COIMBATORE: Despite continuous monitoring and follow up by the Union ministry of urban development and housing, only nine states (Andhra Pradesh, Bihar, Gujarat, Kerala, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, and Uttar Pradesh) and six union territories (Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep, and National Capital Territory of Delhi) have notified their respective Real Estate (Regulation and Development) Rules, 2017, ratings agency Crisil has said.
The central Real Estate (Regulation and Development) Act (RERA) was notified on May 1, 2016, and came into effect nationwide from May 1 this year.
States were asked to prepare and notify respective rules in tandem with RERA, so that it could be effectively implemented. Many states have either diluted a few crucial aspects of the Act, or given insufficient emphasis to its provisions in their rules, Crisil Research said after comparing the notified state specific rules with the central Act.
RERA includes projects that are ongoing on the date of commencement of the Act (i.e. May 1, 2017), and for which the completion certificate has not been issued. “However, Andhra Pradesh, Kerala and Uttar Pradesh have altered this definition in their notified rules,” Crisil said.
RERA also recommends imprisonment for a term which may extend up to three years, or fine which may extend up to 10% of the estimated cost of the real estate project, or both, in case of non-compliance. “However, most states have added a clause of compounding of offence to avoid imprisonment,” the agency said.
According to the central legislation, the model sale agreement is required to specify 10% advance payment, or charge an application fee from buyers, while entering into a written agreement for sale. In addition, in case of any structural defects arising within five years of handing over the possession of project to buyers, developers will be liable to rectify such defects without further charge.
“However, there is no clarity on these clauses in most states’ RERA notifications,” Crisil stated.
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