Promoter under the Real Estate (Regulation and Development) Act, 2016
Meaning of Promoter under RERA
According to section 2(zk) of the Act promoter means:
- 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; or
- a person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon; or
- any development authority or any other public body in respect of allottees of- (a) buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or placed at their disposal by the Government; or (b) plots owned by such authority or body or placed at their disposal by the Government; for the purpose of selling all or some of the apartments or plots, or
- an apex State level co-operative housing finance society and a primary co-operative housing society which constructs apartments or buildings for its Members or in respect of the allottees of such apartments or buildings; or
- any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other name or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale; or
- such other person who constructs any building or apartment for sale to the general public.
Mandatory amount to be deposited with the bank by the promoters
It is compulsory to have a separate Escrow Account to be opened for each project and an amount equal to 70% collected against a particular project has to be deposited in that account.
Liabilities of a promoter
The Real Estate Act requires a promoter to do the following:
- To make available the documents and information necessary for inspection to persons taking or intending to take a property. These documents include the ones necessary for registration but are not limited to them. Further, the title should be certified by the revenue authority. Details regarding encumbrances, layout plan, estimated cost should be given.
- To issue or publish an advertisement or prospectus for inviting persons to make advances only after acquiring registration and filing a copy of the advertisement in the office of the regulating authority.
- To enter all records and details on the website maintained by the authority after verifying the facts.
- To compensate any person who suffers a loss by reason of any untrue statement in the advertisement or prospectus.
- To receive any advance or deposit from a real estate consumer only under a written agreement of sale
- Give due notice to other parties and refund the amount with the specified interest before cancelling any agreement.
- To take measures for the protection and safety of the property. Promoter is also supposed to maintain accounts of sums taken from and on behalf of the allottees, register and record for audit purposes in a prescribed manner.
- To make certain documents available to the allottees during the project period. These documents are in addition to the ones contemplated in section 6 of the real estate bill which were for the purpose of inspection and include site plans with structural designs and specifications, nature of fittings, time schedule of completion of project and for connecting the project with municipal services, agreements entered into regarding the construction of the building and statutory compliance related to revenue, planning, building and structural safety laws. A completion certificate of the project is to be obtained b the promoter from the local authority and given to the allottee. This list is however, not exhaustive as other documents may be required to be given by the promoter.
- Not to make any alterations can be made to the approved layout plan after it is given to the allottee without the previous consent of the allottee, architect and engineer and without permission of the regulatory authority.
- To rectify any defect brought to his notice within 2 years of possession of property by allottee and should compensate for the same. Any dispute in this regard is to be referred to the regulatory authority.
- To complete his title and convey exclusive ownership of the concerned property and interests therein to the allottee. The promoter shall deliver the documents of title to the allottee within three months of giving possession of the concerned property by way of a conveyance deed.
- Not mortgage the plot or apartment without the consent of the person who has taken or agreed to take such plot or apartment after execution of agreement of sale and if such a mortgage is made it shall not affect the right of such a person.
- Be responsible for supplying essential services such as water, electricity, sanitary services and these services can be withheld only with just and sufficient notice.
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