One of the main goals of the Real Estate Regulatory Authority (RERA), which was established, was to simplify and increase transparency in the real estate industry. It sought to address the issues that the builder community was causing for homebuyers. The industry became more trustworthy by holding developers accountable and closely monitoring the project’s development. It is not all sunshine and rainbows, though, since several projects all around the country are still behind schedule, even after the passage of this Act. According to MahaRERA’s data, 406 projects fell through in Maharashtra alone in 2021.
What exactly do “Lapsed Projects” mean?
The project must be registered with the relevant state’s RERA authority when the developer or promoter is creating a real estate project to sell to third parties. The registration procedure includes information on the project’s timeframe, which the developer must follow.
But if the developer misses this date, the project is said to have expired. After the time period has passed, the promoter is not permitted to promote, market, sell, offer for sale, or book any plot, apartment, or building, as the case may be, in any of these projects, nor may they ask others to buy them in any way.
When a project’s RERA registration expires, the authority may grant the Association of Allottees (AoA) the right to take over the project and finish its development. The RERA authority has the authority to take over the remaining project if such a deal cannot be reached.
It is crucial to remember that the developer or promoter has the right to request an extension by submitting an application, together with a justification for the holdup, the necessary money, and any supporting documentation. RERA may extend the deadline for the project’s completion after taking the application and the justification into account.
You have the right to withdraw from a project and request a refund of the amount paid together with interest and compensation under the RERA requirements if you have previously invested in one that has expired. If a mutually agreeable solution cannot be reached, the homebuyer is also permitted to lodge a complaint with RERA. You have the right to request interest once a month up until you take ownership of the house if you decide not to abandon the project. Different states have different interest rates. If your building is about to undergo redevelopment, then ensure you first form an AoA.
Create an AoA beforehand if you’re Planning to Renovate your Building
It becomes challenging to maintain healthy communication and present a unified front in the event of a legal dispute once the building has been dismantled and individuals have moved away to other rentals. It could be challenging for the secretary and the committee’s core members to keep up with all the legal processes. As a result, creating an AoA allows members to utilise one another’s expertise and stay informed.
Our attorney advised us to form an AoA, and so far, that has been a wise choice. Even though there aren’t any legal difficulties right now, our developer has caused us a few little problems. We were able to address these problems as a team thanks to the AoA. Every time there is an AoA, the secretary and the small group of committee members find it challenging to follow up; we all feel accountable.
Months in advance, you may detect a phase-wise delay, which is a warning that a project is going to be delayed. In order to prevent issues, the developer must request an extension of the project’s registration at least three months before the registration expires. Any allottee or group of them should submit a “complaint” with the RERA if the developer has not applied for an extension.
Once the Project Is Lapsed
- The developer will not be entitled to access the website of RERA;
- The developer’s name will be specified in the list of defaulters;
- The authority will also inform RERA in other states and union territories about such revocation;
- RERA could direct the bank to freeze the account, and there after take further necessary actions, including consequent de-freezing of the said account, to facilitate the remaining development works in accordance with the Act.