Homebuyers group draw attention to loopholes in Real Estate Act

Even though the Real Estate (Regulation and Development) Bill, 2016 has become an Act on May 1, there are still some critical loopholes in it. The lacunae in the new Act is so critical that builders may use it to cover up their failures in completing the ongoing projects within stipulated time, said Abhay Upadhyay, the national convenor of Fight for RERA– an association of home-buyers.

“The draft rules show many loopholes which will let promoters of both existing and new projects escape and the intention of the Act may be defeated. It appears that there is sinister design to give undue advantage to builders especially of ongoing projects by drafting soft Real Estate Rules,” he said.

According to Upadhyay, the bone of contention is the clause that makes it must for builders to deposit 70 per cent of the sale proceeds in a separate bank account to cover the cost of construction and cost of land. “To restart and complete all stalled projects, it’s a must that critical provision of the Act, as per which 70 per cent of the money realised from allottees be kept into separate account to cover cost of construction and proportionate cost of land, is strictly followed for ongoing projects as well,” he said, adding that promoters should deposit 70 per cent of the money realised by them so far from the allottees of their ongoing projects after deducting the cost of actual physical construction and also cost proportionate land.

“This provision will ensure that Unitech like situation does not arise in future. Also, in any case, promoter has to arrange for funds to complete their projects, this provision would compel them to do it and not defer it indefinitely as being done nowadays,” he said.

Drawing attention of Union Urban Development Minister Venkaiah Naidu, Upadhyay demanded that all sanctioned plans, layout plans and specifications since launch as regards ongoing project need to be disclosed at the time of registration. The members of RERA has submitted their charter of demands to Naidu and his junior minister Rao Inderjit Singh in this regard, but didn’t get any firm commitment on the matter. The delegation met Singh on Wednesday.

Members of the association also called on Congress vice president Rahul Gandhi hoping that he would meet the delegation fighting for the rights of homebuyers. “It was very unfortunate that Gandhi scion, who had once pro-actively supported Noida flat buyers, refused to meet the delegation despite a regular follow up for the last two months. We have submitted a presentation to his office, which was acknowledged later in the day,” he said.