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EXIT OF THE DEVELOPER FROM THE PROJECT MID-WAY


 Can a real estate developer exit the project mid-way by selling to another developer or party UNDER RERA

Under the Real Estate (Regulation and Development) Act (RERA), a real estate developer cannot exit a project mid-way without appropriate measures and compliance with the regulations. RERA has provisions to protect the interests of homebuyers and ensure the completion of real estate projects. Here are some key points regarding a developer's exit from a project under RERA:

1.    Prior Consent of Homebuyers: If a developer intends to exit a project mid-way by selling it to another developer or party, they are generally required to obtain the prior consent of the homebuyers who have invested in the project. The consent of a specified percentage of homebuyers, as mentioned in the RERA rules of the concerned state, is typically required for such transactions.

2.    Transfer of Rights and Liabilities: In case of an approved transfer of the project, the developer exiting the project is required to transfer all rights, title, and interest in the project to the new developer or party. This includes transferring the rights and obligations towards the homebuyers, such as completion of construction, delivery of units, provision of amenities, and adherence to the terms of the buyer agreement.

3.    Approval from Regulatory Authority: The transfer of a real estate project mid-way requires approval from the respective state's RERA regulatory authority. The authority may examine the financial capabilities, track record, and reputation of the new developer or party before granting approval for the transfer.

4.    Protection of Homebuyers' Rights: RERA mandates the protection of homebuyers' rights in case of any transfer or exit of the developer. The new developer or party acquiring the project is responsible for fulfilling all obligations towards the homebuyers as per the terms of the buyer agreements and RERA regulations.

5.    Disclosure to Homebuyers: RERA requires the developer to disclose the details of the transfer or exit, including the new developer or party's identity, financial capabilities, and any changes in the project's plans or timelines, to the homebuyers. This disclosure ensures transparency and enables homebuyers to make informed decisions.

It's important to note that the specific rules and procedures regarding a developer's exit and project transfer may vary between different states' RERA regulations. Therefore, it is advisable to refer to the RERA rules and regulations of the specific state for accurate and detailed information regarding the process and requirements for a developer's exit from a project under RERA.

ADV LEENA KAULGEKAR

 


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