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Maharashtra: Real Estate Bill nullifies key provision in state Act

The Centre’s much-touted real estate Bill, approved by the Rajya Sabha on Thursday, has nullified a provision made by the Maharashtra government that permits it to grant “deemed” conveyance of lands to housing societies where building firms or land owners are refusing the mandatory transfer of land titles. That is because the Centre’s Bill does […]

Written by Sandeep A Ashar | Mumbai |
March 12, 2016 2:42:48 am
real estate, real state in india, prperty sale, real state bengaluru, bangalore real estate, bangalore property, business news, economy news, latest news, Maharashtra is the only state to recognise this right to title of housing societies.

The Centre’s much-touted real estate Bill, approved by the Rajya Sabha on Thursday, has nullified a provision made by the Maharashtra government that permits it to grant “deemed” conveyance of lands to housing societies where building firms or land owners are refusing the mandatory transfer of land titles.

That is because the Centre’s Bill does not contain provisions to grant deemed conveyance. Further, despite a strong objection from the state government, the new Bill has a clause, which states that the Maharashtra Housing (Regulation and Development) Act (MHA), 2012, will be repealed once the Centre’s Act comes into force.

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Maharashtra is the only state to recognise this right to title of housing societies. Although the initiative was first introduced in 2008, the previous Congress and the NCP regime later incorporated provisions for the Act’s implementation in the MHA.

About 45,000 housing societies in the state are yet to be handed ownership of the lands and would be impacted by the Centre’s move, senior government officials said. In June last year, Maharashtra Chief Minister Devendra Fadnavis had written to the Centre objecting to the clause for repealing the MHA. The correspondence had argued that the Centre’s move was against the “basic federal character of the Constitution.”

The CM argued that “it was constitutionally impossible for the Parliament to repeal the state Act as the latter’s context falls under matters enumerated in the state list.” On Thursday, Fadnavis, however, conceded that the state’s effort in this regard had not materialised. “The MHA has been repealed. We are now exploring fresh legal mechanisms to persist with the deemed conveyance initiative and some other provisions under the MHA,” he told The Indian Express.

Housing Minister Prakash Mehta and department’s principal secretary Shree Kant Singh, meanwhile, held parleys with the state’s law department on options available with the state.

With the Centre’s bill expected to be tabled in the Lok Sabha Monday, sources also said that the state was even making efforts to get some of the MPs from Maharashtra to raise their concern. While both the Centre’s Act and the MHA have provisions for appointment of an independent real estate regulatory authority, the Maharashtra government has argued that the state’s legislation was more “far-reaching” in safeguarding interest of flat purchasers.

It argued that the Centre’s Act was “soft” on developers on several counts. “The state Act says that if the housing regulator was satisfied that the developer would not be able to complete construction of the building project, buyers can form a legal entity comprising 60 per cent of flat purchases as an escrow agent that would then take over possession of the housing project. It also has a provision by which the regulator will retain 10 per cent of apartments in all construction projects, which will be handed over to purchasers to complete the project in case developers fail to do so. The Centre, on the other hand, makes state authorities responsible for completion of incomplete projects,” a senior state official said.

It was also pointed out that the MHA disallows sale of apartments before registration of a project with the Housing Regulator, whereas the Central Act permits 10 per cent flats to be sold prior to registration. The defect liability period for deficiencies in building work is five years in the state Act, but has been trimmed to two years in the Central Act.

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