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Monday, Aug 26, 2019

Bad news for home buyers: States fail to set up real estate regulator

The deadline ends April 30 but only Madhya Pradesh has set up a real estate regulator so far.

india Updated: Apr 10, 2017 21:50 IST
Moushumi Das Gupta
Moushumi Das Gupta
Hindustan Times, New Delhi
States’ failure to have a regulator in place by April 30 will render ineffective the Centre’s law to protect homebuyers and regulate the real estate sector.
States’ failure to have a regulator in place by April 30 will render ineffective the Centre’s law to protect homebuyers and regulate the real estate sector.(HT photo )

The failure of most states to put in place a regulator ahead of the April 30 deadline has put a question mark on the Centre’s effort to protect home buyers by giving them a platform to resolve disputes quickly.

Madhya Pradesh is the only state to have set up the real estate regulatory authority (Rera), a year after Parliament passed a law to regulate residential and commercial projects and protect the interests of buyers who often complain of delays and cost overruns.

“We have written to states, held multiple national and regional consultations to ensure they expedite the process. But we have not got response from some states, including West Bengal,” said a housing and poverty alleviation ministry official.

The real estate regulatory authority act that came into force on May 1, 2016, provides for a regulator in states to oversee transactions and settle disputes.

States were given a year to get the regulator in place. Without these regulators, the realty law will be ineffectual.

Builders have to register a project coming up on 500sq m or more with the regulator before they launch or even advertise their plan.

Only Madhya Pradesh had set up the Rera, minister of state, housing and urban poverty alleviation Rao Inderjit Singh told the Rajya Sabha on April 6. India has 29 states and seven union territories, which are administered by the Centre.

Some states and UTs such as Delhi, Chandigarh, Haryana, Maharashtra, Punjab, Kerala, Rajasthan and Andaman & Nicobar Islands have put in place an interim regulator.

States can name any officer, preferably from the housing department, as the regulator to hear buyers’ complaints till a Rera is set up.

In the absence of the Rera, developers won’t have to register projects if they complete it before the regulator is notified. The law covers new as well as those projects where completion certificate has not been given. A buyer hit by delays won’t get any relief.

This is not all. Many states are still to notify the rules, without which the realty law can’t kick in. Madhya Pradesh, Uttar Pradesh, Gujarat, Andhra Pradesh, Odisha and Delhi are the only ones to have drawn up the rules.

While states had to frame their own law using the central act as a template, the rules for the UTs were notified by the Centre. States can make changes to the central law but they can’t completely dilute the parent act.

Consumer groups are up in arms in states such as Gujarat, Uttar Pradesh and Maharashtra against the dilution of provisions dealing with ongoing projects, alleging those were tweaked to favour builders.

Fight for RERA, an umbrella body of more than 100 home-buyers’ associations from across India, had in November written to Prime Minister Narendra Modi and the chief ministers of UP and Gujarat, saying the changes would render the new law “redundant”.

Though the deadline was 20 days away not much was expected as setting up a Rera takes time, sources said.

As of now, the real estate sector is largely unregulated and courts are the only place where a buyer can take a complaint, which can take years in India’s notoriously sluggish judicial system.

First Published: Apr 10, 2017 12:36 IST

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