A new ray of hope
Regulation of real estate sector in West Bengal heralds an era of accountability, efficiency, and transparency, writes Sanjay Basu.
The West Bengal Housing Industry Regulation Bill, 2017 ("WB Housing Regulation Bill") appears to mark the beginning of a new era of accountability, efficiency, and transparency. The main object and purpose of the WB Housing Regulation Bill is to establish a regulatory authority in order to regulate and promote the housing sector and ensure the sale of plot, apartment, building, or real estate project in an efficient and transparent manner. Primarily, the WB Housing Regulation Bill seeks to clean up the murky real estate sector from the unscrupulous developers by ensuring the protection of the buyers/consumers and also by establishing a mechanism for speedy dispute redressal.
In essence, the provisions of the WB Housing Regulation Bill are similar to the provisions of the Real Estate (Regulation and Development) Act, 2016, enacted and implemented by the Central Government ("RERA"). Therefore, it is imperative to highlight the following significant provisions of the WB Housing Regulation Bill:
The promoter shall register such real estate projects with the regulatory authority which have plot size of 500 (five hundred square metre) or 8 (eight) apartments unless otherwise notified by the Government;
The promoter shall not be entitled to advertise, market, sell or invite persons to purchase the plots, apartments or buildings in any real estate project without registering the real estate project with the regulatory authority;
The ongoing projects for which the completion certificate has not been issued, will be required to be registered with the regulatory authority;
4Each phase of the real estate project will be considered a standalone real project;
4The promoter shall be entitled to make only minor changes for architectural reasons without making any major structural changes in the plot, building or apartment;
4If the promoter contravenes the registration requirements, he shall be liable to pay fine up to ten per cent of the estimated project costs or be punished for a jail term of three years;
4The promoter shall not accept deposit of more than 10 (ten) per cent of the cost of the building, plot or apartment without first entering into an agreement for sale with the buyer;
4The agreement for sale shall be in a specific form as may be specified;
4The promoter shall deposit seventy per cent of the amounts realised from the buyers in a separate account to cover the construction cost and the land cost;
4The promoter shall create his web page on the website of the regulatory authority and enter all details of the proposed project; and
4The promoter shall be liable to rectify any structural defects within the period of 5 (five) years from the date of handing over possession to the buyers. Also, if the promoter fails to rectify the structural defects within a period of thirty days then the aggrieved buyers shall be entitled to seek compensation.
Although the West Bengal Government has drafted the WB Housing Regulation Bill in accordance with the spirit of RERA, other states such as Maharashtra and Gujarat, Odisha and Uttar Pradesh have invited much flak from different segments of society for diluting the significant provisions of RERA. For instance, the Real Estate (Regulation and Development) Rules, 2017, as notified by the state of Andra Pradesh, dilutes the definition of 'ongoing projects' and excludes such projects where roads, open spaces, amenities, and services have been handed over to the local authority or where all developmental works have been completed and sale/lease deeds of 50 (fifty) per cent of the apartments have been executed. Similar dilution is witnessed in the real estate rules as notified in the state of Uttar Pradesh and Maharashtra. Further, the Maharashtra real estate rules permit the project developer to register the project with proposed floor space index, number windows and layout plan which gives much flexibility to the developer for amending the proposed plan till the same is sanctioned. Furthermore, the real estate rules of these states have diluted the penalties for non-compliance by the developer.
On the other hand, in the state of West Bengal, there is a new ray of hope that the enactment and effective implementation of the WB Housing Regulation Bill will mark the beginning of a new era of accountability, transparency, and efficiency in the real estate sector as the buyers will be made the king and the developers will gain the confidence and trust of the king in the regulated real estate sector.
(The views are personal.)
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