Refund may not be allowed if project is 40 percent complete: HARERA Gurugram chief - Moneycontrol.

com 11/05/19, 1(09 PM

Refund may not be allowed if

project is 40 percent complete:
HARERA Gurugram chief
Real estate developers who procured occupation
certificates fraudulently to be taken to task
Chairman of Gurugram Haryana Real Estate Regulatory Authority
(HARERA) K K Khandelwal has made it clear that in projects where
construction is 40 percent complete, refund may not be allowed to
ensure that the project is completed. He has also said that real estate
developers who procured occupation certificates fraudulently will be
taken to task.

The purpose of RERA is to balance the interests and protect the rights of
the key stakeholders – builders, buyers and agents. "But our first priority
is to ensure that home buyers get possession of their homes," said
Khandelwal, adding that 66 percent projects have been completed in
Gurugram (with minor differences) even after 20 to 25 percent delay.

He also reiterated that realty projects come under the ambit of RERA Act
even if occupation certificate has been received before July 28, 2017.
“Nowhere does RERA 2016 Act mention that it is applicable only for
registered projects. If a buyer finds defects in the structure of a
completed unit, he can still approach RERA for redressal,” he said.

Edited excerpts from the interview with Khandelwal

If construction over 40 percent, no refund may be permitted?

Haryana RERA has taken few steps that are favourable to builders as well
as allottees. Where construction is 40 percent complete, we are not

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Refund may not be allowed if project is 40 percent complete: HARERA Gurugram chief - Moneycontrol.com 11/05/19, 1(09 PM

allowing refund as a matter of policy. If you refund one person, there will
be 10 more asking for refund. If refunds are allowed, other homebuyers
invested in the project will suffer and the project will never see the light
of day. To protect the interest of one person, you are jeopardizing
interests of scores of others. We have, therefore, decided to take a
balanced approach to ensure that projects are completed. To complete
projects on time we are not blindly or mechanically allowing refund
except in rarest of rare cases. This is a real estate growth friendly step
that we have taken.

Real estate developers who have fraudulently secured occupation

certificate may face action

Those real estate developers who had tried to procure occupation

certificates by fraudulent means will face action. Fraudulent OCs will all
be cancelled and action will also be taken against errant officials.

Only 33 projects registered on Haryana RERA website?

This is because the website is not fully operational yet. We are still in the
process of uploading old data. It will take another 15 days for all projects
to be uploaded.

RERA empowers homebuyers to seek penal interest in case of delay

If buyers do not get delivery of their homes as per the builder-buyer

agreement, they can either claim penal interest or seek refund from the
real estate developers with interest.

Most anomalies to do with the rate at which interest penalty has to be

paid to buyers have been addressed by Haryana RERA. Earlier, if the
buyer was late in making payments to the developer, he would be
charged penalty at the rate of 18 to 24 percent but if the builder did not
had over possession in time, he was liable to pay penalty at the rate of Rs

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Refund may not be allowed if project is 40 percent complete: HARERA Gurugram chief - Moneycontrol.com 11/05/19, 1(09 PM

5 or Rs 10 per sq ft. The RERA Act clearly defines that interest that is
payable by the allottee to the promoter or vice versa will be the same.
Also, it is payable by the developer from the day he has taken money
from the buyer.

Similarly in case of delay, if buyers decide to stay invested in a project,

they would be given interest at the prescribed rate for every month of
delay. The prescribed rate varies from 10.15 per cent to 10.45 percent.
Also, if buyers have suffered mental harassment, quantifiable losses, they
can file a separate case for compensation.

What about mechanism to rope in realty bodies to complete

unfinished projects?

Haryana RERA is in the process of evolving a mechanism under which

real estate developers and industry bodies such as NAREDCO and
CREDAI may be roped in to complete unfinished realty projects. After we
arrive at a consensus, the plan will be sent to the state government for
approval. Our focus is on delivering as many projects as possible.

Also, even when we receive complaints, we first try and ensure that it is
settled outside the ambit of the Authority, directly between the builder
and the buyer. If projects can be revived and issues resolved through this
method, it better be done. This mechanism is being evolved.

