In 2009, Avadhesh Agarwal, 35, paid Rs. 2.8 lakh as instalment towards a flat in a project coming up near suburban Kalyan. Three years later, the project was grounded because the developer could not get clearances.
“I got the money back, but could not invest elsewhere. By then, real estate prices there had doubled,” Mr. Agarwal, who works for a private firm, says.
In a city where real estate prices are among the highest in the world, many like him are hoping the country’s first real estate regulator will control the powerful builders’ lobby. Maharashtra will be the first State to appoint one as the Maharashtra Housing (Regulation and Development) Act, 2012, received Presidential assent this week.
The Act makes it mandatory for developers to disclose property title and layout and completion plans to buyers. The project details have to be registered with the regulatory authority and will be displayed on its website.
Refund for delay Developers will be responsible for fixing major defects that crop up in the building during the first five years and may have to refund buyers for delayed projects. The regulator has the powers of a civil court and can impose fines of up to Rs. 1 crore and prison terms up to three years.
“This is a landmark Act for boosting transparency and protecting buyers,” Minister of State for Housing Sachin Ahir says. The Centre is mulling over similar legislation, which will take precedence, if passed.
“Pricing issue not addressed” Critics say that unlike the telecom and power regulators, the housing regulator does not address the critical issue of pricing. “The main problem in Mumbai is the lack of affordable housing. How does this law change that?” housing activist Chandrashekhar Prabhu asks.
Activists feel the new law does not improve on the existing Maharashtra Ownership Flats Act, 1963, much. “The earlier legislation allowed for criminal complaints against developers. The new Act allows for imprisonment only if the orders of the regulator are not complied with. This weakens the consumer’s position,” Shirish Deshpande of Mumbai Grahak Panchayat says.
The Act excludes large housing stock from its purview: houses built by the State-run Maharashtra Housing and Development Authority (MHADA) and City and Industrial Development Corporation of Maharashtra (CIDCO). Also, the rehabilitation component of redevelopment projects, which form the bulk of construction in the city.
Builder groups are unhappy with additional regulation. They say this will delay projects and raise costs.
Additional reporting
by Ramnath Subbu
