HYDERABAD: The Real Estate Regulations Act (RERA) in Telangana will mostly be a carbon copy of the Central Act. Officials said that this is being done to avoid future litigations in the sector. However, real estate developers say that pre-RERA customers will anyway question the different terms and conditions for new property buyers from the developers.
RERA came into effect on May 1 in India, but the Telangana state government has not yet released the draft rules for the bill. The act has so far been notified in 16 states but some states including Andhra Pradesh and Karanataka have exempted the ongoing projects from RERA.
“The provision of the act is clear. Projects that are ongoing and are not yet completed or are yet to receive an occupancy certificate, have to come under RERA within three months,” said Navin Mittal, secretary of municipal administration and urban development department.
“Some states do not follow the rule that doesn’t mean we will do the same thing. If somebody does something illegal, we don’t have to replicate it. If someone goes tomorrow to the court, the court will question us as to how can we go against a Central act. The state government has the power to make rules but it cannot give out an ordinance that against the central act.
The rules have to be in conformity of the act not in its violation. RERA rules in Telangana will strictly be in conformity with the Central act,” he added.Though the industry is largely in favour of RERA, complying to the rules could prove to be a rocky road for the developers. Some developers feel it could take over six months for the sector for the transition to RERA. “In the conditions that are signed between the contractor and the customer, there will be a lot of changes in post-RERA,” said G Ram Reddy, president, Confederation of Real Estate Developers’ Association of India (CREDAI), Hyderabad.
For example, in pre-RERA, if the project is delayed by six months, a compensation has to be paid by the developer to the customer for those months. While in post-RERA, the compensation would be an interest of 12 per cent of the amount paid by the customer for the property and the customer will have to pay 12 per cent if he defers on payment too. “This would mean the terms and conditions entered with pre-RERA customers will have to change. Some customers will question this change,” he added.
Small developers to face more difficulty
With July 31 set as the deadline for real estate developers to register under RERA, the industry feels small developers will find it most difficult to migrate to the new platform. “They are not well equipped to comply with RERA. So, they will take more time for the transition. If you see the trend in Mumbai, only 300 developers have so far registered under RERA,” said Reddy.