We have till date resolved 15 to 20 per cent cases outside the authorityʼs
forum, in which people have received settlement.

What about the timeframe for resolution of complaints?

The expectation is that complaints be addressed within 60 days but it

has been taking long because of the backlog of cases. There were 800
cases when we started off. I guarantee that within three to four months
we would have evolved a mechanism by which we would be in a position

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Refund may not be allowed if project is 40 percent complete: HARERA Gurugram chief - Moneycontrol.com 11/05/19, 1(09 PM

to take decisions on complaints within 60 days.

We count 60 days from the time of receiving the application and the
process involves scrutinising the application, returning the application in
case more data is required etc. We try and be as complainant friendly as
possible. Once we have both the complainant and the respondent across
the table, it does not even take 60 days because the issue is settled
face-to-face. Many cases have also been decided at the first sitting. In
many cases, it has taken us barely 7 to 10 days to give our verdict.

Also, initially, if we dispose of cases fast, appeals will happen and it may
not be sustainable. It is better to take time to dispose of cases rather
them dispose them of quickly. Also, it is expected that cases be decided
within 60 days but it is not mandatory. There is no delay on our part
where decision making is concerned, delays are procedural delays.

We are in the process of appointing an adjudicating officer. We have

received nine applications and the governmentʼs go ahead is awaited. An
adjudicating official has to be a former district judge and his role is to
decide on compensation. Our work has not suffered because of this.
People who have asked for compensation, we have kept their rights
reserved. As soon as an adjudicating official is appointed, cases
pertaining to compensation will be decided.

Realty projects under ambit of RERA Act even if OC received before

July 28, 2017

Even if developers have received partial completion/occupation

certificates before July 28, 2017, the projects may be exempt from
registration but are still under the ambit of the RERA Act. Also, mere filing
of OC does not give them exemption.

Nowhere does RERA 2016 Act mention that it is applicable only for
registered projects. If a buyer finds defects in the structure of a

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Refund may not be allowed if project is 40 percent complete: HARERA Gurugram chief - Moneycontrol.com 11/05/19, 1(09 PM

completed unit, he can still approach RERA for redressal.

There are three types of projects that are exempted from registration.
Projects that are 500 sq m and have less than eight flats; projects where
completion certificates have been issued and remodeling projects. These
three kinds of projects have been exempted from RERA registration but
not exempted from the ambit of the Act. Registration starts at the start of
construction and ends at the completion of the project. Once completion
certificate is issued, the registration validity automatically expires. But
there are certain obligations that the promoter is expected to comply
with even after the expiry of registration. These include giving possession
of the unit on time, conveyance deed, structural defect liability and
workmanship liability for five years, land title liability, complete common
facilities, transfer common areas. Registration or no registration, if there
is non-compliance of obligations by the promoter, the consumer can still
file a complaint with RERA. Also, the defect liability is valid for five years
under RERA.

The Simmi Sikka versus Emaar MGF case handled by the Gurgaon Bench
of Harera, recently put to rest any confusion about the applicability of the
Act. The fact that real estate projects (that are at least three years old)
fall under the Act is an attempt to nullify the effect of dilution of the
provisions of the Act by Haryana Rera rules,

HARERA Gurugram has also ordered that all new projects are to be
registered with the authority irrespective of whether the builder is
intending to market the real estate after completion of the project or
during the construction phase. Even if the builder is selling ready-to-
move-in properties, secondary real estate, he is required to provide
details of the building he has sold. If you are mentioning in the agreement
that the unit is being sold on an as is where is basis, you have to disclose
what is as is where is, what is being provided for in the unit etc.

Having said this, these provisions will not be applicable to projects that
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Refund may not be allowed if project is 40 percent complete: HARERA Gurugram chief - Moneycontrol.com 11/05/19, 1(09 PM

have been delayed by 20 years. There are limitations. Homebuyers who

have received possession over three years ago and where vested
interests have been finalized, this Act will not disturb the legal
relationship between the two parties.

Vandana.ramnani@nw18.com

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