Adherence to sanctioned plans and project specifications by the promoter any additions and alterations in the sanctioned plans, layout plans and specifications and the nature of fixtures, fittings and amenities described therein in respect of the apartment, plot or building, as the case may be, which are agreed to be taken, without the previous consent of that person ADVERTISEMENT Ads by Provided that the promoter may make such minor additions or alterations as may be required by the allottee, or such minor changes or alterations as may be necessary due to architectural and structural reasons duly recommended and verified by an authorised Architect or Engineer after proper declaration and intimation to the allottee Explanation—For the purpose of this clause, “minor additions or alterations” excludes structural change including an addition to the area or change in height, or the removal of part of a building, or any change to the structure, such as the construction or removal or cutting into of any wall or a part of a wall, partition, column, beam, joist, floor including a mezzanine floor or other support, or a change to or closing of any required means of access ingress or egress or a change to the fixtures or equipment, etc., ii. Any other alterations or additions to the sanctioned plans, layout plans, and specifications of the buildings or common areas within the project without the prior written consent of at least two-thirds of the allottees, excluding the promoter, who have agreed to purchase apartments in such building. Explanation: For the purposes of this clause, the allottees, regardless of the number of apartments or plots booked by him or in the name of his family, or in the case of other persons such as companies or firms or any association of individuals, etc., by whatever name called, booked in its name or booked in the name of its associated entities or related enterprises, shall be considered as one allottee only. Comprehension and Discussion of Section 14 1. This section has two subsections: a. Observance of the authorised arrangements b. Conformity with the project’s requirements 2. This provision protects the Allottees from any unilateral alterations made by the Promoter to the specifications of the individual unit or to the sanctioned plans (as approved by the planning authority) of the Project as a whole. 3. The previous practise of including clauses in the Agreements reserving unrestricted rights to modify and alter the sanction plans is no longer permissible, and even if such a clause is included, it cannot be enforced due to the provisions of Section 14 of the RERA Act of 2016. 4. Before proceeding with modifications to the individual unit’s specifications, the Promoter must now obtain the consent of the individual Allottee. 5. In the event of a modification to any Sanctioned Plans (as defined in Section 2 (zq) of the RERA Act of 2016), the Promoter would be required to obtain prior approval from two-thirds of the project’s allottees, as well as ensure that such modifications are reported to the Authority and project details are modified accordingly. 6. Regardless of the number of apartments or plots, as the case may be, booked by him or booked in the name of his family, or, in the case of a company or a limited liability partnership (LLP), or its associated entities, he shall be counted as only one allottee for the purpose of determining whether two-thirds of the allottees have consented. 7. It is essential for the project’s promoters to comprehend the implications of Section 14 of the RERA Act 2016 and the compliance requirements for plan modification under RERA. 8. In the case of phased developments, the modification of plan pursuant to RERA in relation to the development plan (DP) must also comply with Section 14 Compliance. It may not directly affect the existing phase and its construction, but compliance is required due to the modification of the development plan. E.g., 1. Large undertaking with three phases, initially depicted as All three phases as residential structures. However, after considering market requirements and other factors, the promoters plan to construct a commercial block in a single phase. Change the usage of a portion of the undertaking. It must meet the requirements of Section 14 2. Modification or relocation of the primary entrance to the Project Entry. 3. Variation of Swimming Pool Specifications from those specified in the sanction plan or specifications 4. Increase in FAR or FSI or Built-up Area by adding TDR or additional FSI Non-compliance with the provisions of this section 14 of the RERA Act 2016 would allow an allottee to seek recourse by filing a complaint under Section 31 and seek compensation and/or request the Authority to direct the promoter to adhere to the sanction plan. Procedure or Process to comply with Section 14 of the RERA Act of 2016 – If the Promoter decided to modify the sanction plan or project specifications, then the following steps or processes would be required: 1. Note of proposed modification to plan or project specification describing the original and proposed modifications in detail 2. Possibility of modifying plan or project specifications with regard to statutory approvals, financial viability, and level of acceptability by project allottees, etc. 3. Inform the landowners (in the case of a JDA project) of the proposed changes to the approved plans and project specifications. Get the agreement in writing. 4. Inform all project allottees of the proposed modifications to the approved plans and project specifications. This communication must contain comprehensive details of previous and proposed details. 5. Send consent letter draughts to each project participant. 6. Obtain a minimum of two-thirds consent from the project’s allottees. Apply to various / applicable NOCs or statutory agencies and obtain their approval for the proposed modification of the plan and project specifications. a. E.g., environmental clearance, Airport Authority or SEIAA etc – as most of these NOC’s clearances shall have specific conditions that the applicant shall acquire the prior approval in the event of a change in plan sanction or terms etc., 8. Apply to the planning authority for a plan modification. 9. Upon ratification of the Plan Modification, it shall be communicated to financiers, lenders, and other stakeholders 10. Submit an application to the RERA Authority for approval of a plan modification if: a. Implementation b. Specifics about modification c. Supporting documents d. Relevant Fees 11. The authority must validate and authorise the modification of plan A. Authority may request a hearing prior to approval of b. Verify 2/3rdConsent prior to such application approval c. Publish the modified details on the portal of the Authority’s website. A Defect Liability period is a set period of time after the completion of a project and handing over of possession to the allottee, during which the builder/promoter is held responsible/accountable to the allottees, for any kind of structural defects in the project and is obligated to set right such structural defects without any further collection of money / charge from the allottee. 