Should delayed projects come under RERA?
Homebuyers who have invested in delayed projects have demanded that these be included in the ambit of the draft rules of the Real Estate (Regulation and Development) Act, 2016real estate Updated: Aug 12, 2016 16:12 IST
Homebuyers who have invested in delayed projects have demanded that these be included in the ambit of the draft rules of the Real Estate (Regulation and Development) Act, 2016. They have suggested to the government that developers disclose before the regulatory authority the original date of completion of the project, the delays incurred and details of the amount collected from homebuyers and spent on the project to ensure adequate balance in the escrow account for its completion. They also want projects to be handed over to buyers only after common areas and all facilities are up and running.
The buyers who have come together under the banner Fight For RERA met urban development minister Venkaiah Naidu with Rajeev Chandrasekhar, member of the Rajya Sabha Select Committee on the Real Estate Act, to apprise him of the issues faced by them.
“The draft rules do not adequately reflect protection of consumers of these delayed/incomplete projects. The suggestions submitted to MoUD minister are expected to close that gap and the final rules will reflect what consumers want. Consumers across the country will henceforth be aware of the possibilities of their rights and the obligations builders have towards them,” says Chandrasekhar.
Ongoing projects are those that have not received completion certificate prior to the commencement of RERA. Currently, there are 13,500 projects in the top eight Indian cities out of which 2,200 projects have been delayed for six to 12 months, 2,153 for 12 to 24 months and 1,486 for more than 24 months largely due to delays in approvals and cash crunch faced by developers, says real estate research firm Liases Foras.
“Draft rules have not provided for adequate protection to buyers of ongoing projects. Ongoing projects have different complexities and those need to be addressed in the draft rules,” says Abhay Upadhyay, national convenor, Fight for RERA.
Homebuyers have suggested that the developer disclose the original date for completion of the project/phase at the time of launch along with extension taken (if any) from the competent authority clearly mentioning delays since launch. The size of the apartment has to be considered on the basis of the carpet area, even it has been earlier sold on any other basis such as super area, super built -up area, built-up area etc. In case of plotted development the promoter shall disclose the area of the plot being sold to the allottees as per the layout plan, says the representation.
The promoter shall take consent of allottees within one month of the commencement of the Act in case of any alterations or additions made in the sanctioned plans, layout plans and specifications of the project or phase as the case may be, the document says.
The developers will have to specify the number of floors being constructed in a building and also disclose the number of apartments sold and available for sale in the project on each floor, carpet area of such apartments along with area of the balcony or verandah or exclusive open terrace area if any, it says.
Promoters have to give estimates of the expenditure on under-construction buildings along with all amenities that have been committed and the source from which such expenditure is sought to be financed. For ongoing projects, the promoter has to deposit in the separate bank account 70% of the amount realised for the real estate project, which has not been utilised for the completion of the project and for the land cost as on the date of the commencement of the Act and thereafter to cover the cost of the land and cost of construction, it says.
At the time of possession, the promoter shall ensure that the project is complete in all respects, including its common areas, facilities and amenities etc. before or at the time of obtaining the occupancy certificate and handing over physical positions to the allottees, says the document