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A toothless regulator for the sector?

realestate Updated: Jan 13, 2015 18:55 IST
the Real Estate (Regulation and Development) Bill

When the matter of the real estate regulation bill came up for hearing before the Supreme Court on December 12, 2014, the petitioner, NGO Sarankshak was quite hopeful that the new government would take a substantive stand before the court and come up with a time frame for the enactment of a strong real estate regulatory authority. However, the submission by the additional solicitor general, that the government was working on the bill and that it would be presented before the Cabinet for certain amendments, was disappointing for not only the petitioner but millions of homebuyers who had been shortchanged by builders.

“I thought the change of guard at the Centre and the well-publicised political slogan of ‘Acche din’ (better days) would reflect in their statement in the court and the present government would not only get a timeframe in place to enact the real estate regulation bill but also pledge to bring a strong real estate regulator to look into the interests of homebuyers and do justice to them. The previous government, too, kept making similar statements at each hearing,” says Anil Karnwal, an advocate who represents the petitioner.

The case was filed in 2007 when the NGO Sangrakshak drew the attention of the Supreme Court to how realty projects were being launched without proper sanctions from the development authorities.

The report of dilution of the provisions of the regulatory bill has strengthened fears that the government is likely to further delay the final draft and may make it a toothless body which ends up serving the interests of just the developers.

“It’s a bill to protect the interest of the homebuyers and what’s surprising is that the previous government didn’t meet the representatives and federation of apartment owners to get their views. I and two other core committee members of Federation of Apartment Owners of Gurgaon had met the secretary, urban development, and apprised them of our suggestions. Besides us, the previous government didn’t consult any homebuyers’ associations,” says Lt Gen SK Bahri (PVSM), chairman of the Federation of Apartment Owners’ Association of Gurgaon.

Says Ravindra Kumar Gupta, member, Core Council, Federation of Apartment Owners’ Association of Gurgaon, “The builder lobby is pushing the government to defer the bill as long as it can on several pretexts. It goes from one committee to another only to get milder and milder. What’s the point of making a toothless regulator? Realtors have already made a strong recommendation for excluding the provisions of prosecution and jail for defaulting builders. Unfortunately, the government, which is worried about political funding instead of the homebuyers’ cause, is doing what the developers want. .”

According to Alok Kumar, president, Federation of Apartment Owners’ Association of Ghaziabad, “We have written to the ministry of urban development several times to give our suggestions on real estate regulation but we have never been consulted on this issue. The government should have identified all the homebuyers’ groups and heard their representation. The bill is for homebuyers, not for builders. It’s ridiculous that government is working on a bill to give justice to homebuyers but it’s taking inputs from builders.”

Why do we need a strong regulator?

Pre-launch - Developers launch projects without getting necessary building approvals from the authority

Unjust clauses in the builder-buyer agreement – Developers dictate terms to homebuyers through a lopsided builder -buyer agreement

Constructing illegal flats in ­violation of the sanctioned plan

Offering possession without completion certificate

Cheating homebuyers with assured return schemes

Super area fraud – Developers overcharge homebuyers in the name of super area

Handover of maintenance – Developers don’t hand over common areas and facilities to homebuyers

Delay in delivery – Developers do not deliver projects on time and sometime even refuse to pay the penalty for delay

Builders often change layout plans without homebuyers’ permission and in violation of the apartment acts