Asserting that the government is committed to resolving the problem of home buyers, Union minister Hardeep Singh Puri said today that all real estate projects will eventually come under the purview of real estate law RERA once the regulator is established in all states to protect consumers interest.
Hard-earned money of over lakhs of home buyers in Delhi-NCR are stuck because of defaults by developers including Jaypee group, Amrapali, Unitech and The 3C Company in deliveries of their projects on time.
Speaking at the CII-CBRE real estate conference, Puri said a high-powered committee, headed by Union Housing Secretary, has submitted its report to the Uttar Pradesh government. The state government had constituted this panel to examine the issues and propose some viable solutions to the problem faced by the home buyers.
The Housing and Urban Affairs Minister however did not disclose the recommendations contained in the reports.
He also said that state-owned construction firm NBCC will soon submit its report to the Supreme Court regarding the feasibility of completing the incomplete projects of Amrapali where thousands of homebuyers are stuck.
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"This is a responsive government. We do not shy away from the problems...we are totally committed to resolve the problems of home buyers and the sector," Puri said, adding that the apex court as well as the government was seized of the matter.
He highlighted that the NDA government has passed the RERA legislation to regulate the real estate sector and protect consumers interest.
"RERA will ensure that in future buyers will not sign one sided contracts. RERA authority can deal with that. There has been some attempts at tweaking RERA so far as ongoing projects are concerned. But I think that's coming to the naught because as RERA mechanism are being established in States, all projects will get covered by the RERA. So I think, its going in that direction," Puri said.
Speaking on the sidelines, he said there are complaints currently that many states have not set up authority and West Bengal has come up with its own law.
"In my view, once RERA is established and takes off, there will be a demand that all real estate projects should come under the purview of this law," Puri said, adding that there would come a stage when this would happen.
At present, all under-construction projects, which do not have completion or occupancy certificates, have to be registered under RERA and comply with all the provisions of the law.
The minister did not comment on recent judgement by a Gurgaon bench of Haryana-RERA that real estate projects come under the ambit of Real Estate Regulation and Development Act (RERA) whether they are registered under RERA or not.
Earlier Puri spoke in detail about the RERA and said that the Act upholds the spirit of federalism by allowing the States to set up the Regulatory Authority and the Appellate Tribunal and the role of the Centre is limited to Union Territories without legislature.
"The Act attempts to balance the interests of the consumers and the developers by imposing clear responsibilities on both. The Act seeks to establish symmetry of information between the promoter and the purchaser; transparency of contractual conditions; set minimum standards of accountability; and a fast-track dispute resolution mechanism," he added.
The Act is aimed at consumer protection, by creating an online system for information sharing so that there is mutual trust between the developer and the buyers, and projects are implemented in time.
Elaborating on the main features of the RERA, he said the law introduces the concept of using only 'carpet area for sale', which has till now been ambiguously sold as super area, super built up area etc,.
The RERA makes it mandatory upon the promoters to deposit 70% of the funds, received from the allottees in a separate bank account, to cover the construction cost and land cost of the project. This requirement shall prevent fund diversion and ensure timely completion of projects.
The law seeks to establish a regulatory oversight mechanism, through Real Estate Authorities and Appellate Tribunal in states and Union Territories, to enforce accountability norms for the promoters, buyers and the real estate agents. It also provides for a speedy and specialised adjudication mechanism to settle disputes between the promoter, buyer and real estate agents.
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