Maharashtra Bill :Paves the Way For The establishment Of India’s first Regulator for the Real Estate..!

Lack of transparency in the Indian real estate sector has been talked about for long and the creation of a housing regulatory body has been discussed both at the central & state level.The Maharashtra Housing Regulation and Development Bill passed by the state assembly on recently  paves the way for the establishment of the country’s first regulator for the real estate sector.The Bill, which now goes to the state legislative council, aims to bring about transparency in the real estate sector and empower house buyers. It also attempts to demystify some of the popular & often misused terms used in the sector, such as carpet area, built-up and super built-up area.

Ownership of Land..!

The Bill makes it mandatory for builders to make complete disclosure regarding housing schemes or projects they are developing, where they are required to provide details of ownership of land, number of flats going to be built, FSI ( floor space index ) applicable for a particular housing project, how they are going to finance the project among other clauses. These details will be published by the regulator on its website before giving approval to a project.

The Bill also prohibits property developers from selling / advertising the housing scheme before it receives approval from the regulator. The Bill also asks them to mention separately, how much they will charge for common areas such as staircases, lifts, parking area etc. and not mislead buyers by using terms such as built - up and super built - up area.

Doesn’t Address the Issue of Approval Delays

Mr. Anuj Puri, chairman, Jones Lang LaSalle India, a property advisory said, “It’s a clever Bill. But it doesn’t address the issue of approval delays in Mumbai due to which projects get held up . The impact of the Bill would be significant on house buyers because the regulator ensures financial prudence and they will know that their money is going into the project and not for some other purpose"The Bill also seeks to ensure that developers make their promises realistic and deliver projects on time. It also imposes penalties &  fines for those who fail to comply with the various provisions such as failure to give possession within the period mentioned in the agreement between the buyer and builder. The regulator can also impose a fine of up to Rs.10,000 for each day of delay.

The Bill prevents the builder from giving possession of flats to buyers till an occupation certificate (certificate stating building is fit for occupation) is obtained from the local authority. Also, 10% of flats in a project will be with the regulatory authority, till the occupation certificate is obtained.

Setting Up Rating System..!

The decisions of the housing regulator can be challenged before a housing regulatory appellate authority that will also be set up. The Bill mandates the regulator to promote energy efficient or green buildings &  asks it to create regulations that are consistent with the NBC (national building code) & rules and regulations framed by the state governments and municipal bodies to bring consistency and remove ambiguities. Setting up a rating system for projects may also be given as a mandate to the regulator.

Mr. Boman Irani, Secretary, MCHI (Maharashtra Chamber of Housing Industry), said, ''Imposing a fine on the developer is not fair because it is only a part of the real estate sector.I am in favour of the Bill provided it does not produce pressure only on developers because they are dependent on banks, government policies & even customers to develop and deliver a project."

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