Latest news with #RealEstate(RegulationandDevelopment)Act2016
Economic Times
19 hours ago
- Business
- Economic Times
Can builders invoke force majeure clause to delay possession? Know what RERA says
You've been waiting ages for your dream home, and you've always paid all your home loan EMIs on time. But even after all this, actually getting the keys to your flat feels like a distant dream. Why? The developer is not giving you any clear answers, just keeps throwing around the term ' force majeure', which basically means 'uncontrollable circumstances', to justify these delays. But what exactly are these circumstances, also known as 'force majeure ' situations? Do distressed homebuyers have any legal recourse against such delays under RERA? Read on to know more. All you should know about the force majeure clause Section 6 of the Real Estate (Regulation and Development) Act 2016 allows developers to apply for extensions when their projects face delays caused by ' force majeure' events. These events are generally unforeseeable and beyond the builder's control, and so, they need more time to finish the project. Also Read: Even RERA won't help if you commit these 6 mistakes while buying a property According to the Act, a 'force majeure' event is defined as a 'case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project'. Adds Advocate Pranav Gupta, legal advisor at the Confederation of Real Estate Developers' Associations of India (CREDAI) and expert in real estate matters, 'Real estate developers can use events such as earthquakes, floods, pandemics (e.g., COVID-19), and court injunctions as valid grounds for invoking force majeure '. 'While force majeure i s a legitimate defense, its misuse is a frequent point of litigation. Builders often attempt to classify generic commercial difficulties under this clause, but courts have insisted on a strict interpretation. Judicial pronouncements require developers to show a causal nexus, which means that the event must directly impede performance. To avail relief under this clause, developers must submit credible documentary evidence and a formal application using Form REP-V. ', he explains. Experts say that while RERA has no statutory obligation to grant extensions, it generally does provide extra time to builders in cases of court orders, or the pandemic, where such extensions were granted en masse. Also Read: RERA impact: Homebuyer to get Rs 65 lakh compensation for delay of over 9 years in possession of a home in Delhi NCR However, project extensions on the grounds of financial constraints, shortage of raw materials, or workforce unavailability do not qualify for relief under this clause, since they are seen as occupational risks on the part of the developer. But, according to Harshit Batra, whose firm deals in real estate matters, ' force majeure circumstances also includes, but are not limited to bans/ orders/ regulations on mining activities, regulation of the construction and development activities by the authorities like the National Green Tribunal, Hon'ble Courts and other quasi-judicial authorities on account of the environmental conditions, restrictions on usage of water, shortage of labour and materials, lockdowns, etc'. How long can builders keep extending projects by enforcing force majeure clause? As per Section 6 of the RERA Act, a promoter can request an extension of up to one year by providing valid reasons for the project's though the law specifies that developers can't keep asking for indefinite extensions to delay their delivery obligations, it also mandates that 'no application for extension of registration shall be rejected unless the applicant has been given an opportunity of being heard in the matter'. This means that if the relevant authorities haven't reviewed this extension application, the project might be stuck in a limbo, which also means that there is not much that homebuyers can do regarding the project. According to Gupta, any attempt to stretch this one-year limit under Section 6 must be grounded in documented, exceptional conditions. 'Courts have frowned upon habitual extensions sought under the pretext of continuing uncertainty. But, the key principle here is proportionality — a temporary disruption cannot justify indefinite postponement', he says. Can builders include clauses in the sale agreement that facilitate the auto-extension of the project delivery date? Sometimes, in a bid to protect themselves, builders might try to include auto-extension clauses in the sale agreements, which could potentially give them blanket power to postpone handing over possession, using vague justifications. Frequently, these clauses try to bypass the legal options that the buyers have regarding delivery schedules. However, experts have pointed out that such one-sided clauses are not generally enforceable in standard builder-buyer agreements, and RERA also overrides these clauses. Also, under various other laws, such as the Indian Contract Act and the Consumer Protection Act, such unfair terms can be struck down as unreasonable. Generally, most model RERA sale agreement clearly state that 'the promoter assures to hand over possession of the plot/ unit/ apartment for residential/commercial/industrial/ IT/ any other usage (as the case may be) along with parking (if applicable) as per agreed terms and conditions unless there is delay due to ' force majeure ', court orders, government policy/ guidelines, decisions affecting the regular development of the real estate project. 'If the completion of the project is delayed due to the above conditions, then the allottee agrees that the promoter shall be entitled to the extension of time for delivery of possession of the Plot/ Unit/ Apartment for Residential/ Commercial/ Industrial/ IT/ any other usage (as the case may be)', it further adds. However, it does not state any standard timeline for such extensions, which potentially leaves room for ambiguity. In case the project does not go through due to such ' force majeure ' situations, the allotment automatically stands terminated. Not only will the promoter have to refund the entire amount to the allottee within 90 days, but also inform them 30 days before the termination, adds Batra. Can RERA grant extensions without first consulting buyers involved in the project? 'Starting May 2025, a public notice is required to be issued, i.e. the extensions granted by the relevant RERA will have been made subject to the issuance of public notice in prominent newspapers inviting objections towards the grant of such extensions under Section 6 and for consideration under Section 7(3). This now forms part of a mandatory requirement on the part of promoters', per Batra. Gupta says that while there is no statutory obligation to seek buyer input, RERA's decisions can be challenged if they seem arbitrary or lack transparency. Buyers' associations are free to seek a legal review if such extensions are granted without due process or documentation.
