Civil Law

Define Promoter under the Real Estate Regulatory Authority Act,2016, and state his functions and duties.

Functions and Duties of a Promoter Under RERA Introduction : Real Estate Regulatory Authority Act The Real Estate (Regulation and Development) Act, 2016 governs major issues related to the real estate sector in India, such as delays in possession, lack of transparency, hidden charges, and unfair trade practices. The Act aims to regulate the real estate sector and protect the interests of homebuyers. Apart from regulating projects and real estate agents, the Act also lays down detailed provisions regarding the functions, duties, and liabilities of promoters. In this article, we will understand who a promoter is and discuss the important functions and duties of a promoter under RERA. Who is a Promoter? Before understanding the functions and duties of a promoter, it is important to understand the meaning of the term “promoter.” The definition of promoter is provided under Section 2(zk) of the RERA Act. According to the Act, a promoter is any person or entity that develops or constructs a real estate project for the purpose of sale. The definition of promoter under RERA is very broad and includes: Thus, even if a person is not directly constructing the project, but markets or sells it as a developer, such person may still be treated as a promoter under the Act. Functions and Duties of a Promoter (Sections 11–18) A promoter performs several important functions and duties under RERA. Sections 11 to 18 of the Act deal with these obligations to ensure transparency, accountability, and protection of allottees. The major functions and duties of a promoter are discussed below. 1. Creation and Maintenance of Project Web Page One of the primary duties of a promoter is to create and maintain a webpage for the project on the RERA website. This responsibility includes: The promoter must provide accurate and updated information so that potential buyers can make informed decisions. 2. Disclosure in Advertisements and Prospectus Under RERA, promoters are required to disclose all important project-related information in advertisements and prospectuses. The promoter must clearly mention: This provision helps buyers verify project authenticity and obtain complete information before investing. 3. Information at the Booking and Allotment Stage At the booking stage, the promoter is required to provide all essential information related to the project. Such information includes: A promoter cannot invite buyers or sell units without disclosing the required information. Failure to comply with these requirements may attract penalties under the Act. 4. General Responsibilities of the Promoter Apart from specific duties, promoters are also required to fulfill several general responsibilities under RERA. These include: These responsibilities ensure fairness and accountability in the real estate sector. 5. Certificates and Maintenance of Records The promoter is responsible for obtaining and providing all necessary certificates and documents to the allottees. These may include: The promoter must also maintain all required records and documents related to the project. 6. Formation of Association of Allottees It is the duty of the promoter to facilitate the formation of an association, society, or cooperative society of allottees. The promoter is expected to take necessary steps to ensure that the association of allottees is properly formed for future management and maintenance of the project. 7. Conveyance and Payment of Outgoings The promoter is required to execute proper conveyance deeds and maintain all related records and documents. Additionally, the promoter must: This protects the interests of the allottees and ensures legal clarity regarding ownership. Liability of Promoter for Non-Compliance Failure to perform the functions and duties prescribed under RERA may make the promoter liable for penalties, compensation, or even imprisonment in certain cases. The Act imposes strict obligations on promoters to ensure: Conclusion The functions and duties of a promoter under RERA play a significant role in ensuring fairness and transparency in the real estate sector. Sections 11 to 18 of the Act clearly define the responsibilities of promoters and hold them accountable for any default or non-compliance. These provisions help protect the interests of allottees and promote trust and confidence in the real estate market.