RERA’s Allottee Consent: Safeguarding Buyers in Real Estate Transfers
Introduction: The Real Estate (Regulation and Development) Act, 2016 (RERA), is a significant piece of legislation that aims to bring transparency and accountability to the real estate sector in India. One of the crucial provisions under RERA is the mandate that requires the consent of at least two-thirds of the allottees for transferring majority rights in a real estate project to a third party. This provision serves to protect the interests of homebuyers and promotes a fair and democratic decision-making process. In this article, we will delve into the importance and implications of this RERA mandate.
Understanding the RERA Mandate: As per Section 15 of RERA, a promoter or developer is prohibited from transferring or assigning the majority rights and liabilities in a real estate project to a third party without obtaining the prior written consent of at least two-thirds of the allottees (buyers) in that project. These majority rights and liabilities can include the responsibility for construction, maintenance, and common areas of the project.
Importance of Consent from Allottees: The RERA mandate to seek the consent of the majority of allottees before transferring rights to a third party is crucial for several reasons:
- Buyer Protection: The provision safeguards the interests of homebuyers by ensuring they have a say in any decision that can significantly impact the project they have invested in.
- Transparent Decision-making: By requiring the consent of two-thirds of the allottees, the decision-making process becomes more transparent and inclusive.
- Preventing Developer Misconduct: The mandate acts as a check on the developer’s ability to transfer the project’s control or financial obligations to a third party without the consent of the buyers.
- Preserving Project Continuity: Consent from a significant majority of allottees ensures that the project continues to progress smoothly and remains on track to completion.
Procedure for Obtaining Consent: To transfer the majority rights and liabilities to a third party, the promoter or developer must follow a formal process:
- Notify Allottees: The promoter must first notify all the allottees about the proposed transfer, providing relevant details of the third party involved.
- Seek Consent: The promoter is then required to seek the written consent of at least two-thirds of the allottees within a specified timeframe.
- Registration with RERA: After obtaining the required consent, the promoter must register the details of the proposed transfer with the respective state’s Real Estate Regulatory Authority.
Consequences of Non-Compliance: Failure to comply with the RERA mandate can result in severe penalties and consequences for the promoter, including revocation of the project’s registration, fines, and possible legal action by aggrieved buyers.
Conclusion: The RERA mandate requiring the consent of at least two-thirds of the allottees for transferring majority rights to a third party is a vital provision that upholds the interests of homebuyers and ensures a fair and transparent decision-making process in the real estate sector. By seeking the consent of the buyers, this provision fosters trust between developers and allottees and promotes a conducive environment for timely and successful project completion. It stands as a significant step towards a more accountable and consumer-friendly real estate industry in India.