Time of India
a day ago
- Business
- Time of India
Can builders invoke force majeure clause to delay possession? Know what RERA says
All you should know about the force majeure clause Academy Empower your mind, elevate your skills How long can builders keep extending projects by enforcing force majeure clause? Can builders include clauses in the sale agreement that facilitate the auto-extension of the project delivery date? Can RERA grant extensions without first consulting buyers involved in the project? You've been waiting ages for your dream home, and you've always paid all your home loan EMIs on time. But even after all this, actually getting the keys to your flat feels like a distant dream. Why? The developer is not giving you any clear answers, just keeps throwing around the term ' force majeure ', which basically means 'uncontrollable circumstances', to justify these what exactly are these circumstances, also known as 'force majeure' situations? Do distressed homebuyers have any legal recourse against such delays under RERA ? Read on to know 6 of the Real Estate (Regulation and Development) Act 2016 allows developers to apply for extensions when their projects face delays caused by 'force majeure' events. These events are generally unforeseeable and beyond the builder's control, and so, they need more time to finish the to the Act, a 'force majeure' event is defined as a 'case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project'.Adds Advocate Pranav Gupta, legal advisor at the Confederation of Real Estate Developers ' Associations of India (CREDAI) and expert in real estate matters, 'Real estate developers can use events such as earthquakes, floods, pandemics (e.g., COVID-19), and court injunctions as valid grounds for invoking force majeure'.'While force majeure is a legitimate defense, its misuse is a frequent point of litigation. Builders often attempt to classify generic commercial difficulties under this clause, but courts have insisted on a strict interpretation. Judicial pronouncements require developers to show a causal nexus, which means that the event must directly impede performance. To avail relief under this clause, developers must submit credible documentary evidence and a formal application using Form REP-V. ', he say that while RERA has no statutory obligation to grant extensions, it generally does provide extra time to builders in cases of court orders, or the pandemic, where such extensions were granted en project extensions on the grounds of financial constraints, shortage of raw materials, or workforce unavailability do not qualify for relief under this clause, since they are seen as occupational risks on the part of the according to Harshit Batra, whose firm deals in real estate matters, 'force majeure circumstances also includes, but are not limited to bans/ orders/ regulations on mining activities, regulation of the construction and development activities by the authorities like the National Green Tribunal , Hon'ble Courts and other quasi-judicial authorities on account of the environmental conditions, restrictions on usage of water, shortage of labour and materials, lockdowns, etc'.As per Section 6 of the RERA Act, a promoter can request an extension of up to one year by providing valid reasons for the project's though the law specifies that developers can't keep asking for indefinite extensions to delay their delivery obligations, it also mandates that 'no application for extension of registration shall be rejected unless the applicant has been given an opportunity of being heard in the matter'.This means that if the relevant authorities haven't reviewed this extension application, the project might be stuck in a limbo, which also means that there is not much that homebuyers can do regarding the to Gupta, any attempt to stretch this one-year limit under Section 6 must be grounded in documented, exceptional conditions. 'Courts have frowned upon habitual extensions sought under the pretext of continuing uncertainty. But, the key principle here is proportionality — a temporary disruption cannot justify indefinite postponement', he in a bid to protect themselves, builders might try to include auto-extension clauses in the sale agreements, which could potentially give them blanket power to postpone handing over possession, using vague justifications. Frequently, these clauses try to bypass the legal options that the buyers have regarding delivery experts have pointed out that such one-sided clauses are not generally enforceable in standard builder-buyer agreements, and RERA also overrides these clauses. Also, under various other laws, such as the Indian Contract Act and the Consumer Protection Act , such unfair terms can be struck down as most model RERA sale agreement clearly state that 'the promoter assures to hand over possession of the plot/ unit/ apartment for residential/commercial/industrial/ IT/ any other usage (as the case may be) along with parking (if applicable) as per agreed terms and conditions unless there is delay due to 'force majeure', court orders, government policy/ guidelines, decisions affecting the regular development of the real estate project.'If the completion of the project is delayed due to the above conditions, then the allottee agrees that the promoter shall be entitled to the extension of time for delivery of possession of the Plot/ Unit/ Apartment for Residential/ Commercial/ Industrial/ IT/ any other usage (as the case may be)', it further adds. However, it does not state any standard timeline for such extensions, which potentially leaves room for case the project does not go through due to such 'force majeure' situations, the allotment automatically stands terminated. Not only will the promoter have to refund the entire amount to the allottee within 90 days, but also inform them 30 days before the termination, adds Batra.'Starting May 2025, a public notice is required to be issued, i.e. the extensions granted by the relevant RERA will have been made subject to the issuance of public notice in prominent newspapers inviting objections towards the grant of such extensions under Section 6 and for consideration under Section 7(3). This now forms part of a mandatory requirement on the part of promoters', per says that while there is no statutory obligation to seek buyer input, RERA's decisions can be challenged if they seem arbitrary or lack transparency. Buyers' associations are free to seek a legal review if such extensions are granted without due process or documentation.
