Tiff between builders, govt hots up as realty regulator takes off

NEW DELHI: With most big states setting up the realty regulator as mandated under the Real Estate Regulatory Authority (RERA) Act, developers have slowly started facing the heat.

So far, 24 builders/realtors’ associations across five cities in Maharashtra, Madhya Pradesh and Karnataka have moved the high courts in their respective states, challenging the constitutional validity of some of the sections of the landmark realty law.

This includes the clause that puts ongoing projects — started before the law was passed but yet to get completion certificates — under the ambit of the regulator.

As a counter measure, the Union housing and urban affairs ministry moved the Supreme Court last Thursday, seeking to get all cases transferred to the apex court. “The SC is likely to hear the transfer petition soon,” said a government source.

Since May 1, the deadline fixed for states to set up the regulator, over 18,600 projects — most of them ongoing — were registered or where applications have been received for registration across eight states and UTs.

The Act mandated that all ongoing and new projects have to register with RERA. For ongoing projects, the deadline for registration was July 31. Without registering, developers cannot market their project. Violation will invite penalty of up to 10% of the project cost.

Maharashtra, with one of the largest property markets in the country, has taken the lead with 13,000 developers registering their projects. “Of these, 12, 500 are ongoing. We do not have a database of all ongoing projects but according to the information we have, our guess is that close to 90% of the big ongoing projects have already applied for registration,” said Gautam Chatterjee, chairman of Maharashtra RERA.

He added, “We have also received 52 complaints from buyers and disposed of some. As of now, on a case to case basis, we are imposing graded penalty between ₹50,000 to ₹10 lakh.”

The UP RERA had till last week registered 1,850 ongoing projects and received 125 complaints. UP RERA covers the realty market in Noida and Greater Noida, where several ongoing projects — such as the Jaypee Wishtown project — are delayed. In Haryana, 502 developers have applied for registering projects. In MP and Karnataka, so far 1,500 and 1,150 projects, majority of them ongoing, have been registered.