Ministry divided over realty regulator

The ministry of urban development is not of one view on the powers and functions of the proposed real estate regulator for Delhi.

The regulator's post and the autonomous real estate regulatory body will be a part of the much talked of Real Estate Bill that is being drafted by the ministry.

While the Bill is being drafted only for Delhi, the central government will subsequently urge other states to adopt it. Maharashtra is already talking of a real estate regulator.

It was earlier speculated that the Bill would be taken up by Parliament in the Budget session. Later, it was said that it would come up in the Monsoon session. However, sources said it is not likely to figure in the upcoming House session.

Sources in Minister of State for Urban Development Ajay Maken's office said the autonomous regulatory body, headed by the regulator, would act as a single window for issue of all building permits. This would make other state bodies such as the Delhi Development Authority and Municipal Corporation of Delhi subservient to it.

However, Maken's ministry is said to be against such a proposal, as it would vest too much power in one body and in effect bring back the licence raj.

"It is also not very feasible to amend MCD and DDA bylaws. That would become a necessity if the regulator has to have the power to issue all permits. One line of thought is to let the regulator act as a coordinator for all departments and expedite the procedure," a source said.

Taking this view forward, the Union government wants to divide powers between the regulator and a second competent authority. "Division of power is always desirable. We are still finalising the contours of the competent authority. It could report to the lieutenant governor of Delhi," said a ministry official.

While Maken wants the regulator to address grievances, issue building permits and prevent builders from artificially escalating property prices, his ministry wants it to mainly take up complaints against builders and brokers.

"Once a complaint is registered with the regulator, it can call upon the second competent authority to address the problem," added the official.

To illustrate the divergence of views within the ministry, take the proposal in the draft bill that calls for a builder paying a financial guarantee while being issued a licence for a project, a percentage of which could be confiscated if the deadline is not met with.

Sources said Maken would want the regulator to have the authority to fix the financial guarantee and also decide if a builder is to be penalised. His ministry, on the other hand, would prefer the competent authority fixing the financial guarantee.

The regulator would "move the file from the competent authority" for penalising a builder only after it receives a complaint.