Maharashtra misses Oct 31 deadline to notify real estate rules

Framing rules becomes necessary following enactment of the Real Estate Act, which seeks to protect home buyers and boost investments in the sector

The Maharashtra government has missed the October 31 deadline set by the Central government in its advisory to notify the Maharashtra Real Estate (Regulation and Development) (General) Rules 2016. Framing of these rules was necessitated, following the enactment of the Real Estate (Regulation and Development) Act, 2016 which seeks to protect home buyers and boost investments in the real estate.

A State housing department official told Business Standard, "It was just an advisory issued by the Union Government. Maharashtra is not the only state -- several states have yet to notify these rules. The draft rules will be issued this week to seek objections and suggestions November-end. Thereafter, these rules will be notified before the winter session of the state legislature slated to begin on December 5. This will ultimately lead to the establishment of Housing Regulatory Authority."

According to the draft rules, which were scanned by this correspondent, it would be mandatory for a realty project promoter to make all disclosures, including information and documents to be uploaded on the website of Real Estate Regulatory Authority (RERA). The promoter will have to deposit 70 per cent of the amount realized for real estate project from the allottees, from time to time, in a separate account to be maintained in a scheduled bank to cover the land and project construction costs.

KnightFrank executive director Gulam Zia said setting up of RERA is proving to be time consuming. "The draft rules that will be hugely drawn out of the central RERA draft, will still require public consultation for collating objections and suggestions. The consultative process itself can take few months to a year to conclude which is evident from the process for finalization of Development Plan (DP) which is still eagerly awaited after multiple iterations." He said respite for an ordinary home buyer may still not be in sight due to these delays.

JLL India chairman & country, Anuj Puri, said except Gujarat, no other state was able to notify the rules of RERA before the October 31 deadline. "Therefore, singling out Maharashtra as an outlier would be incorrect. Maharashtra, along with other states such as Andhra Pradesh, Karnataka and Tamil Nadu, are said to be in advanced stages of finalizing the rules," he said.

Puri argued that the a regulator would help the sector become more organized and professional. "Many issues that the sector encounters today – trust deficit between homebuyers and developers, frequent delays in completion of project, fly-by-night operators – would either cease to exist or will be mitigated to a great extent once a regulator is in place. As a consequence, consumers will feel a lot more safer to deal with developers who have their projects listed with the authority and with brokers who are empaneled by the developers," he said.