As part of a landmark judgment, the Haryana Real Estate Regulatory Authority – Gurugram bench has asked the Town and Country Planning Department (DTCP), Haryana, to withdraw the Completion Certificate (CC), or Occupation Certificate (OC), issued to projects that are yet to complete the development.
The authority has also asked DTCP to initiate an inquiry as to how such certificates have been procured fraudulently.
The development is expected to have ramifications across other states and regions too as several developers had rushed to secure these completion and occupation certificates ahead of the commencement of RERA in a bid to escape its jurisdiction.
It has observed many such cases where part CC, or OC, has already been issued even though the development work is not yet complete, which should be the criteria for granting these approvals.
“A fraud has been committed to secure these OCs and CCs even though the projects are yet to be completed. We have issued show-cause notices to such builders and are reaching out to vigilance for an enquiry into the matter,” KK Khandelwal, chairman, Haryana Real Estate Regulatory Authority, told ET.
The regulator has also asked DTCP to take disciplinary action against officers whose connivance builders have secured such clearances.
The authority has provided a month’s time to promoters of such projects to apply for registration, failing which penal proceedings will be initiated against them.
According to experts, the authority has taken cognizance of the trouble faced by homebuyers of such incomplete projects and builders procuring OC/CC even without completing the projects.
“This order would have wider implications benefitting homebuyers, especially since many states have diluted their real estate rules that favour builders. Such developers will be forced to comply with the registration requirement or face penalty up to 10% of the project cost as provided under the RERA,” said Abhay Upadhyay, president of pan-India homebuyers’ body Forum for People’s Collective Efforts (FPCE).
According to RERA, the development scope of the project includes external work such as roads, landscaping, water supply, sewerage and drainage, electricity supply transformer, sub-station, solid-waste management and any other work as may be provided in local laws.
Internal development work means roads, footpaths, water supply, parks, tree planting, street lighting, provision for community buildings, water conservation, energy management, fire protection and safety requirements, social infrastructure such as educational, health and other public amenities as per sanctioned plans.
Upadhyay reckons that in many cases homebuyers face problems because they are being forced to take possession without the promised infrastructure in place. The CC, or OC, can only be granted after the completion of such development work as observed by the authority.
The authority has also ruled that mere applying for Completion Certificate, or Occupation Certificate, will not exempt any real estate project from falling under the ambit of the Real Estate (Regulation & Development) Act, 2016 (RERA).
It has made it clear that the OC, or CC, granted prior to the commencement of the act will be the only condition to get an exemption from RERA registration of the project.
“…mere filing of the application cannot be treated as completion of the project/occupation of the project,” the order said.
However, it has further stated that homebuyers of these exempted projects can still approach the authority for any structural defect in the project within five years of filing the complaint. The authority has also ruled that all real estate projects will be covered for land title defect liability.