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Builders in a hurry to give possession to

homebuyers to avoid RERA penalty for late delivery
of apartments
Developers are getting part completion certi cates to deliver apartments in incomplete projects to skip late delivery penalty
REAL ESTATE Updated: May 06, 2017 21:13 IST

Vandana Ramnani

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3/4/2019 Builders in a hurry to give possession to homebuyers to avoid RERA penalty for late delivery of apartments | real estate | Hindustan Times

Developers are getting part completion certi cates to deliver apartments in incomplete projects to skip late delivery penalty.(Getty
Images/iStockphoto)

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3/4/2019 Builders in a hurry to give possession to homebuyers to avoid RERA penalty for late delivery of apartments | real estate | Hindustan Times

More than 2,000 families have been virtually forced by developers to hurriedly move into new housing
projects in Greater Noida West and Noida. The reason? Most of the projects have been given ‘partial’
completion certi cates which allow the builders to deliver possession to buyers for touts (allowing
the latter to carry out interior work) even though basic amenities or infrastructure are missing.
Delivering apartments in such a manner means developers will not have to pay penalty to buyers for
late delivery as mandated by the Real Estate Regulatory Act (or RERA) once it kicks in from May this
year.

The term ‘partial’ completion certi cate incorporated in the UP Apartment Act sometime back, is
issued to builders to facilitate tower wise completion, especially for large projects. Buyers moving in
“before completion” will not get compensation for late delivery.

Part completion certi cates were seen as a means to provide relief to apartment owners stuck in large
uni nished housing projects. This is now being misused by some developers who receive ‘part’
completion for a few towers but not ‘total completion’ certi cate which requires inspectors to review
work in the previous towers before granting the nal document, say experts.

Habitable condition

Interestingly, the rules framed by the Central government under RERA for union territories clearly
state that “ready to move in possession” shall mean that the apartment shall be in a habitable
condition which is complete in all respects including the provision of all speci cations, amenities and
facilities, as agreed to between the parties, and for which occupation certi cate and completion
certi cate, as the case may be, has been issued by the competent authority.”

Read more

Developers scramble for Real Estate Act compliance, but buyers remain sceptical
(https://www.hindustantimes.com/real-estate/developers-scramble-for-real-estate-act-
compliance-but-buyers-remain-sceptical/story-ixAlP94x4d8ZnFiHJJ2bpL.html)

Real Estate Regulatory Act: grey areas still persist and need to be plugged
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3/4/2019 Builders in a hurry to give possession to homebuyers to avoid RERA penalty for late delivery of apartments | real estate | Hindustan Times

The rules framed by the UP government and titled Uttar Pradesh Apartment (Promotion of
Construction, Ownership and Maintenance) (Amendment) Rules, 2015, de ne “ongoing projects” as
un nished projects without completion certi cates. Projects in the rules which have been excluded
are those “where all development work have been completed and sale/lease deeds of sixty percent of
the apartments/houses/plots have been executed” and “where all development works have been
completed and application has been led with the competent authority for issue of completion
certi cate.”

Legal experts warn that these two provisions under the RERA rules framed by the UP government are
being “misused” by developers. They are handing over real estate projects to buyers in a “hurry”
before RERA comes into effect from May 1, 2017.

Recently, a few developers who acquired part completion certi cates executed sale or lease deeds with
60% buyers Some builders were also ling applications for completion certi cates with the authority
in advance to exclude themseves from the ambit of RERA, S K Pal, a Supreme Court lawyer, said.

Part completion

Homebuyers will therefore have to be careful and ensure that the projects they are investing in are
complete in all respects before taking possession. If they are not careful, buyers will not come under
the ambit of the security that RERA offers, he says.

Part completion is alien to the urban development act of any state wherein it is clearly stated that a
property cannot be sold unless a project has been awarded a completion certi cate. The Act identi es
a group housing project to mean the area earmarked under the Master Plan, say urban planners.

Read more

Stick to what’s promised in advertisements and deliver projects on time, Venkaiah Naidu
advises builders (https://www.hindustantimes.com/real-estate/stick-to-what-s-promised-in-
advertisements-and-deliver-projects-on-time-venkaiah-naidu-advises-builders/story-
7V8sRA5TliVwEoZgM1AK6K.html)

Parking space, common areas to nd separate mention in ‘RERA compliant’ agreements

(https://www.hindustantimes.com/real-estate/parking-space-common-areas-to- nd-
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3/4/2019 Builders in a hurry to give possession to homebuyers to avoid RERA penalty for late delivery of apartments | real estate | Hindustan Times

A project within a project is not a concept within the urban development act which only identi es the
entire plot as a project. Even if the part occupancy certi cate covers 90% of a project, a nal
completion has to still be obtained from the authority. If not, then the project will come under the
ambit of RERA, they say.

“There should, therefore, be a policy framed by the government wherein an apartment owner should
be allowed to retain 2% to 5% of the nal payment until the entire project is awarded a completion
certi cate. Until the land cost is paid for, the previous apartment owners run the risk of having the
obligation to pay for the land cost and also the project may never get completed. The sub lease or the
conveyance deed signed between the parties should clearly state that the remaining amount of 2% or
5% shall be paid at the time the project is awarded completion certi cate,” adds Pal.

Faultlines

Amit Modi, director ABA Corp and vice president, Credai, Western UP says that neither the developer
not the buyer is at fault. First, nobody can force buyers to accept the letter of possession of a housing
project if it’s not complete in all respects.

Also, making arrangements for water or electricity is the responsibility of the government, all these
services including the roads leading to the project, have to be provided for before a developer decides
to give possession. In the last six months, Greater Noida Authority has so far received 35 applications
for completion certi cates and 27 certi cates have been so far issued to builders.

Deepak Aggarwal, CEO, Noida Authority, when contacted, said at the macro level, projects were not
given completion cer ciates because of non-issuance of no-objection certi cates by the re
department, setback issues (inadequate open space, light and air in projects), or parking problems.
Other problems included technical issues such as developers defaulting on payments to authority.

“ In case there are projects in which basic necessities have not been provided but they have been
given completion certi cates, we will look into the matter,” he added.

First Published: Mar 22, 2017 18:06 IST

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3/4/2019 Builders in a hurry to give possession to homebuyers to avoid RERA penalty for late delivery of apartments | real estate | Hindustan Times

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