Setting the Standard for Builder Accountability
Before RERA, builders often operated with a severe lack of transparency. Homebuyers were kept in the dark regarding construction progress, legal approvals, and the actual formation of housing societies.
Section 11 of the Real Estate (Regulation and Development) Act, 2016 changed the landscape entirely by laying down strict, statutory obligations and functions that every promoter (developer) must fulfill. Failure to comply with these duties can lead to severe penalties and revocation of the project's registration.
Key Duties Under Section 11
1. Mandatory Quarterly Updates
Under Section 11(1), a promoter must create a web page on the RERA Authority's portal and regularly update it. This includes providing quarterly updates on the number of flats booked, the number of garages sold, and the list of approvals taken or pending. Most importantly, they must provide the exact status of the project's physical construction.
2. Disclosing Information to Buyers
At the time of booking and issuing the allotment letter, Section 11(3) mandates that the builder must make available:
- Sanctioned plans and layout plans.
- The stage-wise time schedule of completion, including provisions for water, sanitation, and electricity.
3. Handing Over Essential Documents
Once the project is complete, the promoter cannot withhold vital documents. Under Section 11(4)(b), the builder is legally obligated to obtain the Completion Certificate (CC) and the Occupancy Certificate (OC) from the competent authority and hand them over to the homebuyers.
4. Facilitating the Formation of a Society
Builders frequently delay the formation of a housing society to maintain control over lucrative maintenance contracts and unsold open spaces. Section 11(4)(e) forces the promoter to enable the formation of an Association or Society of Allottees. In the absence of local state laws, this must be done within three months of a majority of allottees booking their flats.
5. Execution of the Conveyance Deed
The promoter is responsible for executing a registered conveyance deed in favor of the allottee (for the apartment) and in favor of the association of allottees (for the undivided proportionate title in the common areas).
6. Paying Outgoings and Clearing Dues
Under Section 11(4)(g), until the physical possession of the real estate project is transferred to the allottees or the society, the builder is solely responsible for paying all outgoings. This includes ground rent, municipal or property taxes, water and electricity charges, and any encumbrances (loans) on the land. They cannot pass these hidden arrears onto the homebuyers.