Thousands of real estate projects across the country could be stuck for want of registration with the Regulatory Authority mandated to be set up under the Real Estate Act by July 31. With less than 20 days left for the deadline to expire, only two BJP-ruled States of Madhya Pradesh and Maharashtra have set up the Regulatory Authority forcing Union Urban Development Minister Venkaiah Naidu to shoot off a letter to all Chief Ministers asking them to ensure its establishment. Though a few States have set up an interim authority, none has set up the Appellate Tribunal. All the States and Union Territories have to approve the regulation, notify the rules, appoint regulators and operate regulatory authorities also by July 30.
"If the Rules are not notified under the Act immediately and the Regulatory Authority established by July 2017, with a functional website for project and agent registration, there would be a serious disorder in the sector. If the promoters of real estate projects are not able to register their projects for want of Rules and Rogulatory Authority in the State / UT, the responsibility for violation of the Act would fe squarely on the State / UT Government," Naidu said in the letter.
"This is in continuation of his letter dated June 21 on the Real Estate (Regulation and Development) Act 2016 requesting immediate notification of rules and establishment of Regulatory Authority and Appellate Tribunal in States/UTs. As per section 3 of the Act, a maximum time period of three month has been given under the Act for ongoing projects to register with the Regulatory Authority of the respective states and UTs," the letter said. Interestingly BJP ruled states Goa and Haryana have yet to appoint Regulatory Authority.
According to Ministry's officials, once a regulator is in place, and agents get registered, it would become difficult for the agents to mislead the homebuyers. The Act also provides for penalties and imprisonment for agents who violate any of its rules and regulation. For instance, real estate agents will have to pay a fine of Rs 10,000 for violating any provisions of the Act, for each day the violation continues; or face imprisonment of up to one year.
Sometimes, in order to convince homebuyers to buy a property, agents may manipulate information. For instance, they may say that very few units of a project are left for sale, or that the developer would raise the price in a few days; to pressurise the buyer into making a decision in a hurry. Pushed into rushing, some buyers could forego basic due diligence on their part. However, once the regulator is in place, homebuyers will be able to cross-check most of this information on the regulator's website.
According to Housing and Urban Affairs Ministry, 21 States have notified the Real Estate Regulatory Authority (RERA) rules, include Uttar Pradesh, Gujarat, Odisha, Andhra Pradesh, Maharashtra, Madhya Pradesh, Bihar, Chhattisgarh, Rajasthan, Uttarakhand, Assam, Jharkhand, Punjab, Tamil Nadu, Karnataka, NCT of Delhi (by Mo/UD); Andaman & Nicobar Islands, Chandigarh, Dadra & Nagar Haveli, Daman & Diu and lakshadweep.