RESEARCH PROJECT
On
‘Analysis of Definition of Promoter under RERA’
Submitted to
MAHARASHTRA NATIONAL LAW UNIVERSITY, AURANGABAD
Submitted by
Azhar Sheikh
B. [Link].B. (Hons.) Semester-VIII
Roll No. 2019/BALLB/51
Subject: Real Estate Laws
Under the guidance of
Ms. Priya Gondhalekar & Supriya Bohra
Visiting Faculty of Law
Maharashtra National Law University, Aurangabad
April, 2024
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Table of Contents
Acknowledgement.....................................................................................................................2
1 Abstract..............................................................................................................................4
2 Introduction.......................................................................................................................5
3 Important Aspects under RERA between Land Owner and Promoter under Joint
Development Agreement...........................................................................................................7
4 Responsibilities of the Promoter.......................................................................................9
5 Conclusion.......................................................................................................................11
6 References:.......................................................................................................................12
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Acknowledgement
First and foremost, I would like to thank our Hon'ble Vice-Chancellor Prof. Dr. K. V. S.
Sarma for providing me an opportunity to do this research project.
I owe a debt of gratitude to my mentors Ms. Priya Gondhalekar & Supriya Bohra for their
intensive support and helping me complete the project. They have always been supportive in
all my endeavours and I am grateful for their support.
I humbly thank my friends for their constant support and help whenever I was feeling low. It
is their inspiration that made me complete the project with precision. I would also like to
express my gratitude to my teachers, friends and my relatives for helping me and providing
me support, inspiration and encouragement throughout the study.
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1 Abstract
The Real Estate Sector has got for more importance due to the Coming of RERA Act 2016;
which has not only decided the boundaries of Promoters and Agents but it also has imposed
some essential accountabilities and responsibilities upon them to do fair and impartial
practices of buying, selling, promoting and secures the consumer rights first of all the
accountabilities of Promoters such as, Completion of Certificates, Forming of Association,
Show of Document, Registred Conveyance Deeds and Payments of Outgoings. Whereas
Accountabilities of Agents there should be a Compulsory Registration, they should be
maintained separate records, Registration and renewal of certificate should be clear up you
date on time along with application under (form G).
Objectives of the Study:
To study Accountability of Promoters.
To study Accountability of Agents.
To Create the Awareness and importance of RERA Act, 2016.
To analyze the control of RERA Act, 2016 upon Promoter and Agent.
Research Methodology:
The nature of the research paper is primarily descriptive and analytical. The secondary data
used in this paper such as relevant books, published Articles and RERA Act, Bill. The data is
collected as per used from the secondary sources. This paper follows the interpretative
approach of analyzing the data.
History of RERA Act:
During the year 2013 the UPA Government in India had already introduced the Real Estate
Regulatory Act (RERA) Bill. There were 20 Major Amendment to the Bill Suggested by the
Union Government of India in December 2015. Rajya Sabha the Amendment Recommending
and Examining Committee had also examined the Bill. The Bill had been referred to a
selection committee, which had given its report in July2015. However, Congress, Left and
AIADMK had expressed their reservations on the report through dissent notes. The bill was
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got approved in Rajya Sabha on March10th 2016 and in Lok Sabha on March 2016.
2 Introduction
The Central Government has brought a new law the RERA Act 2016 in the Real Estate
Sector, to resolve the issues of the Land& Construction Industry. “The Real Estate
(Regulation and Development) Act, 2016” the Government of India has given its consent to
implement the Law in a proper way. The President of India also sent his assent on 25th
March [Link] Act has been partly notified i.e. 1st May 2016, as far it concerns to the
establishment of Regulatory Authority, Central Advisory Council and Appellate Tribunal and
administration. However, in all probabilities this will come effective only after the States
have put the administrative mechanism in place.
The Preamble showcases importance of the enactment of this Act as a follow estate sector
and to secure clean and clear sale of plot, apartment or building, as the case may be, or sale of
real estate project, in an efficient and transparent manner and to protect the , “An Act to
establish the Real Estate Regulatory Authority to regulate and to promote the real interest of
consumers in the real estate sector and to establish an adjudicating mechanism for Speedy
dispute redresses and also to establish the Appellate Tribunal to hear appeals from the
decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating
office and for matters connected there or incidental there to.
”The definition of promoter is broad and covers all types of promoters i.e. developer, builder,
GPA holder, colonizer, contractor, plot owner in a real estate project. Thus, any person who
develops and sells is included in the definition of promoter. The land owner is the person who
causes the construction of the project, who can grant the rights to the developer through the
grant of development rights, GPA, etc., for that reason, the land owners along with the
builders are jointly responsible for the allottee in the project.
Definition of Promoter under RERA
Section 2(zk) “promoter” means
“a person who constructs or causes to be constructed a detached building or a
building consisting of flats or converts an existing building or part thereof into flats,
for the purpose of selling all or some of the flats to other persons and includes its
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agents; or a person who develops land into a project, whether or not such person
constructs structures on any of the land, for the purpose of selling all or some of the
land in said project to other persons, whether with or without structures thereon; or
any development authority or any other public authority in respect of allottees of-
buildings or flats, as the case may be, constructed by such authority or authority on
land owned by or made available to them by Government; or
land owned by or made available to such authority or body by the Government for the
purpose of selling all or any of the flats or land; or
a state-level apex housing finance co-operative society and a primary co-operative
housing society which constructs flats or buildings for its members or in relation to
persons allotting such flats or buildings; or
any other person holding himself out as a builder, colonizer, contractor, developer,
or under any other name or purporting to act as the holder of a power of attorney
from the owner of the land on which the building or flat is constructed or the land is
constructed for sale; or
such other person who constructs any building or apartment for sale to the general
public.”
