RERA tells Delhi corporations not to approve unregistered building plans

The Real Estate Regulatory Authority (RERA) of Delhi has asked the city’s four municipal
corporations and the Delhi Development Authority (DDA) not to approve building plans for
projects that have not been registered with the authority.
The decision came only days after the authority made it essential for builders to register projects
with a total developed area of more than 500 square metres, regardless of the number of flats
constructed on it.
Builders have been evading RERA registration by exploiting this loophole, and the authority has
requested the cooperation of the municipal corporation to ensure transparency.

“If a builder is claiming the house he is constructing is for his own use, he has to give an affidavit
for it,” Delhi RERA chairman Anand Kumar said. “In case he later sells it, that affidavit can be
used to take action.”
As per Section 3 of the Real Estate (Regulation and Development) Act, 2016, all real estate
projects under the different categories are required to be registered with RERA, NCT of Delhi.
Real estate projects that are being developed on land areas of more than 500 sq m for the
purpose of sale, either by way of construction of flats, commercial space, or office space, and
projects in which more than eight apartments are being constructed in all phases for the
purpose of sale, regardless of plot size, must be registered.
Legal experts said the order has touched upon an issue that needs to be looked into with much
more granularity, especially from a homebuyer’s protection point of view.
“While the order has in a way ensured that projects will now have to be registered with RERA,
limiting the process only to sanction may not be enough,” said Avikshit Moral, partner at
IndusLaw. “Both the agencies should work together during the entire life cycle of the project.
Any deviation or default that comes to the knowledge of one authority should be promptly
communicated to the other, allowing them to take corresponding actions if needed.”

Delhi RERA has said homebuyers should only buy in RERA-registered projects and they are
doing several checks to ensure every project in Delhi gets registered.
It has advised homebuyers to exercise more caution and conduct comprehensive diligence at
the time of buying any property.
“There are multiple cases in south Delhi where the builder took the money but didn’t finish the
work,” said a homebuyer who requested not to be identified. “Since these projects are not
RERA-registered, builders avoid scrutiny and continue to make money. To avoid litigation, the
buyer must invest in RERA-approved projects only.”
The authority has been receiving complaints from various home, commercial space and plot
buyers as well as the public that many builders and developers are avoiding RERA registration
of their projects in Delhi under various pretexts.
ET recently reported that property consultants in Delhi had asked Delhi RERA to make an order
making registration mandatory for all projects built on 500 sq m or more of land, similar to one
that Rajasthan RERA had made first.
Delhi RERA has also said if its order isn’t followed, it will charge a fine of up to 10% of the
estimated cost of the project.
The purpose of registration is to ensure transparency with regard to funds collected from
allottees, completion and conveyancing of the property in favour of the allottees, and to ensure
that the project has the necessary approvals and sanctions.
Most properties in Delhi’s posh colonies are in the range of Rs 20–100 crore, wherein existing
owners, mostly elderly people, either sell or collaborate with developers.