Should de­layed projects come un­der RERA?

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De­vel­op­ment) Act 2016, which is ex­pected to in­clude pro­vi­sions for com­pen­sa­tion and pun­ish­ment.

In­ter­est­ingly, none of the projects in UP have been handed over within 24 months of the builder re­ceiv­ing the com­ple­tion cer­tifi­cate. Cu­ri­ously, no rules spec­ify how builders are to be pe­nalised in such cases.

The Al­la­habad High Court (HC)in March this year di­rected a Noida builder to speed up a project de­layed by over four years. It also asked the state govern­ment for is­suance of guide­lines for the implementation of the pro­vi­sions of Sec­tion 4 (5) as it (state govern­ment) has power un­der Sec­tion 27 to is­sue di­rec­tions for the ef­fi­cient ad­min­is­tra­tion of the Act to the com­pe­tent au­thor­i­ties.

The 20 home­buy­ers had in their writ pe­ti­tion to the HC said that “Noida Au­thor­ity has acted con­trary to the statue in al­low­ing the pro­moter to de­lay the project for over four years whereas the pub­lic pol­icy man­dates com­ple­tion of project within a pe­riod of 24 months, thereby frus­trat­ing the in­tent of the leg­is­la­tion.”

Sec­tion 4 ( 5) of t he UP Apart­ment Act states that “an apart­ment may be trans­ferred by the pro­moter to any per­son only af­ter ob­tain­ing the com­ple­tion cer­tifi­cate from the pre­scribed sanc­tion­ing au­thor­ity con­cerned as per build­ing byelaws. The com­ple­tion cer­tifi­cate shall be ob­tained by the pro­moter from pre­scribed au­thor­ity within the pe­riod of two years from the date of the sale agree­ment.”

Ac­cord­ing to S K Pal, Supreme Court lawyer, the UP Apart­ment Act al­ready has some strin­gent pro­vi­sions with re­gard to any de­lay in com­ple­tion of the project. How­ever, it has noth­ing to say on the quan­tum of the pun­ish­ment and com­pen­sa­tion which have been clearly pro­vided for in RERA. Home­buy­ers who have in­vested in de­layed projects have de­manded that th­ese be in­cluded in the am­bit of the draft rules of the Real Es­tate ( Re gu­la­tion and De­vel­op­ment) Act, 2016. They have sug­gested to the govern­ment that de­vel­op­ers dis­close be­fore the reg­u­la­tory au­thor­ity the orig­i­nal date of com­ple­tion of the project, the de­lays in­curred and de­tails of the amount col­lected from home­buy­ers and spent on the project to en­sure ad­e­quate bal­ance in the es­crow ac­count for its com­ple­tion. They also want projects to be handed over to buy­ers only af­ter com­mon ar­eas and all fa­cil­i­ties are up and run­ning.

The buy­ers who have come to­gether un­der the ban­ner Fight For RERA met ur­ban de­vel­op­ment min­is­ter Venka­iah Naidu with Ra­jeev Chan­drasekhar, mem­ber of the Ra­jya Sabha Se­lect Com­mit­tee on the Real Es­tate Act, to ap­prise him of the is­sues faced by them.

“The draft rules do not ad­e­quately re­flect pro­tec­tion of con­sumers of th­ese de­layed/ in­com­plete projects. The sug­ges­tions sub­mit­ted to MoUD min­is­ter are ex­pected to close that gap and the fi­nal rules will re­flect what con­sumers want. Con­sumers across the coun­try will hence­forth be aware of the pos­si­bil­i­ties of their rights and the obli­ga­tions builders have to­wards them, says Chan­drasekhar.

On­go­ing projects are those that have not re­ceived com­ple­tion cer­tifi­cate prior to the com­mence­ment of RERA. Cur­rently, there are 13,500 projects in the top eight In­dian cities out of which2,200 projects have been de­layed for six to 12 months, 2,153 for 12 to 24 months and 1,486 for more than 24 months largely due to de­lays in ap­provals and cash crunch faced by de­vel­op­ers, says real es­tate re­search firm Li­ases Fo­ras.

“Draft rules have not pro­vided for ad­e­quate pro­tec­tion to buy­ers of on­go­ing projects. On­go­ing projects have dif­fer­ent com­plex­i­ties and those need to be ad­dressed in the draft rules,” says Ab­hay Upad­hyay, na­tional con­venor, Fight for RERA.

Home­buy­ers have sug­gested that the de­vel­oper dis­close the orig­i­nal date for com­ple­tion of the project/ phase at the time of launch along with ex­ten­sion taken (if any) from the com­pe­tent au­thor­ity clearly men­tion­ing de­lays since launch. The size of the apart­ment has to be con­sid­ered on the ba­sis of the car­pet area,


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