New Indian Express
13-05-2025
- Business
- New Indian Express
Headless & sans members, ORERA in limbo; Odisha makes H&UD principal secretary regulatory authority
BHUBANESWAR: With all key posts in the Odisha Real Estate Regulatory Authority (ORERA) including that of chairman lying vacant, the state government on Monday appointed the principal secretary, Housing and Urban Development department as its regulatory authority. As per the notification of the H&UD department, the principal secretary will remain the regulatory authority of ORERA as per the provisions of the Real Estate (Regulation and Development) Act 2016 until further orders. The ORERA functions with three senior officials - a chairman and two members -- member (judicial) and member (administration). After ORERA chairman Siddhanta Das resigned on February 28, the H&UD department had appointed member (judicial) Gopal Chandra Patnaik as the acting chairperson. Patnaik retired on May 9, a week after the retirement of member (administration) Pradeep Biswal, leaving the authority headless. Sources said though a three-member panel has shortlisted names and submitted it to the state government for appointment to the three positions, some home buyers, owing to the delay in appointment, moved the Orissa High Court and the Supreme Court and the matter is now sub-judice in the HC. The principal secretary of the H&UD department has been appointed as the regulatory authority for the body as a temporary measure, they added.
Hindustan Times
28-04-2025
- Business
- Hindustan Times
Telangana RERA fines Hyderabad developer ₹4.2 lakh for promoting real estate project without RERA registration
The Telangana Real Estate Regulatory Authority (TG RERA) has imposed a penalty of ₹4.2 lakh on a developer for flouting key Real Estate (Regulation and Development) Act 2016 provisions. The authority found that the developer, Sanali Housing Projects Pvt Ltd, promoted the project in Hyderabad and advertised without mandatory registration with TGRERA or obtaining required approvals from the Greater Hyderabad Municipal Corporation (GHMC). "A penalty of ₹4,27,013 is imposed upon the promoter under section 59 of the Real Estate (Regulation and Development) Act for violation of sections 3 and 4 of the Act," the order said. The order further directed the developer to register the project Sanali Pinnacle under Section 3 of the Real Estate (Regulation and Development) Act, 2016. "Until such registration is obtained, the developer is restrained from advertising, marketing, booking, selling, offering for sale, or inviting any person(s) to purchase any unit in the said project." Also Read: Telangana RERA bars realtor from selling units in delayed Hyderabad project; Buyers' body told to submit completion plan The Sanali Pinnacle project, located in Hyderabad's Shaikpet, is a mixed-development project with residential and commercial units. The complainants, who are landowners, signed an agreement with the developer in March 2021. "The agreement stipulated that development would commence only upon obtaining requisite approvals from GHMC. However, even after three years, the Respondents failed to secure necessary permissions or provide updates," the order said. The order further said that the developer failed to register the project with TGRERA and proceeded to advertise 'Sanali Pinnacle' on various platforms, including Google, real estate websites, and their official website, falsely claiming approvals had been secured. Additionally, advertisement boards displaying 'Sanali Coming Soon….' were erected at the site. Also Read: Karnataka RERA: Projects that applied for OC before RERA came into effect need not be registered Referring to Section 3 of the RERA Act, the authority stated that the promoter is prohibited from advertising, marketing, booking, selling, or offering any real estate project for sale unless the project is registered with the Telangana Real Estate Regulatory Authority. 'In the present case, the developer has published an advertisement on its official website, presenting the project as an 'ongoing project,' despite not having secured registration under TGRERA," it said. In its defence, the developer contended that the publication does not constitute an advertisement as it merely provides the project's name without specifying the location, area, pricing, or other material particulars. However, TGRERA said that according to Section 2(b) of the RERA Act, any material shared with the public about a real estate project counts as an advertisement, even if it does not mention the price, location, or other details. The developer's claim that mentioning the project name is not an advertisement does not hold up, as the Act does not say that only detailed information qualifies as advertising. "In the present case, it has been established that the developer's act of publishing the project as an ongoing project on its website, describing it as an uber-luxurious apartment complex comprising 40 units, and further displaying a board on-site stating, 'Exquisitely crafted residences for exceptional 40,' constitutes an act of promoting the project without prior registration under TGRERA," the order said. Thus, TGRERA said the developer has violated the provisions of Section 3(1) of the RERA Act and is liable for the penalty. has sent a list of queries to the real estate developer. If they respond, the copy will be updated.
