Apartment ownership bill to increase cost of housing projects: Developers
The Rajasthan Apartment Ownership Bill 2014, approved by the state cabinet on Monday, is all set to increase financial burden on the end usersjaipur Updated: Feb 25, 2015 16:09 IST
The Rajasthan Apartment Ownership Bill 2014, approved by the state cabinet on Monday, is all set to increase financial burden on the end users.
The developers and promoters are also sceptic about certain provisions and claim that the onus has entirely been put on the developers. The bill, however, aims to spell out rights and responsibilities of developers and buyers.
In a new provision, a developer will have to get land converted from lease hold basis to free hold basis before executing a Deed of Agreement. Earlier, the developers had to pay lease fee for eight years in flexible mode. Now, the fee period for free hold basis has been increased to 16 years and the developer has to pay it in one go. The lease hold basis provided land rights up to 99 years while free hold basis provisions land rights for lifetime.
The lease fee, usually 5% of the reserved price of land, varies area wise and is paid by the developer before construction.
“It will increase revenue of the government but put extra burden on the end users or buyers. Moreover, one-time payment system will stop regular income to local authorities as fee for 16 years for a project will be submitted in a one go,” said Gopal Gupta, chairman CREDAI (Confederation of Real Estate Developers’ Association of India).
Gupta said the new bill silent on penalties if an occupant fails to pay maintenance charges. “There should have been balance in rights of developers and buyers in the bill,” Gupta said adding that they had put their case before the government when the bill was being prepared.
Atma Ram Gupta, chairman of ARG Group, is also concerned about maintenance fee. “The bill has not specified action against defaulters. There is need to focus on this point,” he said.
The bill only mentions that apartment association or society can stop, withhold or curtail essential supply if an apartment owner fails to pay common expenses for a period of more than six months.
Welcoming the bill, director of Ashadeep Group Anil Kumar Gupta, said the buyers would get proper information about built-up area, facilities and their rights. “Most of the developers follow these rules but there are some who do not. Now, the right of land will get clarified,” he said.
Apartment owners are also hailing the bill but are worried about the fee for free hold basis that would be applicable for already constructed apartments also.