1. The Real Estate (Regulation and Development) Act, 2016, which is designed to establish regulation and promotion of the real estate sector in an efficient and transparent manner and to protect the interests of consumers in the real estate sector, has enacted a provision titled “Defect Liability” 2. Section 14 (3) of the Real Estate (Regulation and Development) Act, 2016 states, “In case any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale relating to such development is brought to the promoter’s notice within a period of five years by the allottee from the date of handing over possession, it shall be the promoter’s responsibility to rectify such deficiency.” 3. Prior to the implementation of this Act, the quality of construction and sense of responsibility on the part of the builder/promoter towards the allottee were a major concern in the real estate industry. The builder/promoter was not required by any Acts or Regulations to inspect the grade of construction and the materials used in a project building. Once the possession of the building was transferred to the allottee/s, the builder/promoter was not responsible for rectifying any structural defects, and the allottees were forced to rectify the structural defects again at their own expense, despite having invested large sums in the project building. Regarding the quality of construction on any project building constructed by the builder/promoter/s, the allottees lacked confidence. 4. Section 14(3) of the Real Estate (Regulation and Development) Act, 2016, now eliminates the absence of professionalism in the real estate sector and makes it mandatory for promoter/developers to rectify any construction/structural defects that may be noticed, even after possession has been handed over to the allottee/buyer/investor for a period of five years and within thirty days after the structural defect coming to the knowledge/notice of the builder and thus, making it mandatory for promoter/developers to rectify any construction 5. WHAT IS DEFECT LIABILITY/STRUCTUAL DEFECTS ACCORDING TO THE RERA ACT OF 2016? As the term “Defect Liability/Structural Defect” is not specifically defined in the Karnataka Real Estate (Regulation and Development) Rules, 2017, resulting in confusion regarding the definition, we are referring to the Rules framed by other States on the Real Estate Act, 2016, which define the term “Structural Defect” in a clear manner. 6. Telengana State Real Estate (Regulation and Development) Rules, 2017 defines “Defect Liability” in its Agreement of Sale as follows: “Structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale relating to such development is brought to the notice of the promoter within a period of five years by the allottee from the date of handing over possession, it shall be the responsibility of the promoter to rectify the defect The Telengana Rules, 2017 further define the term “Defect Liability” as follows: Notwithstanding anything contained in the preceding clause, the following exclusions are made: a) Equipment (lifts, generators, motors, STP, transformers, gym equipment, etc.) that is covered by a limited manufacturer’s warranty. b) Plumbing, sanitary, electrical, mechanical, etc. fittings with natural wear and tear. c) Permissible structural and other deformations, including the expansion factor. d) The terms of labour, such as painting, that are susceptible to wear and strain. 7. The Haryana Real Estate (Regulation and Development) Rules, 2017 (draft rules) defines “Defect Liability/Structural Defect” as, actual physical damage/ defects to the designated load-bearing elements of the building, apartment or unit like faults, breakage or cracks, appearing over time in elements such as load bearing columns, walls, slabs, beams etc. which can affect the strength and stability of the apartment or the building and shall include any of the following, namely:- (i) defects due to design attributes of reinforced cement concrete (RCC) or structural mild steel (MS) elements of an engineered (structurally designed) building structure; (ii) defects due to faulty or bad workmanship of RCC or MS work; (iii) defects due to materials used in such RCC or MS work; (iv) major cracks in masonry work that are induced as result of failures of RCC or MS work; (v) Any defect which is established to have occurred on account of negligence, use of inferior materials or non-adherence to the regulatory codes of practice by the promoter. Explanation: The promoter shall not be liable for any structural or architectural defects caused by the allottee’s structural or architectural modifications to the original specifications or design. Thus, the clause “Defect Liability” will encourage promoters to pay close attention to the quality of construction in a project, and in the event of any structural defects, it gives the allottee/buyer a five-year window to have the defects rectified by the promoter, thereby protecting the allottee’s investment and securing their interest. Best Practises – 1) Promoters must enter into contracts with Contractors / Suppliers / Service Providers with back to back quality assurance (minimum 5 years) in order to transfer defect liability. 2) If Contractors / Suppliers / Service Providers are not covered for 5 years, rely on separate AMCs to protect against and mitigate financial risks. 3) Promoters include the increased cost resulting from their liability for defects in their project costs. Reference in WB RERA Rules – Clause 6 in Agreement to Sale as notified by WB RERA – CONSTRUCTION OF THE PROJECT/ APARTMENT – The Allottee has viewed the specifications of the [Apartment/Plot] and accepted the Payment Plan, floor plans, and layout plans [annexed to this Agreement], which have been approved by the competent authority, as represented by the Promoter. The Promoter shall construct the Project in conformance with the aforementioned site plans, floor plans, and specifications. Subject to the terms of this Agreement, the Promoter agrees to strictly abide by such plans approved by the competent Authorities and shall also strictly abide by the bye-laws, FAR and density norms and provisions prescribed by the [Please insert relevant laws in force] and shall not have the option to make any variation/alteration/modification in such plans, other than in the manner prescribed by the Act, and breach of this term by the Promoter shall constitute a material breach of this Agreement.
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