Flat buyers take on state regulators for their 'pro-builder' stand

NEW DELHI: All ongoing and incomplete realty projects need to be registered first (effective from May 1) and then only the builders can advertise or sell flats or properties, the real estate regulation law says. Citing this, different flat owners' organizations have challenged views of a couple of regulators' claims that ongoing projects don't have to follow norms till July 31.

Participating at an event organized by FICCI last week, recently appointed regulators from two states had also said that the builders and promoters cannot be penalized for the past delay in completion of ongoing projects. They had said the promoters can only be penalized if they fail to complete their projects within the new timelines that they provide at the time of registration of these ongoing projects.

However, two other regulators whom TOI talked to, said the law does not differentiate between ongoing or incomplete and future projects.

"All such projects have to be registered before builders advertise, sell or buy a flat or plot. The law is clear on that. Some of the newly appointed regulators misinterpreted it. The Central law has come to effect from May 1 and the provisions are binding. It will take little time for all regulators to be conversant with the nitty-gritty of the law," said one of the regulators who was also present in the conference.

Housing ministry officials concurred this as well. In fact, Section 3(1) of RERA says that in case a promoter/ builder wants to sell, he/ she will have to first register the projects. Furthermore, as regards an ongoing project a maximum of three months has been given for registration, failing which the builders will attract penalties.

"The law does not differentiate with regard to an 'ongoing project' or a 'future project', whether it is relating to disclosures, violations, penalty, interest or compensation. Hence, it clearly implies that all the penal provisions apply as much to an ongoing project as to a new project," said Abhay Upadhyay of Fight for RERA, a nation-wide flat buyers entity that had campaigned for the law.

Col T P Tyagi, president of Apartment Owners Association Federation of Ghaziabad said any attempt to exclude ongoing projects from paying penalty to consumers for delay in delivery is in contravention to the Central law. "The whole purpose of the law will be defeated. RERA clearly says that the developers will submit the original timeline of a project while registering their properties so that compensation can be worked out," Tyagi said.

Supreme Court lawyer M L Lahoty said that such interpretation of Act is only aimed to "suit the convenience of one of the stakeholders - builders, much at the peril of suffering homebuyers."

Also Read: All about how the new Real Estate Act impacts homebuyers