Realty Act rollout from May 1
Home buyers can heave a sigh of relief, the long-awaited Real Estate (Regulation and Development) Act (RERA) will be implemented from May 1. The catch — only 12, out of a total of 32 states and Union territories, have notified rules.
State governments are supposed to appoint regulatory authorities to implement the rules framed under the Act. But so far, only one state, Madhya Pradesh, has set up a permanent regulatory authority. Three UTs, Delhi, Andaman & Nicobar Island and Chandigarh, have set up interim authorities. Most others, including Haryana, Rajasthan, Karnataka, Gujarat, Andhra Pradesh and others have not done so, meaning that no new project can be launched there. This will hurt the real-estate sector, already reeling from a slowdown.
The Act specifies that all existing projects must be registered with the state’s regulatory authority by July 2017, and that no new project can be launched without this registration. So far, only six states and six union territories have notified the rules. The remaining 20 are yet to do even that.
A developer can seek registration of a project only after the rules are notified and the authority appointed. Some states are seeking public suggestions on their draft rules. Haryana will notify its final rules only after May 15, after getting this feedback.
There are allegations that state governments have diluted some provisions from Central rules, like the definition of ongoing projects to be included in the RERA. A senior official of the Union Urban Development Ministry said state governments had been asked to desist from doing so. He also said that some states, like Maharashtra and Gujarat, had given greater teeth to these provisions.
Getamber Anand, chairman of the real estate developers’ association CREDAI, said that the government must move fast to notify rules and appoint authorities, to avoid disruptions in the country’s development activities. He said that rules should have been notified in advance to give developers some time to come to terms with the new system. However, he welcomed the move, saying it would bring greater transparency.
RERA has to be implemented from May 1 to meet the constitutional requirements, said a senior official in the Union urban development ministry. He said almost all states are working to complete the process in the next couple of weeks. For now, states will appoint interim authorities, and then work on creating fullfledged bodies. Meanwhile, the developers must work to secure all the approvals needed to register it with the authority to launch a project.