Bill sets stage for country’s first housing regulator
Jul 20, 2012
Source : The Financial Express


Mumbai: After years of deliberation, the Maharashtra Housing Bill 2012 has finally been passed by both Houses of the Maharashtra legislature. This sets the stage for the establishment of the country’s first housing regulator and appellate tribunal with significant powers to protect the consumer and penalise the builders in case of any wrongdoing. 
The Bill has laid down the rules for the promoter or builder besides providing enough teeth to the Housing Regulatory Authority (HRA) to protect home buyers from unacceptable practices of builders. 
What’s in store for home buyers 
* If a buyer has paid on the basis of advertisement and suffered a loss because of any untrue statement contained therein, he will be compensated by the promoter. 
* If the buyer withdraws from such a project, his entire payment will be returned with an interest rate not exceeding 15 per cent. 
* If any defect in the building is brought to notice of promoter within five years of possession, the promoter will have to rectify it. 
* Flat owners are not permitted to carry out alterations in the flat or building and the promoter will not be responsible for any such alterations in violation of the building regulations. 
* If an allottee or flat buyer fails to comply with provisions of agreement to sale, he/she will be liable for a penalty of up to Rs 10,000 or one per cent of the sale price, whichever is higher. 
What’s in store for promoter/builder 
* Every promoter will have to apply, along with a fee of Rs 50,000, for registering the project with HRA and displaying it on the HRA website. 
* No promoter can start sale of flats in a new project or its phases without displaying it on the HRA website. 
* The promoter shall enter into separate agreements with architect and engineers engaged for safe construction and inform the HRA about such engagements. 
* The promoter will have to take a general insurance policy for the building under construction to cover against loss by natural calamities towards the cost or replacement of the building and loss of life and injuries suffered by workers. The HRA has to be informed about the premium being paid from time to time. 
* A promoter may be liable for penalty of up to Rs 1 crore if he/she fails to comply with various Sections (9, 12, 14, 18, 19) without reasonable excuse. 
Powers to HRA 
* The HRA may cancel the registration of a project if a court of law declares that the contract, agreement, or power of attorney etc providing development right to the promoter is invalid. 
* If a promoter fails to complete the project and the HRA is satisfied that the promoter is not able to complete it, it can pass an order to form a legal entity comprising 60 per cent of the flat purchasers and appoint them as an escrow agent. They will be authorised to appoint contractors, consultants etc required to complete the construction and obtain occupation certificate. 
* The HRA may call any promoter or their representative at any time to furnish information or explanation with regard to compliance of his obligations. 
* It may also direct them to produce all documents relating to the project or flat under complaint. 
* Any person who fails to comply with the orders or directives of HRA or Housing Appellate Tribunal may be liable for imprisonment of up to three years or a penalty of up to Rs 10 lakh.

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