Q. Ours is a promoter’s proposed society where we are getting a plot of collector’s land and constructing it for our members only. It will be under Class II category where the members / occupants will not be the owners of the flats but will enjoy right to occupy flats permanently. The society will hire the contractor for constructing the building and there will be no builder who will sell flats to any outside buyers. The plot area is 1,000 square meters and the number of apartments to be constructed is 28. Are such projects exempted from RERA registration?
A. Section 3 of RERA clearly states that no ‘promoter’ shall advertise, market, book, sell or offer for sale or invite persons to purchase in any manner any plot, apartment or building in any ‘real estate project’ in any planning area, without registering the real estate project with Real Estate Regulatory Authority. The definition of ‘promoter’ expressly includes even the ‘primary housing society which constructs apartments or buildings for its members’ [Ref Sec 2 (zk)(iv)]. Thus your society in such case becomes a ‘promoterp under RERA. Therefore, not engaging the builder / promoter by itself does not exempt your society from mandatory registration of your project.
Let’s also examine if your proposed project on collector’s land constitutes a ‘real estate project’ as defined under Sec 2(zn) of RERA. According to this definition, ‘real estate project’ means the development of a building or a building consisting of apartments or converting an existing building or part thereof into apartments, or the development of land into plots or apartment for purpose of ‘selling’ all or some of the said apartments. In your case, on getting plot of land from collector your society is going to be paid ‘consideration’ by all members for construction the flats. Your members are also going to pay the land cost to your society. All these transactions, according to me, will constitute the society ‘selling’ the flats to its own members. Although the sale in such case is restricted only to your society’s members, it does not matter. As such your housing project constitutes ‘real estate project’ as defined in RERA.
It is important to note that Sec 3 (2) of RERA has exempted only three categories of real estate projects from mandatory registration. The first is where the plot area does not exceed 500 square metres or the number of apartments does not exceed eight. You exceed both these thresholds. The other two categories are where completion certificate is obtained and cases of repairs, reconstruction of redevelopment not involving marketing, selling. Thus you do not fall into any of the three categories that are exempted from the registration. The plot of land to be allotted to you being under Class II category also does not matter.
The definition of ‘allottee’ in relation to a project means the person to whom a plot, apartment or building has been allotted, sold (whether as freehold or leasehold) or otherwise transferred by the ‘promoter’. In your case the flats will be allotted to all members by the society. As such all the members shall also be ‘allottees’ as defined under RERA.
In short, in a case of promoter’s society seeking to develop plot of land to be allotted by the collector and constructing flats only for its members, such a project, in my considered opinion, is not exempted mandatory registration with MahaRERA.
Advocate Shirish V Deshpande is chairman, Mumbai Grahak Panchayat. Queries can be sent to him on email: shirish50@yahoo.com
