of allottees;
" for providing and maintaining the essential
services, on reasonable charges, till the
making over the maintenance of the project by
the association of the allottees:
" enable the formation of association or society
or co-operative society of the allottees or a
federation of the same under the applicable
laws;
" to execute a registered conveyance deed of
apartment, plot or building in favor of the
allottee along the undivided proportionate title
in common areas to the association of
allottees or competent authority;
" to pay all outgoings until he transfers the
physical possession of the real estate project
to the allottee including land cost, ground rent,
municipal or other taxes etc.,
" after executing an agreement for sale for any
apartment etc., not to mortgage or create on
such apartment, plot or building; even
ifmortgage is done it should bne ensured that
it shall not affect the rights and interest of the
allottee;
Accepting deposits
Section 13 (1) provides that a promoter shall not
accept a sum more than 10% of the cost of the
apartment, plot or building as an advance payment
or an application fee from a person without first
entering into a written agreement for sale with such
person and register the said agreement for sale,
under any law for the time being in force. t
Top
Agreement
Section 13(2) provides that the agreement for sale
shall be in such form as may be prescribed.It shall
specify the particulars of development of the
project along with the specifications and internal
development works and external development
works, the dates and manner by which payments
towards of the apartment etc., are to be made by
the allottees and the date on which the possession
of the department etc., is to be handed over, the
rates of interest payable by the promoter to the
allotter and the allottee to the promoter in case of
default and other such other particulars as may be
prescribed.
Adherence
Section 14 provides that the project shall be
developed and completed in accordance with the
sanctioned plans, layout plans and specifications
as approved by the competent authorities. The
promoter shall not make any additions in the
sanctioned plans, lay out plans and specifications
without the previous consent of the person. The
promoter may make such minor additions or
alterations as may be required by the allottee, or
such minor changes or alterations as may be
necessary due to architectural and structural
reasons duly recommended and verified by an
authorized architect or Engineer after p Top
declaration and intimation to the allottee.
Rectification of defects
Section 14(3) provides that in case any structural
defect or any other defects in workmanship, quality
or provision of services or any other obligations of
the promoter as per the agreement for sale such
development is brought to the notice of the
promoter within a period of 5 years by the allottee
from the date of handing over possession. The
promoter shall rectify such defects without further
charge, within 30 days and in the event of
promoter's failure to rectify such defects the
aggrieved allottees shall be entitled to receive
appropriate compensation in the manner as
provided in the Act.
Transfer to third party
Section 15 provides that the promoter shall not
transfer or assign his majority rights and liabilities
to a third party without obtaining prior written
consent of two thirds of allottees, except the
promoter and without the prior written approval of
the Authority. Such transfer or assignment shall
not affect the allotment or sale of the apartments
etc., On the transfer or assignment being
permitted by the allottees and the Authority, the
intending promoter shall be required to
independently comply with all the pending
obligations under this Act or rules or regulations
made there under.
Top
Insurance of real estate
Section 16 provides that the promoter shall obtain
all such insurances as may be notified by the
appropriate Government, including but not limited
to insurance in respect of
" title of the land and building as a part of the
real estate project; and
"construction of the real estate project.
Up to handing over of the apartment to the allottee,
the promoter is responsible to pay the premium
and charges in respect of the insurances.
Transfer of title
Section 17 provides that the promoter shall execute
a registered conveyance deed in favor of allottee
along with the undivided proportionate title in the
common areas to the association of the allottees
or the competent authority and hand over the
physical possession of the plot etc., to the allottee
and common areas to the association of allottees
or the competent authority.
After obtaining the occupancy certificate and
handing over physicalpossession to the allottees, it
shall be the responsibility of the promoter to hand
over the necessary documents and plans, including
common area to the association.
Top
Return of amount and compensation
Section 18 provides that if the promoter fails to
complete or is unable to give possession of an
apartment etc., in accordance with the terms of the
agreement for sale or due to discontinuance of his
business as developer on account of suspension or
revocation of the registration he shall be liable on
demand to the allottees, to return the amount
received by him in respect of that apartment et.,
with interest at such rate as may be prescribed in
this behalf including compensation in the manner
provided under the Act.
The promoter shall compensate the allottees in
case of any loss caused to him due to defective
title of the land, on which the project is developed
in the manner as provided under the Act and the
claim for compensation shall not be barred by
limitation provided under any law for the time being
in force. If the promoter fails to discharge any
other obligations imposed on him he shall be liable
to pay such compensation to the allottees in the
manner provided under the Act.
Obligationsof
promoter
Section 12 of RERA provides the obligation
being imposed on the promoter in
reference to advertisement or prospectus.
If any person suffers any kind of loss that
Occurs to the person making advance
payment relying on the prospectus or
advertisement then the promoter is liable
to compensate them. The person also has
the liberty to withdravw the investments
with interest from the promoter.
