Amidst hope, arm-chair criticism and loud sighs of dismay, the government of Haryana finds itself mulling over the enforcement of the Haryana Real Estate (Regulation and Development) Bill, 2013, which seeks to instil accountability and transparency in the real estate sector. In a sector that is largely unregulated, the Bill promises reprieve for the common citizens by providing stricter enforceability norms. At the heart of the Bill lies the establishment of the Haryana Real Estate Authority. The authority acts as a sentinel and an advisor. As an advisor, the authority has been given the daunting task of advising the state government in matters concerning real estate development. While in its role as a sentinel, the authority protects the harassed citizens from the poisonous mist of insufficient disclosures.
With the enforcement of the new Bill, all builders and real estate developers would be mandated to register their real estate projects with the authority. Upon registration, the authority would publish the details of the real estate projects on its website and maintain a record of the details provided. This should ease the discomfort of consumers burdened with incomplete information on investment projects. No longer would discretion be given to builders to disclose information on a need-to-know basis.
Another key highlight of the Bill is the introduction of the term promoter. The term doesnt have the same meaning as presented under the Companies Act, 1956, but has carved its own space. A promoter under the Bill, inter alia, is defined to mean a person constructing a building, apartment or developing a colony. It covers any development authority or other public body constructing buildings or apartments on land either owned by them or placed at their disposal by the government. The definition has been given a wide connotation to bring within its ambit state level cooperative housing societies that construct apartments or buildings for its members or allottees. The reason for defining the term promoter could be to ensure that entities or persons categorised under it receive a certification from the Real Estate Authority before booking, selling or offering to sell any immovable property. However, a certification is not required in all forms of development. Some categories have been exempt from obtaining a certification such as those where the proposed development is less than 1,000 square metres, or the number of apartments developed is not more than 12. Exemption may also be granted where the promoter has received an occupation or completion certificate from the competent authority prior to the enactment of the Bill. Renovation or repair would also not attract certification as long as no re-allotment or marketing of the immovable property takes place.
The legislation is given teeth through the penal consequences that ensue on its non-adherence. When the promoter wilfully defaults in complying with the process of registration, the defaulter could be fined up to 10% of the estimated cost of the project.
Immense powers have been given to the authority while handling promoter registrations. The authority has been given the right to revoke registration on complaint or recommendation of competent authorities. The competent authorities could complain on grounds such as wilful default of the promoter, violation of agreements between the promoter and the competent authority, and unfair practices or irregularities by the promoter. Once the registration has been revoked, the authority would include the name of the concerned promoter in the defaulters list.
Keeping in line with the spirit of transparency, the authority would be obligated to maintain a database containing details of the defaulters including project details, cancelled registrations and the reason for penalisation. The particulars of the defaulters would also be made available on the website of the authority. Needless to mention, the authority would have the right to conduct inquiry and ensure compliance with all registration norms.
The Bill also looks at the setting up a Real Estate Appellate Tribunal consisting of a chairperson and at least two members. Out of the two members appointed, one would be a judicial member and other would be a technical or administrative member. Orders of the tribunal would be enforceable as the decree of a civil court. A limitation period of 60 days is given for an appeal to the tribunal.
In conclusion, we find that after much negotiation, debating and turning our hair grey, the government has finally taken a strong unprecedented stance in a sector that has witnessed a lull in enforcement measures. While some reforms appear rigid or unfair, the overall intent is positive. It is left to be seen whether the Bill would see the light of day.
Sidharrth Shankar is partner with J Sagar Associates. Bharat Bhushan of J Sagar Associates contributed to this article. Views are personal