How states shortchange homebuyers by taking the sting out of RERA

The law to protect interests of home-buyers and regulate the real estate sector may end up as another lame legislation without enough power.

Till Saturday, 13 states and Union territories had notified their final rules, and most have diluted key provisions of the law. Each state and UT will have its own Regulatory Authority (RA) which will frame regulations and rules according to the Act.

Few states such as Odisha and Bihar have notified rules that are completely in sync with the one notified by the Union Ministry of Housing and Poverty Alleviation.

Below is how several states have diluted an otherwise powerful law:

Haryana
The Haryana government has let off most ongoing housing projects which have been delayed and remain a worry for many home buyers in its draft rules for the RERA.

The draft RERA rules seek to exclude projects which have applied for occupancy certificate or part completion certificate, provided it is granted by the competent authority within three months of the application.

It also excludes projects which have received completion or part completion certificate in case of plotted colony and occupancy certificate for the building blocks of integrated complexes like group housing, commercial, cyber park or cyber city.

However, the Haryana government has invited objections or suggestions in 15 days.

Gujarat
The Gujarat rules exempt all projects launched before November 2016 from RERA, says a report by moneycontrol.com.

Uttar Pradesh
The norms related to compounding of offences have been diluted as no specific amount has been mentioned. There is provision for "up to" (a certain amount), which means it may even be zero. This means the quantum of money to be paid will be at the discretion of the authority.

The UP government has incorporated a clause that seeks to exclude projects that have applied for (but not received) completion certificates, projects where conveyance deed has been executed with 60 per cent buyers and incomplete projects where maintenance has been handed over to association of allottees, says a moneycontrol.com report.

Also the UP RERA rules have to be read in conjunction with amendments to the Apartment Act under which there is no control or restriction over the completion time of a project and the changes a builder can make.

The UP rules do not have any reference to the rate of interest at which the money has to be refunded to home-buyers as against the central RERA Act under which developers will now be required to refund or pay compensation to the allottees with an interest rate of the State Bank of India’s highest marginal cost of lending rate plus 2 percent within 45 days, says the report.

However, Chief Minister Yogi Adityanath recently assured a delegation of homebuyers an undiluted version of the RERA in Uttar Pradesh.

Delhi
The Urban Development Ministry has allowed relaxation even in Delhi, where rules specify that promoters need to provide details of only those court cases which have been disposed of during the last five years. This is despite the housing ministry clearly stating that builders need to provide details of all pending cases.

Maharashtra
A provision has been included to allow builders to take out or divest from a project after occupancy certificate has been issued. This means the builder can pull out its entire investment before completion of common areas, facilities and amenities.

Madhya Pradesh and Rajasthan
The draft rules of Madhya Pradesh and Rajasthan are a replica of the Union government’s ‘flawed’ draft rules instead of the final undiluted rules that were brought out on October 31, 2016, says the moneycontrol.com report.