Among small group of states and Union
Territories to notify RERA; others could miss April 30 deadline
by Mr. Ramesh Nair, JLL India
With
Maharashtra setting up a regulator in accordance with the Real Estate
(Regulation and Development) Act – more commonly known as RERA – it
joins a small community of States that have notified their respective realty
regulators to be set up for the first time ever.
With
the April 30 deadline for all states to pass RERA for their
respective regions looming, only 13 States and Union Territories have
reportedly notified their rules so far.
While
the Centre had first shown the way to states by implementing RERA in the union
territories last year, only Uttar Pradesh, Gujarat, Madhya Pradesh, Odisha and
Delhi followed in its footsteps by notifying RERA rules in the ensuing months
for their respective regions.
Though
Maharashtra’s draft RERA rules had covered all under-construction projects,
irrespective of whether some of the individual towers/ phases received
occupation certificate or not, it had diluted some other sections.
After
activists raised objections, the Maharashtra Government decided to include
these sections too.
Similarly, buyers’ associations in both UP and Gujarat have
been demanding that the States append missing sections in the State versions.
Sixteen
other States – including Haryana, Punjab, Kerala, Rajasthan, Karnataka, West
Bengal, Bihar, and Tamil Nadu – have reportedly prepared draft rules and are
expected to notify them soon.
Protection Against Project Delays And Defects
The
Act passed by Indian Parliament last year, which was expected to be implemented
in its full entirety by all States, is very clear on the subject of
under-construction residential projects.
Developers
of ongoing projects as on the date of commencement of the Act in the respective
State which have not received a completion certificates prior to the
commencement of the Act will need to apply to the regulatory authority for
registration of their project within three months of the commencement
of the Act.
Whether
all such ongoing projects get covered under the Act will, however, depend
entirely on the respective State Governments.
The
consumer-centric law prescribes compulsory registration of all ongoing and
upcoming real estate projects, as well as penalties and punitive measures on
developers who delay their projects.
All
developers are required to disclose their project details on the regulator’s
website, and provide quarterly updates on construction progress.
In
case of project delays, the onus of paying the monthly interest on bank loans taken
for under-construction flats will lie on developers – unlike earlier, when the
burden fell on homebuyers.
A
separate account will be used to deposit 70% of the money collected for the
project’s construction, and developers can draw from it only for construction
purposes.
The appellate tribunal will hear and act on all related grievances.
RERA
also states that any structural or workmanship defects brought to the notice of
a promoter within a period of five years from the date of handing over
possession must be rectified by the promoter, without any further charge, within
30 days.
If
she / he fails to do so, the aggrieved allottee is entitled to receive
appropriate compensation under RERA.
With
the Central Government repeatedly nudging States to notify RERA latest by April
30 and establish their regulatory authorities and appellate tribunals, the
question of how many will comply looms large.
As
a disruptive and groundbreaking legislation to clear opacity in the Indian real
estate sector and make it more buyer-friendly, RERA definitely needs to be
implemented in letter and spirit by all the States.
About the author
Mr. Ramesh Nair – CEO & Country Head, JLL India
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