Home buyers seek Real Estate (Regulation and Development) Act draft rules review
The government put up draft rules for public comments on June 24 and deadline for public feedback is July 8.
Jul 02, 2016
Source : ET


NEW DELHI: A group of home buyers has claimed that the draft rules for the Real Estate (Regulation and Development) Act circulated by the government recently ignores the interest of buyers in ongoing housing projects and should be reconsidered. 

The group, under the banner 'Fight for RERA,' pointed out that the draft rules don't specify which plan builders of existing 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. 

"Promoter may file the last sanctioned plan, layout plan and specifications with the regulator, which may be completely different from what was promised to consumers at the time of booking, and thus escape from being penalised as the requirements under this section have been complied with," said Abhay Upadhyay, national convener of 'Fight for RERA’.

He said promoters should submit the original plans and specifications, along with all the subsequently changed plans not only to maintain transparency but to give a clear picture to the regulator with regard to compliance with Section 14, which says a proposed project will be developed and completed by the promoter in accordance with sanctioned plans, layout plans and specifications as approved by the competent authorities. "In the absence of specific rules on this, penalty under section 60 and compensation under Section 71 for violation of section 14 (1) cannot be enforced," he said. 

Upadhyay said there is no clarity about the schedule of completion for ongoing projects, many of which have been delayed. "Promoters need to provide schedule of completion which was given at the time of booking, subsequent dates when project got delayed along with time period within which he undertakes to complete the project in future. In absence of this specific rules, again penalty under section 60 cannot be imposed," he pointed out. 

Since the draft rules were made public last month, members of 'Fight for RERA' have been running a campaign on Twitter trying to seek an appointment with urban development minister M Venkaiah Naidu to discuss these aspects of the rules that they say need reconsideration. 

Sahil Sethi, senior associate at law firm Saikrishna & Associates, explained that even in the absence of RERA, aggrieved buyers in ongoing projects can get recourse over plan changes through existing state legislations. The government put up draft rules for public comments on June 24 and deadline for public feedback is July 8. 

Sethi said the regulatory act draft rules are generally silent on existing projects. "But hopefully once notified, the rules should provide clarity on how penalty under different sections of the act will be invoked in the case of ongoing projects," he said. 

The draft rules, said Upadhyay, don't say how 70% of the proceeds from a project will be deposited by the developer in a separate account to meet land and construction costs in the case of projects currently under way. 

It also does not provide clarity on whether home buyers are entitled to compensation for changes in the sanctioned plan, layout plan and specifications that were made by the builder to a project before it was registered with the regulator. As per Section 14 (2) (ii), such changes need the written consent of at least two-thirds of the home buyers in the project. 

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