1. Despite Narendra Modi govt vow, home-buyers still suffering as rules being tweaked to favour real-estate developers

Despite Narendra Modi govt vow, home-buyers still suffering as rules being tweaked to favour real-estate developers

At what could be a setback for the Narendra Modi-led government, five states are diluting the rule brought into effect by the NDA government to regulate the real-estate sector in May this year.

By: | New Delhi | Updated: December 30, 2016 5:27 PM
Real Estate Similarly, in Delhi, the Union Minister of Urban Development has issued watered-down rules.

At what could be a setback for the Narendra Modi-led government, five states are diluting the rule brought into effect by the NDA government to regulate the real-estate sector in May this year. Moreover, three of these states being ruled by the NDA, who have changed the meaning of this landmark legislation in their version of rules. Similarly, in Delhi, the Union Minister of Urban Development has issued watered-down rules.

The rules were notified by Ministry of Housing and Urban Poverty Alleviation in October under the Real Estate (Regulation and Development)  Act (RERA), which are applicable to Union territories without their legislature and meant to serve as a template in other states. The states are issuing their rules one by one and Maharashtra is the latest one to adopt the rules, while BJP-ruled Gujarat and Madhya Pradesh have notified the rules during the preceding one month with non-NDA states Karnataka and Uttar Pradesh. On the other hand, Urban Development Minister, which is being headed by Venkaiah Naidu, has twisted the criteria set by housing ministry.

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The changed rules effectively favour real-estate developers while the home-buyers, for whose protection the Act had been formulated, remain under uncertainty about their investments.

According to the sources, the PMO has asked the housing ministry to submit a report on whether the states have indeed violated central provisions. “States can make their own rules as per the needs but they are not supposed to violate the norms of parent rules,” said a spokesperson.

What is the rule

Under RERA, all builders are required to register their ongoing and upcoming projects with Housing Regulatory Authority and provide public disclosure on the regulator’s website. And violations of Act, even a misdemeanour, can lead to revocation of the registration of project with jail term up to three years for the builder. While Maharashtra’s rule exempts the builders from providing the related information.

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Similarly, Madhya Pradesh’s rule allows builders of ongoing projects to keep under wraps. And, Gujarat enforces the Act on the project launched after November 2016, which is not less than an exemption.

Karnataka’s rules have made several concessions for builders with ongoing projects while UP has taken several ongoing projects out of regulatory body’s purview as well as decreased the penalty for offences.

The Data compiled by Liases Foras shows how critical are the things, when home-buyers in the eight states, including Gujarat, Mumbai and Delhi-NCR, face delay in the delivery of the homes from few months to over five years.

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