Boost for homebuyers: As states keep ongoing projects by builders out of RERA, panel sees red

Surbhi Prasad

A parliamentary committee has pulled up state governments — particularly Haryana, Uttar Pradesh and Gujarat — for failing to bring ongoing real estate projects under the provisions of the Real Estate (Regulation and Development) Act, 2016. In a report tabled in the House recently, the Committee on Subordinate Legislation headed by BJP MP Dilipkumar Mansukhlal Gandhi, has asked the state governments to take all possible remedial measures to ensure that the ongoing projects are brought under the ambit of the Act in a bid to extend the stipulated benefits to homebuyers under RERA.

The committee has also directed the ministry of housing and urban poverty alleviation to ask the state governments to amend or formulate the rules under RERA in such a way that there is no ambiguity regarding the definition of “ongoing projects”.

“The rules notified by some of the states are not in consonance with the spirit of the Act and have resulted in the dilution of the effectiveness of the Act while observing that such works have been skewed in favour of builders, hurting consumer interests, particularly in areas like definition of ongoing projects, penalties for non-compliance with the Act and dealing with structural defects,” it said.

Both Haryana and UP have decided to keep outside the purview of RERA projects that have been issued, or have applied for, occupancy certificates. This is a significant difference from the Central RERA notified on May 1 this year that had completion certificates as the benchmark for exemption. Gujarat has diluted the key provision regarding punishment to the developer for non-compliance.

On the delay in framing the rules, the committee expressed its dismay over the fact that even after a lapse of one year and two months, many states have not notified the rules. It further said any delay in framing of rules thereunder will have the effect of depriving the public legitimate rights intended to be conferred on them under the provision of the Act.

The committee has urged the ministry to give all other states to a target date for setting up a regulatory authority and an appellate tribunal. Till such time the appellate tribunal is set up, the states should have an interim body to discharge its duties, it said.

The Act came into force on May 1, 2017. However, its implementation got off to a slow start with 11 of 28 states yet to notify the final rules as of July 31. Just seven have functional websites and four have permanent regulators.

The committee also pulled up the ministry for not constituting a Central Advisory Council as laid down in the Act. “This proves beyond doubt that the ministry’s approach is very casual and it has not paid any serious attention towards the constitution of Central Advisory Council expeditiously,” it said.