Real estate regulatory authority is a step in right direction
Purchase agreements were standard across developers and usually weighted in their favour.columns Updated: May 03, 2017 23:39 IST
Anyone who has had anything to do with buying an apartment in Mumbai or the larger Mumbai Metropolitan Region (MMR) would be familiar with the purchase agreement and the process of signing and registering it. It is a document in which the buyer could only ascertain that names are correctly spelt, initial every page, and sign at required places. Which one of us read, or was allowed to read, it in toto and change clauses before signing?
These agreements were standard across developers and usually weighted in their favour. There was little to nothing we could do when possession was delayed or extra charges levied. Though there were penalties for the developer for these and other defaults, there were loopholes which made it difficult to invoke them. Buyers have had horror stories but little recourse to action – except consumer courts where the process is cumbersome and time-consuming.
With the Maharashtra Real Estate Regulation and Development Rules 2017 finally coming into effect, the situation should change. At least, we can hope so. The state housing department notified the Rules last week. The regulatory body is expected to start functioning from May 1.
The state’s RERA Act and Rules, as they are popularly called, were supposed to follow the template laid down by the Centre. However, the state government’s draft Rules were diluted and so builder-friendly that the purpose of the Act was nullified. Consumer groups, especially Mumbai Grahak Panchayat, called out the duplicity of the Devendra Fadnavis government, lobbied hard for amendments, and argued for clauses to protect the interests of buyers.
The notified Rules are an improvement over the draft Rules. They demand that developers disclose all details of ongoing and new construction projects on the RERA website and update them every quarter; the information includes the title of each property, plans and layouts, and total number of flats with their carpet areas; developers must also disclose details of real estate agents, architects and engineers involved in projects as well as their companies’ annual reports with profit-loss statements and so on.
The Rules have norms for agreements and delayed possession, formation of the housing society once 51% of the apartments are sold, and stipulate that the conveyance of the plot must be done within three months from date of occupancy. Also, developers and real estate agents have to register on the website.
The Rules appear fair. But developers and real estate industry’s representative bodies have already cried foul saying they are too consumer-friendly and that the registration fees along with mandated requirements will pinch the industry. This is to be expected. The industry had fended off all previous attempts to regulate it and empower the buyer-consumer.
The RERA is a good and long overdue step but whether the Rules will bring sanity and fair play into the developer-buyer equation will depend upon a number of factors: How the regulator functions in the first few months, what kinds of orders are issued on cases brought to the authority, how its mandate is enforced, and how susceptible it is to possible pressure from the developers’ lobby.
At the minimum, it ensures transparency about developers, their projects, documentation such as plans and sanctions which they were reluctant to share, and offers a recourse to buyers. It’s a first step in the right direction. Dare we say that buyers need not be at the developers’ mercy anymore?