The Real Estate (Regulation and Development) Act or RERA comes into force on Monday buoying home buyers while builders are busy upgrading businesses for the new regime of stricter regulatory supervision across the country, but several states have missed their October deadline and are yet to notify final local RERA rules.
States such as Assam, Tripura, Karnataka, Tamil Nadu, Punjab, Himachal Pradesh, Mizoram, Jharkhand, Telangana, West Bengal and Chhattisgarh are yet to formalise RERA rules despite being ready with draft rules. After the Act was notified on May 1, 2016, states were required to notify their final rules within six months ending October 31.
“New era begins as #RERA comes into force. Clock begins to tick for registration of projects by developers. #RERA promotes accountability, transparency & efficiency in the sector. Buyer set to be King. Promoter benefits from king’s confidence,” Venkaiah Naidu, Union minister of urban development, housing and urban poverty alleviation, tweeted.
So far Maharashtra, Uttar Pradesh, Madhya Pradesh, Rajasthan, Gujarat, Andhra Pradesh, Bihar, Chandigarh and Orissa have finalised their rules. The government had notified the final rules for the five Union Territories without legislators, and these are seen as undiluted and were expected to be a model for other states.
“There’s clearly a vacuum situation right now. The aggrieved homebuyers in such states, though, are not left without any remedy; they can still approach consumer courts for redress of their grievances. It is either for the central government to convince the states to act quickly or the honourable court may either Suo Moto or on an application, direct a timeline within which the rules will have to be notified and authority gets appointed,” said Sudip Mullick, partner at law firm Khaitan & Co.
“Under section 91the central government has powers to remove difficulties which arise in giving effect to the provisions of the Act. “The provisions of Section 91, its applicability and usage need a closer look,” he said.
Despite several states yet to notify their rules, homebuyers are pleased the central government is going ahead with the implementation of RERA on Monday. However, they are still concerned about the dilution of these rules by various states.
“We thank the central government for ensuring that RERA comes in full force from May 1, 2017. It will bring in drastic changes for the better in real estate industry by eradicating malpractices and bringing complete transparency.
However, the dark patch in the whole process is in the way the states are diluting their Real Estate Rules in favour of developers by going overboard to please their developer friends. This has the potential to render RERA completely redundant if corrective steps are not taken forthwith,” said Abhay Upadhyay, National Convenor of Fight For RERA, a pan-India homebuyers’ group.
Fight For RERA has termed state RERA rules of Orissa and Bihar as excellent set of rules that prove their commitment towards protecting the interest of homebuyers.
Realty developers are also optimistic that the rules in various states will be formalised soon as the work is almost over.
“While there are states that are yet to notify their rules, based on our interaction with the government, it’s a work in progress and we are optimistic that final rules in these states will be notified soon along with the appointment of the regulator,” said Jaxay Shah, President of Confederation of Real Estate Developers’ Association of India.