Pointing out that realty law RERA is not "perfect Act" and "badly drafted", real estate regulators of Haryana and Madhya Pradesh on Tuesday said the legislation needs to be amended to give more power to them for implementation of orders as well as remove ambiguity related to adjudicating authority.
Insolvency and bankruptcy law should also be amended to first allow real estate regulators under RERA to find resolution of stalled projects within six months, before starting the bankruptcy proceedings, they added.
Speaking at the RICS real estate conference, Anthony de Sa, chairman (MP-RERA), said the Real Estate (Regulation & Development) Bill, known as RERA, is not a "perfect Act" and requires amendments.
The law, which was passed in 2016 but came into effect from May 2017, seeks to bring transparency into the sector by eliminating fly-by-night operators.
K K Khandelwal, chairman, Haryana RERA (Gurugram), termed the RERA as "badly drafted piece of legislation" and said there are many deficiencies in the Act, including the duplicacy of jurisdiction for dealing with the grievances.
"Give RERA more teeth to implement its decisions, otherwise RERA will lose credibility," said Anthony.
The MP regulator said the RERA bars jurisdiction of civil court but it is silent on different consumer forums and as a result, homebuyers continue to approach these forums with their grievances.
RERA should be the only place for dealing with homebuyers grievances and any violation of provisions of this Act, Anthony said, adding that "parallelism should end".
For debt-ridden companies and stressed projects, the MP regulator suggested that insolvency law should be amended to give power to regulators under RERA to find resolutions.
"Real estate needs to be seen differently as allottees (homebuyers) are big stakeholder," Anthony said, adding that regulators should be given six months to find solutions for such companies and stuck projects.
According to the provisions of this law, all projects with a plot size of minimum 500 sq metre or 8 apartments shall be registered with regulatory authorities. Real estate developers need to deposit 70 per cent of the funds collected from buyers in a separate bank account in the case of new projects and 70 per cent of unused funds in case of ongoing projects.
The law also provides for imprisonment of up to three years for developers and up to one year in case of agents and buyers for violation of orders of Appellate Tribunals and Regulatory Authorities.
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