Home buyers who have been at the receiving end of inordinate delays by developers can now take over the construction process with the Maharashtra government all set to have a first-of-its-kind housing regulator.
The regulatory body can pass orders to transfer 10 per cent of the total project to buyers who can then sell it in the market to cross-subsidise the construction cost and finish the project on time.
Towards this end, builders will not be allowed to sell at least 10 per cent of their total apartments, known as “retained flats”, until they finish construction and procure an occupation certificate (OC) for the project. This and several other safeguards are part of the Maharashtra Housing (Regulation and Development) Act 2012, which received presidential assent this week, making Maharashtra the country’s first state to have in place a regulator to rein in the realty sector.
The regulatory body, that will have powers of a civil court, can sentence errant developers to a prison term of up to three years and impose fines of up to Rs 1 crore. The Act will extend to all new and under-construction residential, commercial and retail projects that are yet to get an OC. Developers will be prevented from selling or even marketing their project unless they register it on the website of the regulatory authority and update all plans and approvals from time to time.
The state Act is the culmination of a proposal that was mooted more than five years ago. It was kept in abeyance owing to pressure from the real estate industry that lobbied in favour of self-regulation and was finally passed by both houses of the state legislature in July 2012. “Since then, the central government has been deliberating on whether to allow us to go ahead with our Act since the central legislation for a realty regulator is still in the draft stages. We had to push for enforcing our version for the time being as there are way too many consumer complaints,” said Sachin Ahir, minister of state for housing.
The Housing Regulatory Authority will be headed by a person of the rank of a principal secretary.
Those dissatisfied by its ruling can approach the Housing Appellate Tribunal chaired by a serving or retired judge of High court.
In order to pre-empt complaints from languishing for years on end as in case of consumer or civil courts, cases will have to be disposed of within three months at each level.
“Once we are able to implement the act , we will introduce measures to control the price and size of houses as well as keep in check the proportion of investors in the market,” said Ahir.