Banking Law, Corporate Law

Rights and obligation’s of Developer under Apartment Act and RERA

Rights and obligation’s of Developer under Apartment Act and RERA –

The rights & duties of a developer under the Apartment (Flat) Ownership Act and the Real Estate (Regulation and Development) Act (RERA) has been defined. In general, both the Apartment Act and RERA aim to regulate the real estate sector and provide protection to buyers and investors. While the Apartment Act focuses on the development and ownership of apartments or multi-unit buildings, RERA encompasses a broader scope, including both residential and commercial real estate projects. Law of Real Estate Regulatory Authority (RERA) is established for regulation of the real estate sector in each State of India, it also acts as an adjudicating body for speedy dispute resolution.

Apartment (Flat) Ownership Act came in force to provide ownership on an individual apartment in a multi-storied building and of an undivided interest in the common areas and facilities appurtenant to such apartment and to make such apartment and interest heritable and transferable and for matters connected therewith or incidental thereto.  ‘Agreement for development and construction of building’ is made mandatory registered under this act. The Promoters/developers have to obtain completion certificate after construction of building. 

It can be said that Apartment Act and Real Estate (Regulation and Development) Act facilitated the purchaser in different ways.

In Jharkhand (India), the rights of a developer under the Apartment Act and the Real Estate (Regulation and Development) Act (RERA) are governed by the Jharkhand Apartment (Regulation and Promotion of Construction, Sale, Management, and Transfer) Act, 2017, and the Jharkhand Real Estate (Regulation and Development) Rules, 2017, respectively. Here are some key rights typically provided to developers under these laws:

  1. Right to development: Developers have the right to undertake the construction, development, and sale of apartments in accordance with the approved plans and as per the provisions of the Jharkhand Apartment Act.
  2. Right to obtain necessary approvals: Developers have the right to obtain necessary approvals, permits, and clearances from the competent authorities, such as the Jharkhand Real Estate Regulatory Authority (RERA), as required by law.
  3. Right to advertise and sell: Developers have the right to advertise and market their apartment projects, subject to compliance with the advertising guidelines and regulations specified by RERA.
  4. Right to form an association: Developers have the right to establish and register an Association or society of apartment owners as per the provisions of the Jharkhand Apartment Act, which governs the management and maintenance of the common areas and facilities of the apartment complex.
  5. Right to receive payments: Developers have the right to receive payments from buyers or investors as per the agreed terms and conditions, including the payment schedule and instalment payments outlined in the apartment sale agreements.
  6. Right to rectify defects: Developers have the obligation to rectify any structural defects or deficiencies in the construction or common areas of the project during the specified warranty period, as provided by the Jharkhand Apartment Act.
  7. And the most important Rights to transfer/sale the Apartment/flat by the Developer is defined under Sec. 5 of Jharkhand Apartment (Flat) Ownership Act, 2011. Whereas It is provided to get the Development Agreement registered mandatorily.  


Sec. 5 of Jharkhand Apartment (Flat) Ownership Act, 2011 is as under– 

  1. Where the Developer /promoter is not the owner of the land over which the Apartment (Flat) is to be built, the Developer/Promoter and the Owner shall execute and register an Agreement stating all the terms and conditions of the agreement including the portion of the building and land to be shared by the Developer/ Promoter and the owner.

The agreement document shall also include that after the completion of construction of the building project the respective share owner i.e.; developer/promoter and the land owner, shall be absolute owner of their respective shares and will be entitled to sell/transfer their shares separately.

  1. The Final sale/lease of the Apartment (Flat) along with the Common areas and facilities shall be executed and registered by the Developer /promoter or the owner, as the case may be, as per Sub-Sec. 5.1 in favour of the prospective Apartment (Flat) Owner.

Responsibility of Developer/ Promoter-  

These are some of the key responsibilities of developers under RERA in Jharkhand. It is important for developers to comply with these regulations to ensure the protection of homebuyers’ interests and avoid any legal issues or penalties :- 

RERA (Real Estate Regulation and Development Act) is a central legislation in India that aims to protect the interests of home buyers and promote transparency in the real estate sector. While RERA is a central law, each state in India may have its own rules and regulations under RERA.

  1. Registration: Developers are required to register their real estate projects with the Jharkhand Real Estate Regulatory Authority (RERA). This applies to projects that exceed a certain size or number of units, as defined by the state rules.
  2. Project Details: Developers must provide complete and accurate details of the project, including the layout plan, schedule of completion, approvals, land title, and other relevant information. This information must be uploaded on the RERA website.
  3. Advertisements and Promotions: Developers must ensure that all advertisements, brochures, and promotional materials related to the project are true, accurate, and in line with the registered project. They should not make any false claims or misrepresentations.
  4. Escrow Account: Developers are required to open a separate bank account for each project and deposit at least 70% of the project funds received from buyers into this escrow account. This is to ensure that the funds are utilized only for the specific project and not diverted elsewhere.
  5. Timely Completion: Developers must complete the project within the agreed-upon timeline mentioned in the sale agreement with buyers. Failure to do so may result in penalties or other consequences as specified under RERA.
  6. Quality and Specifications: Developers are responsible for constructing the project as per the approved plans and specifications. The quality of construction should meet the standards set by the relevant authorities.
  7. Structural Defects and Maintenance: Developers are liable for any structural defects or deficiencies in the project for a period of five years from the date of possession. They must rectify such issues within a reasonable time.
  8. Transparency and Documentation: Developers should maintain transparency by providing regular updates to buyers regarding the progress of the project. They must also maintain all necessary records, agreements, and documents related to the project and make them available to buyers and the regulatory authority when required.
  9. Dispute Resolution: Developers should cooperate with the Jharkhand Real Estate Regulatory Authority in case of any disputes or complaints raised by buyers. They must comply with the orders or directions issued by the authority.

It’s important to mention here that developers’ rights and obligations are balanced by the corresponding rights and protections provided to buyers and investors under the Jharkhand Apartment Act and RERA. These laws aim to promote transparency, fairness, and accountability in the real estate sector.

To have a comprehensive understanding of the specific rights and obligations of developers under the Jharkhand Apartment Act and RERA, it is advisable to refer to the actual legislation, consult legal professionals experienced in real estate law, or reach out to the Jharkhand Real Estate Regulatory Authority (RERA) for accurate and up-to-date information.

Adv. Manoj Kumar