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| Sr. No. | Question | Answer |
|---|---|---|
| 1 | Is GST payable in case of Redevelopment? If yes, is it to be paid on the additional area received from the developer or on the total area? | As per the present scenario, for the existing members of the Society, GST is mostly applied on the Additional Area, though in some cases, it is found to be applied on the Total Area of the New Flats. However, this has been challenged in Bombay High Court and the proceedings are at an advanced stage. |
| 2 | Our redevelopment is completed. OC is received and we have taken possession of our flats. What precautions and procedures are to be followed for handover of building and documents related to redevelopment? | OC only indicates "Statutory Completion" of a building. However, for using it in a smooth and day to day manner, it also needs to be "Physically and Functionally Complete" in all respects. This can be ensured by undertaking internal (within flats) and external (outside flats) inspection of the building with the help of checklists followed by rectification of defects. Functional operation of various amenities and equipment should also be checked through demos. Final Approved Plans, "as-built" drawings, Certifications, Warranty/ Guarantee documents, Service Contracts, Operation Manuals etc should also be taken from the Developer. For complete information regarding the procedure to be followed and lists of handover documents in the "Repossession Phase", please visit www.redevelopment.info |
| 3 | How much is the Defect Liability Period as per RERA and which defects are covered under it? | As per RERA Clause 14(3), the Defect Liability Period (DLP) is five years from the date of handing over possession. And it covers structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement. The promoter is liable to rectify such defects at his cost within 30 days, or else compensate the purchaser appropriately. Defects which are caused by misuse or negligence on part of the flat owner are not covered.
For a Redevelopment Project, such a clause should be explicitly provided in the Development Agreement also. Moreover, some Bank Guarantee or Security Deposit should also be retained as financial security at the time of Repossession and released in stages during the DLP. If Developer has provided any warranties/ guarantees for a period longer than DLP (such as for terrace waterproofing), they shall continue beyond the DLP. |
| 4 | Our redevelopment was completed 4 years ago. We have taken possession with Part OC and Legal formalities and Handover of building are still not completed. New puchasers are also not yet added as Members.
I woulld like to know when the Defect Liability Period starts: a) From Soft Possession before Full OC, b) From Possession with Full OC but before Handover or c) From Handover more than 5 years after Possession with OC. | As per RERA which applies to purchasers from the Promoter, the Defect Liability Period (DLP) is 5 years from the "date of handing over possession". However, for a Society which undertakes Redevelopment, the DLP and its onset shall be as specified in its Development Agreement (DA).
DLP covers defects in "construction work attributable to the Developer" and excludes defects caused by misuse or negligence on part of the flat owner. Therefore, if your DA does not have a clause to the contrary, it can be presumed to have started on the date when you took Possession of your flat even, if it was a "Soft Possession", since it is now being used by you. For more understanding on DLP, Pl refer to the answer given for Q 27. |