The real estate (regulation and development) Act, 2016 (RERA) is set to become effective across all the states from 1 May 2017. This means every state has to establish a Regulatory Authority by that date. The Regulatory Authority will, however, have another three months to frame the rules and regulations.
In the meantime, several builders of ongoing projects, which are nearing completion, are busy arranging the occupancy certificate (OC) from their local authorities. A plausible reason could be that they may not wish their on-going project to fall under the purview of RERA.
Rohit Gera, MD, Gera Developments and VP Credai – Pune Metro says, “RERA is not applicable to those projects that have the Occupancy Certificate as on the date of notification. The objective of RERA is to protect customers especially through the period of the construction of the project. Once a project has the Occupancy certificate the risk to the consumer reduces drastically. Therefore projects which are at the end stage and are able to obtain the Occupancy certificate best advised to do so.”
Why the hurry
All those projects which have not received the OC prior to the commencement of the Act will come under the purview of the Act. For projects where the OC has already been issued, the developers need not go for its registration.
So, in case they fail to procure the OC from the local authorities, before May 1, they will have to mandatorily get the under-construction projects registered within 3 months from the date of commencement of the Act, which is May 1.
Builders, therefore, have another three months to complete unfinished work and obtain the OC to escape the mandatory registration clause. By keeping the ongoing projects under the purview of RERA even the existing buyer who hasn’t got possession is benefited. “Excluding ongoing projects from the ambit of RERA would have served no purpose at all. By including ongoing projects at least there is hope for those customers who have purchased in these projects and are stuck for one reason or another,” says Gera.
What is Occupancy Certificate?
Occupancy certificate is a certificate issued by the competent (local) authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructures such as water, sanitation and electricity. As per RERA, once the promoter obtains the OC it has to be made available to the allottees individually or to the association of allottees, as the case may be.
In these times, when the builder will be in a hurry to expedite completion of development work, make sure the required elements are in place. As a developer, they need to ensure that both external and internal development work is completed before giving possession to buyers.