In what will come as a relief to home buyers, the State government has finally framed rules to set up a real estate regulatory authority to safeguard their interests. Formulated under section 84 of The Real Estate (Regulation and Development) Act, 2016, the State government rules have laid special emphasis on issues related to redevelopment, which were left out of the ambit of the Central Act.
Senior officials said as many as 40 by-rules covering four important aspects were cleared on Saturday: registration of promoters and real estate agents, administrative machinery, authority and tribunals, and penalties and punishment.
While the rules will ensure a regulatory body is appointed, it will also make it mandatory for the developer to place the sale component of a redevelopment project in the public domain. Presently, in return for allotting homes to buyers, the developer gets additional floor space index (FSI), allowing him to sell the sale component after rehabilitating tenants under the rehabilitation component.
“We are making it mandatory for promoters to disclose the sale component early in the scheme, so that better transparency and accountability are maintained,” an official said.
The Housing Regulatory Bill was passed by the Centre, following which the State government passed the Maharashtra Housing (Regulation and Development) Act to set up a quasi-judicial regulatory authority to resolve disputes between developers and buyers.
The Central Act has already laid the broad framework for the rules, which come into effect by October 31. After this, regulations will be framed in three months’ time after inviting suggestions and objections from the public.
The State government rules will regulate registration of promoters and real estate agents. For example, under the Act, real estate agents will be penalised five per cent of the project cost if held guilty of providing wrong information or misguiding flat buyers. “The rules have only put together the processes for the registration of agents, while the penal actions in this regards have already been framed in the Act,” a State housing department official said.
The Housing Regulation Act is likely to streamline the city’s largely unorganised real estate sector, which has of late been hit by skyrocketing prices and lack of finance and interest in buyers. The Act also puts the onus on the promoter for time-bound completion of projects, seizure of his property and assets in case he defaults on giving possession.
“The rules will simply invoke provisions of the Maharashtra Land Revenue Code (MLRC) for seizure of property and assets of the promoter in case he doesn’t give possession of the flat on time,” an official said.
Real estate agents will be penalised 5% of project cost if held guilty of misguiding flat buyers