Explanation – For the purposes of this Article, if the person who constructs or converts the
building into flats or constructs the plot for sale and the persons who sell the flats or plots are
different persons, both shall be deemed to be the promoters and shall jointly bear the
functions and responsibilities established by this Act or the rules and regulations made
thereunder.
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3 Important Aspects under RERA between Land Owner and Promoter
under Joint Development Agreement
RERA Act does not differentiate between land owner or developer. Both have the same
responsibility and obligations towards the project participants.
The Land Owner or Developer Agreement (JDA) defines their roles and responsibilities.
Hence, all possible clauses should be incorporated while drafting the JDA to name a few–
Who is responsible for RERA registration, quarterly updates, compliance with annual audit
rules, advertising compliance.
How to open a RERA project designated bank account – who is the signatory of the bank
account/operation.
How to collect money from allottees, mandatory deposit of 70% to bank account designated
by RERA including proceeds from sale of Landowner units in the project.
How to operate bank account designated by RERA to protect interests of both (land owner
and developer)
Withdrawal of money from bank account designated by RERA, distribution of such collected
money between land owner and developer based on project completion ratio.
Use of money collected only for the purposes of the Project 7) Delay in handing over
possession of the units to the purchasers. Compensation payable to the beneficiaries on
account of such delay in the completion of the project.
In case of non-compliance, if a fine is imposed, who will be responsible and comply with it.
Important aspects under RERA between land owner and promoter under joint development
agreement
RERA Act does not differentiate between land owner or developer. Both have the same
responsibility and obligations towards the project participants.
The Land Owner or Developer Agreement (JDA) defines their roles and responsibilities.
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Hence, all possible clauses should be incorporated while drafting the JDA to name a few–
Who is responsible for RERA registration, quarterly updates, compliance with annual audit
rules, advertising compliance.
How to open a RERA project designated bank account – who is the signatory of the bank
account/operation.
How to collect money from allottees, mandatory deposit of 70% to bank account designated
by RERA including proceeds from sale of Landowner units in the project.
How to operate bank account designated by RERA to protect interests of both (land owner
and developer)
Withdrawal of money from bank account designated by RERA, distribution of such collected
money between land owner and developer based on project completion ratio.
Use of money collected only for the purposes of the Project 7) Delay in handing over
possession of the units to the purchasers. Compensation payable to the beneficiaries on
account of such delay in the completion of the project.
In case of non-compliance, if a fine is imposed, who will be responsible and comply with it.
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4 Responsibilities of the Promoter
The promoter is primarily responsible for the registration of the real estate project with
RERA. The builder or promoter is also responsible for all duties, responsibilities and
functions as per the provisions of the RERA Act.
Website: All builders and promoters are required to create a website and display it on the
RERA website and enter all necessary details of the proposed project for public display
which include details like Registration details approved by the Authority.
Quarterly list of number and type of apartment or plots reserved, list of received and pending
approvals after commencement, project status, etc.
Certificate of Completion: Organizers are entrusted with the responsibility of obtaining the
Completion or Occupancy Certificate from the Competent Authority for making it available
to allottees either individually or to a group of allottees.
In addition, the proponent is responsible for obtaining a sale deed or lease confirmation that
specifies the lease period and certifies that all fees and charges related to the leased land have
been paid. This Land Sale Agreement, Lease Agreement and Completion Certificate must be
made available to the assignee.
Provision and maintenance of services: Promoters are required to provide and maintain
essential services at a reasonable cost until the allottee association takes over the project.
Establishment of an association: The promoter is entrusted with the responsibility of enabling
the formation of the association, company or cooperative of the assignees or their federation
according to the applicable laws. In the absence of local laws, the allottee association must be
formed within three months after the majority of allottees have reserved their plot, flat or
building in the project.
Availability of documents: The promoter should facilitate the availability of documents
during reservation and issue of allotment letter which includes for example approved plans
and layout plans which are duly approved by the competent authority.
Registered waybill: The promoter must take responsibility for the execution of the registered
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real estate transfer agreement in favor of the transferee. This must be accompanied by an
undivided proportional title in the common areas of the association of owners who have
reserved their property in the project.
Payment of expenses: The promoter must pay all the expenses until he transfers the physical
ownership of the real estate project to the allottee or association of allottees, which includes
rent, land costs, maintenance charges, etc. If the promoter fails to pay all or any of the
expenses of the allottee or association of allottees, then he is liable even after the transfer.
Mortgage restrictions: After the conclusion of the contract for the sale of any property, no
lien or encumbrance may be placed on such property. Even if this provision is violated, the
right and interests of the assignee should not be compromised.
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5 Conclusion
The Real Estate Sector was totally unorganized before coming for RERA Act, 2016 in the
sector. After the insertion of RERA Act 2016 the sector has got the power to control issues
related Real Estate Sector. That which with this power and Accountability is bifurcated
among the Promoter and Agent and along with them the rights of consumers got secured.
This imposition of Accountability of Promoter and Agent has been imposed on unfair Trade
practices, Delay of possession, and other illegal malpractices have been curbed. The RERA
Act provides the protection and secured the right of Real Estate Consumer’s against all
Unfair Trade Practices
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6 References:
1. Report of the Select Committee on the Real Estate (Regulation and Development) Bill,
(July 2015), RajyaSabha Secretariat, New Delhi, Retrieved -
[Link] Committee [Link].
2. Report of the Committee on Streamlining Approval Procedures for Real Estate Projects,
(September, 2012), Ministry of Housing and Urban Poverty Alleviation
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