RERA: UP redefines ‘ongoing’ projects, exempts even those applied for licence

According to industry officials, in Noida alone, around 50 under-construction group housing projects have been delayed by three to four years due to the slowdown in the realty sector.

Written by Deepa Jainani , Surbhi Prasad | Lucknow/new Delhi | Published:July 31, 2017 1:50 am
RERA, Maharashtra Real Estate Regulatory Authority, Maharashtra RERA chairperson Gautam Chaterjee, Confederation of Indian Industry, MahaRERA  While Central RERA recommends imprisonment for a term which may extend up to three years, or fine which may extend up to 10 per cent of the estimated cost of the real estate project, or both, UP has included compounding of offence clause to avoid imprisonment and even the compounding has been limited to ‘maximum 10 per cent of the estimated cost of the real estate project’, which means it may even be zero in some cases.

The Uttar Pradesh government’s real estate rules have amended the definition of an “ongoing project”, allowing a builder to be exempt from the purview of Real Estate Regulation Act (RERA) even if he has just applied for a licence or received a part-completion certificate before the Act was notified.

This effectively means that those builders who do not complete projects and leave home buyers in the lurch cannot be penalised as per RERA guidelines. Clauses related to penalties for non-compliance by developers have also been diluted. While Central RERA recommends imprisonment for a term which may extend up to three years, or fine which may extend up to 10 per cent of the estimated cost of the real estate project, or both, UP has included compounding of offence clause to avoid imprisonment and even the compounding has been limited to ‘maximum 10 per cent of the estimated cost of the real estate project’, which means it may even be zero in some cases.

This is likely to encourage corruption as quantum of money to be paid will be at the discretion of the authority. As was given in the central draft rules and also provided in the final rules, this should be rolled back to match the Centre’s rule on ‘compounding’,” says Abhay Upadhyay national convener of Fight for RERA. As on date, around 834 developers have registered with the portal.

“UP has decided to keep all those projects outside the purview of RERA which have been either issued, or have applied for occupancy certificates. The main problem here is that of delayed possession. Projects that were launched 7-10 years back are still not completed. And because of this clause they will get an escape route. Home buyers who are battling these builders will find no redressal under RERA,” said Indresh Gupta, co-founder, Noida Extension Flat Owners’ Association.

According to industry officials, in Noida alone, around 50 under-construction group housing projects have been delayed by three to four years due to the slowdown in the realty sector. This has affected around one lakh buyers who had invested in projects that were to be delivered by 2012.

With inputs from FE

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