BENGALURU: A people’s organisation, Fight for RERA, which has been in the forefront of the movement demanding strict provisions under the Real Estate (Regulation and Development) Act, 2016 (RERA), plans to move the Supreme Court as it feels the provisions okayed by the Karnataka Cabinet on Wednesday greatly dilutes the Act.
Under the provisions okayed by the state government, a property will be excluded from the purview of RERA if the sale deed has already been executed or if 60 percent of the project work has been completed. According to Law Minister T B Jayachandra, the rules under the Act will be notified soon.
The convener of Fight for RERA-Karnataka chapter, M S Shankar, said, “The state government has snatched away the basic rights of citizens. There are so many cases where builders abandon a project after 60 percent completion.” He added that following Rajasthan’s model, which the state government said it did, wasn’t wise as Bengaluru, unlike the western state, is a major real estate market in the country.
It’s just not home buyers. All stakeholders in the real estate business — builders, developers, agents and buyers — are unanimous in recognising the Act’s importance, but also feel its finer aspects are biased, particularly the provisions approved by the government. Another big question is how the government plans to measure the percentage, but Jayachandra has promised more clarity in the coming days.
Chief Executive Officer of Brigade Group (residential projects) Om Ahuja summed up the positive aspects of the Act, saying, “The passing of RERA is a positive step for both the consumer and the industry. Three ‘T’s (Transparency, Trust and Timely Delivery) will now become a reality. RERA will bring transparency into the sector which will attract large institutional players and open up the flood gates for foreign direct investments. Trust and timely delivery will help consumers in a big way.”
A member of the management committee of Honey Developers said for all its good aspects, the Act lacked safeguards against builders getting exploited, and, at the same time, made it easier for builders to exploit consumers.
He said, “Builders can face delays due to several issues, such as frivolous litigation, labour issues, lack of sales and strikes, but there’s no provision in the Act for our safeguard. The 60 per cent completion rule helps builders play around with buyers, as it is the remaining 40 per cent which takes a much longer time.”
He singled out a provision under the Act for praise, as per which, complaints registered by consumers with the regulatory authority have to be disposed of within two months.
Farook Mahmood, world president-elect of the international real estate body FIABCI, termed the Act “the best thing for the industry as real estate was an uncontrolled and unregulated industry.” “We needed the accountability and transparency this Act brings in,” he said.
Mahmood said the Act had flaws because it has been perceived only from a macro level. As an example, he said if any builder, developer or agent defaults, then all the parties are held liable, which is unfair. “Why are only agents charged fees? This sounds unconstitutional. It also makes it tough for agents, especially the smaller operators, to thrive,” he said.
What is RERA?
The Real Estate (Regulation and Development) Act, 2016 (RERA) is a long-pending Act approved by the state cabinet on Wednesday. It is formulated to safeguard the interests of buyers of real estate commodities, to protect them from exploitation and to bring more transparency in the industry. States can alter certain rules under the Act. Under the Act’s provisions, all transaction details pertaining to major construction projects will have to be uploaded on the RERA website.
Properties covered/exempted under RERA
If the area of construction is over 500 sqmt or if it has more than eight apartments, it will come under RERA. If the sale deed has been executed or if 60 per cent of the project has been completed, then RERA won’t apply for the project.