Home buyers left in the lurch as Haryana govt ‘dilutes’ RERA Act

Real Estate Story from Gurugram.  Photo by Manoj Kumar

Real Estate Story from Gurugram. Photo by Manoj Kumar

After several lakhs of aggrieved home buyers in Gurugram and other parts of Haryana hoped for relief with the Centre’s announcement of the Real Estate (Regulation and Development) Act in 2016, their situation now looks grim with the State government announcing a “diluted” Real Estate (Regulation and Development) rules, 2017.

More escape routes

The Centre had made it mandatory for all projects without completion certificate to be registered under RERA as a ray of hope for home buyers grappling with prolonged delay in flats' possession, consequent financial hardships and inadequate infrastructure. However, the Haryana government’s RERA rules have let a majority of the ongoing projects off the hook by allowing the projects even with part completion certificate and occupation certificate out of the ambit of the new law. In a major escape route for the developers, the Haryana government has kept even those projects out of the purview of RERA where merely applications have been moved seeking part-CC/CC and OC.

Now, a vast majority of builders in the State have applied for the OC for their existing projects to keep themselves out of the ambit of the new law.

“Buyers like me who suffer years of delay in possession of flats had huge expectations from the RERA when it was notified by the Union government, but Haryana RERA rules have left us disappointed. The Haryana government has diluted the RERA by changing the eligibility criteria from CC to OC. This has been done intentionally to favour builders whose projects have not been completed even after years of delay,” said RP City Welfare Association president Pardip Rahi. He holds a flat in the under-construction project of Ramprastha City in Sector 37-D, running almost four years behind schedule.

‘Mere eye wash’

As per the Haryana RERA Rules, if the application seeking grant of part-CC/CC or OC is refused by the competent authority, the developer would be bound by the law to register himself under the RERA within a month. However, former Chief Town Planner, Haryana, Raj Vir Singh, dismissed the clause as mere “eye wash”. “The application seeking OC is hardly ever rejected and mere observations are conveyed to the builder and time allowed to remove the shortcomings. Since the developer has no incentive to urgently seek the certificate, he can delay the process endlessly by not submitting the requisite documents in the first place or even resort to unfair means,” he said. He added that even if the application is rejected, the developer can make an appeal to the Commissioner, a decision on which could take another couple of years.

“After the decision is made at the Commissioner level, the builder can even move court. So there is enough opportunity for the builder to buy time for completing his project without registering himself under the RERA,” said Mr. Singh, adding that the provision was nothing but an attempt “to derail the whole process”.

Since the projects with even part-CC/OC are now out of the RERA, Mr. Singh argued that there would be no compulsion on the part of the builders to provide the promised common services like community centres, clubs, health centres and electrical infrastructure to the residents. “There are many conditions to seek part-CC/CC and OC for different projects such as plotted development and group housing, but there are some minimum requirements. Even if the builder has not provided the common facilities he can seek part CC/OC and stay out of the RERA.”

Compensation denied

Casting doubts over the intentions of the Haryana government and the developers, Mr. Singh sought to know why the projects without CC were kept out of the purview of the new law. “If the intentions of the builders are good and they are willing to complete the project, then where is the need for the government to keep the incomplete projects out of the purview of the new law? The builders actually do not want to address the grievances of the residents for inadequate infrastructure,” he said.

With most of the real estate projects in Haryana now outside the purview of the new law, lakhs of flat buyers in these projects are also deprived of increased compensation for the delays as promised under the RERA Rules. Though the builders usually offer only ₹5-10 per sq feet compensation for the delay, the compensation under the new law has been fixed at 2% over the highest marginal cost of lending by the State Bank of India.

Objections to draft rules

Besides, the Haryana RERA rules do not specify that the cost of flat will be as per the carpet area and that the builder cannot charge parking cost for the common area, leaving more loopholes for the developers.

Gurgaon Citizens' Council president R.S. Rathee said that they had filed objections to the draft rules in May this year, but got no response from the authorities. Most of their objections were also allegedly not incorporated in the final RERA rules. He also accused the government of intentionally omitting the words such as “schools”, “community centres” and other community buildings from the definition of “amenities” in Section 14 (b) (vii) of the RERA rules to benefit the builders. Mr. Rathee said the new law had done more harm than good to the consumers.

Website on RERA soon

Mr. Rathee said the council was considering moving the Punjab and Haryana High Court on this matter.

Real estate experts believe that the flat buyers in the new projects were also not slated to benefit much under the new law. They also suggested that the best way out was to decide on a mutually agreed timeline for the completion of the project at the time of the grant of licence, in consultation with the developer, and take penal action against the builder for not adhering to it. The government should also not grant any fresh licence to the builder in case of violation of timeline for the earlier project, the experts said.

Executive Director, RERA, Haryana, Dilbag Singh Sihag said only 35 builders had registered themselves under the RERA so far and 484 more applications were under scrutiny. Mr. Sihag said that developers could register under the RERA even after the July 31 deadline after paying a penalty. He said the website providing details of the developers registered under the RERA and other information would be launched in 3-4 months.

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Printable version | Jul 3, 2022 4:27:16 am |