RERA ban on marketing Housing illegal: Lawyers
Recently, the government clarified that developers cannot market their projects without registering them with RERA
Jun 29, 2017
Source : ET Realty


NEW DELHI: While there is no framework ready in many states to register projects under the Real Estate Regulation and Development) Act  (Rera), prohibiting them from marketing by the government is bad in law as it affects the livelihood of developers and the workers, said lawyers.

Recently, the government clarified that developers cannot market their projects without registering them with Real Estate Regulatory Authority (Rera). The Act has been implemented by the central government from May 1. But many states are not ready with infrastructure like Rera rules, a regulator and websites to register a project online.

This has created a frustrating condition for developers who are ready with all the approvals and bank accounts to register their ongoing projects, so that they can continue with the business activities as usual. Number of developers from Noida and Greater Noida approached the interim regulator in Uttar Pradesh in Luck now to register their ongoing projects, but the authority declined saying that the required website to complete the process online is not ready.

Similar situation in prevailing in Bengaluru, Hyderabad and Chennai where the respective state governments are not ready with either Rera rules or the authority to register a project.

The authority in UP could not be contacted.

A senior counsel of Delhi high court N Hariharan said that enforcing an act in this manner where developers are ready to meet all the newly announced guidelines to continue with their business but the state governments deny them from doing so as they are not ready with the required infrastructure to register the projects. The state government must find out an interim system so that it the act can be implemented without disrupting the busi ness activities.

Partner in Shardul Amarchand Mangaldas Ashoo Gupta said that developer can approach court seeking remedy .In such situation, court can give direction to the state government to allow developers to continue business as usual with certain safeguards.

CREDAI chairman Getamber Anand said the association is pursuing the matter with the authorities. He said state government should act as a facilitator, which was the intention when they decided to implement Rera.Waiting for registration to start business activities is frustrating. He said even after Rera is formed, it will take at least a month in getting the registration number because of the huge wait list of registration seekers. Therefore, the government must suggest some way out.

Developers like RK Arora, who is CMD of Supertech, said that UP government should adopt the way Rera in Haryana is registering projects. In Haryana, final rules are yet to notify, but, the state Rera is registering projects having all the approvals with an undertak ing from the developers that they would abide by the final rules when it is notified.

The worst affected by the clarification to stop marketing till the project is registered with Rera is the ongoing projects. After demonetisation, the real estate market have started looking up as end users were coming back to buy either completed or near completion projects in May and early June. Developers had also started marketing aggressively as buyers were responding. But with the new clarification, developers cannot market which would affect the cashflow of the ongoing project.

CMD of Express Builder Pankaj Goel said that any further slowdown would affect the cashflow of a project which would further delay the completion. This will, in turn, affect the customers only . “We want Rera to be implemented as soon as possible as it will help developers regaining credibility in the market place.'' It will further help in selling flats to end users, who would have an additional cushion of assurance of Rera of timely delivery .


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