Loan taken to purchase land cannot be part of “Estimated Project Cost” under RERA

cashouseBy Dr Sanjay Chaturvedi, LLB, PhD

Estimated construction cost which will decide the penalty and as well as 70% escrow account withdrawal included cost of land, construction cost, overheads, interest, cess, taxation etc but do not include any amount or cost of loan / private funds and interest thereof.

In ascertaining the cost of completion of percentage of the project, the land cost shall include,-

(i) The costs incurred by the Promoter for acquisition of ownership and title of the land parcels proposed for the real estate project, including its lease charges, which shall also include overhead cost, marketing cost, legal cost and supervision cost;

(ii) Premium payable to obtain development or redevelopment rights;

(iii) Amount paid for acquisition of TDR;

(iv) Premium for grant of FSI, including additional FSI (if any), fungible FSI; and any other instruments permissible under the Development Control Regulations;

(v) Consideration payable to the outgoing developer to relinquish the ownership and title rights over such land parcels;

(vi) Amounts payable to State Government or Competent Authority or any other Statutory Authority of the State or Central Government, towards Stamp Duty, transfer charges, registration fees etc.; and

(vii) ASR linked premiums payable by any Promoter as per requirement of any Law, rules or regulations for obtaining right for redevelopment of lands owned by Public Authorities;

The cost of construction for the purpose of sub-clause (D) of clause (I) of sub-section (2) of section 4, shall include all such costs, incurred by the Promoter, towards the on-site and off-site expenditure for the development of the Real Estate project including payment of Taxes, Fees, Charges, Premiums, Interest etc. to any Competent Authority or Statutory Authority of the Central or State Government under any laws or rules or regulations of the time being in force including Principal sum and interest, paid or payable to any financial institutions including scheduled banks or non-banking financial companies etc. or money-lenders (under the Maharashtra Money-Lending Regulation Act, 2014) for the Real Estate Project, but shall not include the sum which the promoter has raised and incurred by way of loan obtained from such banks, non-banking finance companies or money-lenders, for the purpose of purchase of land for the project or for obtaining the development rights over such land.

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