BHUBANESWAR: The long-awaited bill to amend the Odisha Apartment Ownership Act, 1982, is scheduled to come up in the assembly during the monsoon session, which started on Tuesday.
The bill will make formation of association of apartment owners (AAOs) a compulsory and time-bound process .
The Odisha Apartment Ownership (Amendment) Bill, 2015, is a crucial piece of legislation to streamline community living amid the mushrooming of apartments in the cities.
According to the amendment bill, the developers have to submit an undertaking in a prescribed form (to the appropriate government authorities) to form AAOs.
The declaration has to be made before construction of any apartment to be used for residence, office or trade. They also have to spell out transfer of right, title and interest in the property within such period as specified in the undertaking. The AAOs should be registered under the Registration of Societies Act, 1860.
The developers also have to declare whether the land is leasehold or freehold making it transparent for the prospective buyers.
Real estate market insiders feel the proposed changes would come as a breather for home buyers. The developers have a tendency to retain control over the apartments as long as possible. Hundreds of apartments in Bhubaneswar don't have registered AAOs.
"The mandatory provision will protect buyers' interest and nail the black sheep in the real estate sector," said Pradipta Biswasroy, president of Real Estate Developers Association of Odisha (Reda).
The buyers of properties have to be compulsory members of the AAOs and abide by the bylaws.
The buyers not obeying the apartment rules and developers contravening the provisions of the amended Act would face fine up to Rs 1 lakh (compared to Rs 5,000 in the existing law).
Though the existing Act has the provision to form AAOs, it has not specified when it should be formed and under whose initiative. As a result, many developers choose to skip it, said an insider.
The cabinet had approved the draft amendment, (first mooted in 2011), during the last term of the government on December 20, 2013.
The state government had engaged CRISIL, a policy advisory company, to help making the required changes in the apartment ownership Act.
The CRISIL had done a comparison of apartment ownership Acts of Maharashtra, Bihar and Odisha before preparing the draft.