The draft rules for the much awaited real estate regulatory authority are here. The government took its time in bringing them out, but not everyone seems to be happy about it.
There have been claims, from home buyers of course, that the rules have given an escape route, from imprisonment, to builders. While the act talked about a three-year jail term for erring builders, the rules have proposed a compounding fine. Builders can get off by paying 10% of the cost of a project.
This isn’t the only thing that home buyers are unhappy about.
The rules, one had hoped, would provide clarity on the status of under construction projects, where the real problem exists today. Hundreds of projects across the country are delayed and home buyers have been left in the lurch.
Does a builder disclose previous changes made to an existing under construction project or simply register with the latest sanctions? If consent to change a layout of a new project is required to be taken from two-thirds of the buyers, does it apply to an existing project as well, and how?
Also, when an already delayed project is registered with the regulator, does the builder pay penalty for the delay according to the new act?
New projects need to set up a separate account where 70% of the proceeds from the sale of apartments in the project will go towards land and construction costs. How does that work for existing projects, especially in cases where the builder has already collected, say, 90% of the money from home buyers?
These are some of the questions being asked but the rules are silent on them.
The government is seeking comments on the draft rules till July 8 and one hopes that the final rules that will be notified will have answered these questions since the regulator’s aim is not just to safeguard those who will buy homes in the future but also the interests of those who have bought in the past but are still to get delivery of their dream homes.
Here’s to hoping that the end result will be a tight, all-encompassing set of rules that will provide clarity on how each aspect of the act will be implemented rather than leaving too many of them open-ended for the courts to later adjudicate and clarify.
We all know how that usually ends up.
Issue of under-construction projects and leniency in RERA