Real estate news on Property consumers want ministry to tweak Real Estate Regulation Act

Regulations/ Legal aspects
Posted on Aug 31, 2016
Afraid that the Real Estate Regulation Act (RERA) might not help revive their stuck housing projects, home buyers are lobbying with the government to shine some light on the issue.

'Fight for RERA', a pan-India grouping of home buyers, met Minister of State for Housing Rao Inderjit Singh to talk about builder centric rules under the legislation which they claim will not help home buyers who are stuck in delayed projects. They, however, did not get a firm commitment from the minister. Fight for RERA members from Mumbai, Bengaluru, Hyderabad, Kolkata and the NCR also met Joint Secretary-Housing Rajiv Ranjan Mishra.

The group has highlighted that draft rules under RERA do not specify which plan builders of ongoing projects need to submit when they register with the regulator - the original, sanctioned plan or the latest version, which may have been revised several times.

They suggest that a builder, at the time of registering an under construction project with the new regulator, should submit all layout plans, sanctioned plans and specifications for ongoing project since launch.

Abhay Upadhyay, national convener of Fight for RERA, which represents more than 50 home buyer associations in the country and several NGOs, said the group put forward all its issues with the draft rules and also suggestions that would help home buyers.

"We have not got a firm commitment from the minister so far. We are hoping these highly critical suggestions find place in the final rules if the government is serious about protecting the interest of existing home buyers," he said. One of their suggestions has to do with keeping 70 percent of the sales proceeds in a separate bank account by developers to cover cost of construction and land.

"In absence of specific rules, promoters who have already collected substantial sum ranging from 70 percent to 100 percent, may keep 70 percent of future receivables which may be inadequate to complete the project since in many cases projects are not even 20 percent complete," he said.

The group has suggested that the rules under the Act should mandate promoters to deposit a sum which may be arrived at after deducting cost of construction and cost of proportionate land from the total amount collected till date from the buyers, which would force promoters to complete the project rather than deposit the money.

Home buyers also suggest that that builders should be asked to mention the original timeline for completion of the project at the time of the launch along with any extension taken from authorities when they register the project with the new regulator.

They should also be asked to give a fresh deadline for completing the project.

Earlier this month, Fight for RERA members met Housing Minister Venkaiah Naidu who had suggested they meet Rao Inderjit Singh. They had also met MP Rajeev Chandrasekhar, who was a member of the Rajya Sabha Select Committee on the Real Estate regulation Bill.

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