Maharashtra is all set to become the first to have a regulator for the housing sector. It has put up a draft of the Maharashtra Housing (Regulation and Development) Rules for public comment till October 10, after which its provisions are likely to come into force. Housing does indeed need some robust regulation. At least one study has named real estate and infrastructure the most corrupt sector of the country. There has been some successful consumer activism of late, but there is a lot of ground that still needs to be covered. Buyers continue to fall prey to the shenanigans of real-estate developers. Many of them launch projects without all the clearances in place. Money raised from the buyers of one project is diverted unscrupulously to other projects. Delays have become the norm. Definitions of built-up area, super area and carpet area are changed with impunity to suit the interests of the developers.
The new housing regulatory authority in Maharashtra will certainly help purchasers. All developers will have to register their projects with the regulator and disclose the status of the various clearances they are required to get, along with details of the construction costs, land records, deadlines and registration application. These will be verified by the regulator. A developer will not be allowed to advertise a project unless it has registered the project with the regulator. At the moment, the prospective buyer finds it impossible to get this information from the developer. In the new regime, all the buyer will need to do is check the website of the regulator. In case the courts declare invalid the title deed or power of attorney for the land, the registration of the project will be cancelled by the regulator and the developer will not be able to advertise or sell it. In case the regulator is convinced that the developer cannot complete the project, the buyers can form a legal entity and complete it. All real-estate agents will be required to register themselves with the regulator. This is significant because in most cases, the buyer interacts with the agent who acts as the conduit for all the misinformation. They need to be reined in as well.
The Maharashtra initiative shows once again how the states are taking the lead in reform. Rajasthan has brought about sweeping changes in labour laws, which will make it easier for corporations to set up shop in the state. Other states like Haryana and Madhya Pradesh, too, are working in that direction. And now Maharashtra has given shape to a regulator for the housing sector. The talk of such a regulator has been doing the rounds for some time. After much deliberation, the United Progressive Alliance government had introduced the Real Estate (Regulation and Development) Bill in Rajya Sabha last year. The view of the current National Democratic Alliance government on it is not very clear. But it seems unlikely that it will see the light of day anytime soon.
