Extension of the Timeline under RERA Due to COVID-19

In the year 2017, the real estate sector was brought under the RERA regulations to ensure transparency and accountability. Under these regulations, the individual states and union territories can establish their own rules within the broad framework set by the Centre.

As a significant relief to the real estate sector amidst the COVID-19 pandemic, the Finance Minister announced that COVID-19 would be treated as a ‘Force Majeure’ event. Accordingly, the timeline for the completion of real estate projects has been extended by six months. This extension aims to provide crucial support to developers facing unprecedented challenges due to the pandemic.

Following the Finance Minister’s announcement, the Ministry of Housing and Urban Affairs issued an advisory, which is taken up and explained in detail in this article. Explore how the advisory impacts developers and the real estate sector.

Analyzing the RERA Advisory on Extension

On May 13th, 2020, the Ministry of Housing and Urban Affairs issued an advisory to state governments, designating the COVID-19 pandemic as a ‘Force Majeure’ event under Section 6 of the Real Estate (Regulation and Development) Act, 2016.

To protect the interests of all stakeholders, the advisory allows RERA regulatory authorities to implement the following measures across the states and union territories:

Automatically extend the registration/completion date by six months due to COVID-19 using Force Majeure provisions under RERA.
Consider extending the timeline for a further three months based on the situation of their respective states, with reasons annotated in writing.
Issue new Registration Certificates with revised timelines for applicable projects.
Extend the timeline for all statutory compliance relating to RERA provisions.

Unless explicitly prescribed otherwise by the respective state or union territory regulatory authority, the advisory applies to registered projects with completion/revised/extended dates expiring on or after March 25th, 2020.

This advisory helps avoid multiple applications from promoters and developers requesting timeline extensions. Following this, the Rajasthan Real Estate Regulatory Authority extended the timeline by twelve months for projects registered before March 19th, 2020.

Before the advisory, states like Maharashtra, Gujarat, and Tamil Nadu had already given extensions of three to six months. It will be interesting to observe their responses following the issuance of this new advisory.

Analyzing the Effect of Extension on Developers

The COVID-19 pandemic and the subsequent lockdowns have adversely impacted the real estate sector. The recent announcements and the RERA advisory offer significant relief, as developers won’t face penalties or litigation during the extended period for project completion.

Developers should take note of these key points regarding the advisory:

The extension is automatic; developers aren’t required to submit an application to claim it.
Respective state regulatory authorities will issue fresh registration certificates with revised timelines. Consequently, all statutory compliance timelines get extended.
If developers need further extensions beyond the default ones, they must apply under Section 6 of the Act.

Understanding these guidelines helps ensure smooth real estate registration processes and compliance for ongoing and upcoming projects amidst these uncertain times.

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Frequently Asked Questions

Common questions about Extension of Timeline Under RERA.

The RERA advisory issued by the Ministry of Housing and Urban Affairs on 13th May 2020 clarifies that the COVID-19 pandemic should be treated as an event of 'Force Majeure' under section 6 of the Real Estate (Regulation and Development) Act, 2016. It allows regulatory authorities to extend the registration/completion date of real estate projects by six months automatically, and by a further three months based on the situation in their respective states.

The RERA advisory was issued to protect the interests of all stakeholders in the real estate sector, which has been adversely affected by the COVID-19 pandemic and the subsequent lockdown. It aims to provide relief to developers by allowing them an extension in project completion timelines, avoiding penalties or cases against them for the extended period.

Unless otherwise prescribed by the respective state/UT regulatory authority, the extension is applicable for registered real estate projects whose completion/revised/extended date as per the registration expires on or after 25th March 2020.

The advisory permits regulatory authorities to extend the project completion timeline automatically by six months on account of the COVID-19 outbreak, applying Force Majeure provisions under RERA. Additionally, they can consider an extension of a further three months based on the situation in their respective states.

No, developers are not required to make an application for claiming the default extension of six months. The regulatory authority will issue a fresh registration certificate with the revised timeline for eligible projects.

Yes, the RERA advisory states that concurrently, the timeline for all statutory compliance relating to provisions of RERA may also be extended by the regulatory authorities.

The Rajasthan Real Estate Regulatory Authority has issued an order providing an extension of twelve months to all projects registered before 19th March 2020. Some states like Maharashtra, Gujarat, Tamil Nadu, and Gujarat had already granted extensions of three to six months before the RERA advisory.

Yes, if developers require any further extension beyond the default extension period, they will have to apply for the same under section 6 of the Real Estate (Regulation and Development) Act, 2016.

The extension will provide great relief to developers as no cases can be registered against them for the extended period, nor will they be accountable to pay any penalty to the regulatory authority or the buyers due to project delays caused by the COVID-19 situation.

Developers should note that the extension is available by default, and they do not need to apply for it. The regulatory authorities will issue fresh registration certificates with revised timelines for eligible projects, and statutory compliance timelines will also be extended concurrently.