Government warns states: Don’t dilute law on real estate

The Centre has warned states against any dilution of the real estate regulation law as passed by Parliament and has said any such move will have serious implications, including a public outcry. The Centre has also made it clear that all ongoing real estate projects that have not received completion certificate by May 2017 will come under regulatory mechanism.

On Tuesday, Union housing minister M Venkaiah Naidu told chief secretaries and secretaries of state housing departments that the Real Estate Regulation Act was "one of the most consumer-friendly law passed by Parliament, and states had no power to dilute its provisions". "There are a lot of expectations from this Act from all stakeholders. There are some media reports that some states have diluted a few of the Act's provisions in the rules notified by them. States don't have such powers and I hope such reports are not true. Today, I want to make it clear that any compromise with the spirit of the Act will have serious implications, including public outcry," Naidu told the state representatives.

The warning comes amid reports of some of the BJP-ruled states such as Gujarat, MP and Maharashtra diluting some of the provisions which could end up favouring builders. Even UP has come out with rules, which do not comply with the central law with regard to ongoing projects. Gujarat has also diluted this provision in favour of builders.

The ministry also turned down all proposals to amend some of the existing provisions such as bringing all projects that are built over plots beyond 500sq metre size under the law. But housing secretary Nandita Chatterjee told states that no amendments to the Act would be considered at this stage since full implementation of the Act would begin only in May.