Bengal opts out of RERA

Bengal opts out of RERA
05/06/2018 , by , in News/Views

Exactly two years after the Real Estate (Regulation and Development) Act was promulgated by the Centre, the West Bengal government has finally decided not to implement it.

The State government notified its own Act, the West Bengal Housing Industry Regulation Act (HIRA), on June 1, diluting at least two key provisions of RERA, with regard to common space and force majeure, in a way that favours developers.

West Bengal, which has historically been lax in protecting the interests of home buyers, drafted new rules as early as in January 2017 before deciding to have its own Act (HIRA).

The most crucial dilution relates to the force majeure clause, which may be invoked to bypass the strict delivery schedule. Under RERA, developers can invoke the clause only in case of war, drought, flood, earthquake, fire or any other calamity caused by nature, affecting the regular development of real estate projects. The clause was cleared by the Bombay High Court in letter and spirit, ignoring opposition from the builders. But according to the Bengal Act, over and above the conditions listed by RERA, force majeure can be declared for “any other circumstances as may be prescribed.”

Under this provision, home buyers in Bengal may be deprived of delivery even in case of a sharp rise in crude prices in the global market, if the State authorities so decide.

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