The rules for the much-awaited real estate regulator that were notified by the Maharashtra government on Saturday has a significant provision that allows home buyers of a stalled project to form a legal entity that can assume the complete control of the construction process.
Maharashtra is all set to become the first state in the country to regulate real estate sales through a housing regulator with the government seeking suggestions and objections on the rules from the public till October 10, following which it plans to enforce them.
The Maharashtra Housing (Regulation and Development) Rules state that if the housing regulator is satisfied that the developer would not be able to complete the construction of buildings, the buyers can form a legal entity comprising 60 per cent of flat purchasers as an escrow agent that would then take over the possession of the housing project. It also has a provision by which the regulator will retain 10 per cent of sale apartments in all the construction projects, which will be handed over to the purchasers to complete the project in case the developers fail to do so.
To safeguard the interest of consumers, the rules make it mandatory for the developers to register their projects with the regulator. Developers will be legally barred from advertising the sale of the flats till the project has been registered. The government has also brought estate agents under its ambit by making their registration with the regulator a mandatory condition.
To prevent unethical practices, the government has said the developers would be legally bound to disclose all details regarding the construction projects, including land and title records, agreements granting them the power to develop the property, project cost, saleable area, financial arrangement for meeting costs, period of construction, along with their registration application. It will also seek full details regarding the developers’ past projects. A developer would be registered only if all the technical and financial parameters are met. Moreover, the entire information will be uploaded on the regulator’s official website.
The government has plans to grade developers on their delivery standards at a later stage, a senior official said.
The rules also stipulate fixed timeframe within which a developer or land owner should convey the land title in the the society’s name after obtaining occupation certificate.
The government also issued rules for appeal against the regulator’s order before an appellate tribunal.