MUMBAI: The state government will this week finally approve the new Real Estate (Regulation & Development) Act (RERA), meant mainly to protect flat buyers from being short-changed by developers. Media has learnt that the state plugged most of the pro-builder clauses in the draft rules following an uproar from consumer rights groups and housing activists. This newspaper had first exposed the major loopholes and lacunas in the draft rules notified last December.
CM Devendra Fadnavis said the file containing the final rules was sent to him last Friday. “I am likely to approve them in a day or two,” he told media on Monday. “Maharashtra’s RERA rules will come into effect from May 1,” confirmed Gautam Chaterjee, a retired bureaucrat now designated by the government as the state’s regulatory real estate authority.
Government sources said most of the objections and suggestions submitted by consumer groups like Mumbai Grahak Panchayat (MGP) have been incorporated in the revised rules awaiting the CM’s approval. A clause that angered housing activists was the one which allowed a builder to terminate a flat purchase agreement by giving just a week’s notice on email to the buyer who defaults on an installment. The developer could refund the money without interest to the purchaser at leisure, within six months.
However, sources said this controversial clause has now been modified. “The builder can send a termination notice only if a flat buyer defaults the third time on payment. The developer will have to give 15 days’ notice to the buyer,” he said.
RERA rules framed by the Centre say the builder must refund the money within 45 days (with or without interest, depending on the situation) and do not stipulate cancelling the agreement within seven days in case of default. “We have now almost aligned the state rules with those framed by the Centre,” said a government official.
The state is also believed to have rectified another controversial clause which said that builders pay the registration fee at just Re 1 per square metre. This means for a 1,00,000 square feet project, he has to pay approximately Rs 10,000. “The state has now decided to amend this rule, fixing the rate at Rs 10 per square metre for registration. The amounts will vary from a minimum of Rs 50,000 to Rs 10 lakh,” said the state official. Central rules prescribed fees of between Rs 5 lakh to Rs 10 lakh for residential and commercial projects.
The state has also slashed by half the fee an aggrieved property buyer must pay while filing a complaint with the housing regulator. The fee has now been reduced from Rs 10,000 to Rs 5,000 following objections by consumer activists. Central rules fixed a fee of Rs 1,000 for filing complaints before the housing authority.
In another crucial decision, the state RERA rules will also apply to people residing in rehabilitation buildings. The draft rules earlier had left out such people in case they had any grievance against a developer. The MGP had protested against this clause, stating that if such an exemption was allowed, people residing in rehabilitation buildings would be deprived of any relief under RERA. “This was not the intention of Parliament,” it said.
The state has also made it mandatory for every builder to put up online his work record and project experience of the past five years. This information will have to be updated every quarter. Once the state rules come into force, sources said every developer will also have to publicly display his company’s statement of account audited by a chartered accountant.
The Central rule requires a builder to submit an annual report including profit and loss account, balance sheet, cash flow statement, directors’ report and auditors’ report for the preceding three financial years, among other things. The Maharashtra draft rule was earlier silent on such a requirement.
Credits ET Realty