Category: HI & RERA

In February, the Supreme Court directed the Centre to examine whether the rules framed by various states under the Real Estate (Regulation and Development) Act (RERA) are in conformity with the central legislation and subserve the interest of homebuyers.

Union minister for housing and urban affairs Hardeep Singh Puri on Tuesday asserted that there should be no dilution of the provisions of the Real Estate (Regulation and Development) Act, called as RERA, by states, and assured that the Centre will not bring the “whole template down” even if some states decide to dilute the norms.

He said the RERA is a widely accepted legislation and its success is anchored in the spirit of gradual but steady problem-solving.

The minister was speaking at a meeting of the Central Advisory Council (CAC), constituted under the RERA Act, 2016.

During the meeting, measures to ensure structural safety in high-rise buildings and prevent loss of life as well as property, besides considering a proposal to set up a high-level panel to address the issue of stalled projects, was discussed.

Regarding incidents of building collapses, Puri said homebuyers should have a sense of confidence that a building is structurally sound.

The responsibility has to be assumed by the builders themselves. If the builder has gone wrong, or he/she has not been able to check something, full recovery from that person is the minimum, as thousands of people get affected, he said.

Meanwhile, it was pointed out that some states have tweaked the provisions of RERA while framing rules under the Act by exempting the registration of ‘ongoing projects’.

In February, the Supreme Court directed the Centre to examine whether the rules framed by various states under the RERA are in conformity with the central legislation and subserve the interest of homebuyers.

“The fact of the matter is that you did not have a regulator and then you are bringing in the regulator, so everybody will try to stop it. When they found that we are resolute in our determination and they try to do something else, they tried to tweak it,” Puri said.

The minister said the Centre will place before the Supreme Court all the facts related to dilution of RERA Act by the state governments.

“I think we should place the fact squarely before the apex court that if all of us agree and some state do this (the dilution), we have enough persuasive power at our disposal to tell them this is not right. No dilution is a norm. Those who have diluted will have to justify why they have diluted. And we will not bring the whole template down just because you have diluted it,” Puri said.

In the meeting, it was also highlighted that all states/UTs have notified rules under RERA, except Nagaland which is in process to notify the rules.

As many as 31 states/UTs have set up Real Estate Regulatory Authority (Regular-25, Interim-6). States like Meghalaya, Sikkim, West Bengal and Union Territory of Ladakh are yet to establish the authority.

“The best thing about RERA is that it has come to be widely accepted in the country. And its success is anchored in the spirit of gradual but steady problem solving,” Puri said.

There are 30 members in the CAC panel which includes Niti Aayog CEO and secretaries of many ministries. President of homebuyers’ body Forum for Peoples’ Collective Efforts Abhay Upadhyay as well as presidents of realtors’ body CREDAI and Naredco are members of the council.

On the implementation of RERA Act by states, Upadhyay suggested that a committee should be formed, under the leadership of additional secretary, comprising all stakeholders to take up the issue with respective states. He said the suggestion of the FPCE (Forum for Peoples’ Collective Efforts) has been accepted.

Regarding tweaking of rules by states, Upadhyay suggested that necessary instructions should be given for compliance of the Supreme Court order in letter and spirit. The general rules for all states should also be reviewed along with ‘agreement for sales’ and placed before the apex court, he added.

FPCE has suggested that necessary directives should be issued to all states to ensure sufficient technical teams are provided to the regulatory authority to inspect every stage of construction at regular intervals to ensure structural safety and quality of construction.

Regarding constitution of committee of resolution of legacy stalled projects, Upadhyay said it was agreed to include FPCE as homebuyers’ representative in the proposed committee to look into this issue.

On the stalled projects, the CAC agenda highlighted that the Centre has established the Alternate Investment Fund (AIF)- Special Window for Affordable and Mid-Income Housing Fund (SWAMIH) investment fund of ₹25,000 crore to provide last mile funding for projects.

The fund is being provided to projects that are net-worth positive and registered under RERA, including those projects that have been declared as Non-Performing Assets (NPAs), or have pending proceedings before the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC).

As on February 14 this year, 249 deals aggregating to ₹23,778 crore have been approved, and this will benefit more than 1,46,946 homebuyers and unlock projects worth ₹66,163 crore.

“It is evident that this fund has proved to be very instrumental in completing the legacy stalled projects, and is fulfilling the dreams of homebuyers who invested their lifetime savings in these legacy stalled projects which were launched before enactment of RERA,” the agenda said.

Accordingly, the CAC might advise the Centre to constitute a committee under the chairmanship of NITI Aayog CEO to deliberate on all the issues related to these legacy stalled projects holistically.

“The committee may comprise representatives from the Ministry of Finance, Ministry of Housing & Urban Affairs, sectors’ experts (dealing with stalled projects and insolvency proceedings) and give its recommendations to the central government within two months from date of its constitution,” the agenda said.

Source: https://www.hindustantimes.com/real-estate/states-should-not-dilute-rera-provisions-union-housing-minister-puri-101649844593293.html

The Central Advisory Council (CAC) meeting scheduled for April 12 will discuss issues relating to the structural safety of real estate projects following an incident of partial roof collapse in Gurugram wherein two women were killed.

The meeting will also deliberate on constituting a committee for the resolution of legacy stalled projects and the issue of some states tweaking the provisions of RERA, while framing rules under the Act by exempting the registration of ‘ongoing projects.’

The CAC, set up by the government for effective implementation of the Real Estate (Regulation and Development) Act, 2016 (RERA), will hold its third meeting on April 12. The first two meetings of the CAC were held on May 14, 2018, and April 29, 2020.

The council, chaired by Housing and Urban Affairs Minister Hardeep Singh Puri, will consider measures like physical inspection of projects during construction and structural audit at regular intervals by reputed institutes.

“Recently, there have been reports of incidents related to structural safety in multistorey apartments. Though, RERA mandates the promoters to rectify the structural defects highlighted within a period of 5 years from the date of possession, some provisions related to structural safety may be deliberated to ensure further safety of high-rise buildings and to prevent loss of life and property.

“These provisions may include a physical inspection of projects during construction, Structural Audit by reputed institutes on regular intervals, declaration of Structural Safety by promoter before applying for completion or occupancy certificate, etc. Central Advisory Council may consider,” according to the agenda.

The committee may comprise representatives from the Ministry of Finance, Ministry of Housing and Urban Affairs, sector experts (dealing with stalled projects and insolvency proceedings) and give its recommendations to the central government within two months from the date of its constitution, the agenda said.

“Central government established the Alternative Investment Fund (AIF)- Special Window for Affordable and Mid-Income Housing Fund (SWAMIH) Investment Fund of Rs 25,000 crore to provide last mile funding for projects that are net-worth positive and registered under RERA, including those projects that have been declared as Non-Performing Assets (NPAs) or are pending proceedings before the National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code (IBC),” it said.

“As of February 14, 2022, 249 deals aggregating to ₹23,778 crore were approved which will benefit more than 1,46,946 homebuyers and unlock projects worth ₹66,163 crore,” it said.

It is evident that this fund has proved to be very instrumental in completing the legacy stalled projects and is fulfilling the dreams of homebuyers, who invested their life savings in these legacy stalled projects, which were launched before the enactment of RERA, it said.

The third meeting of the CAC will also discuss the issue of tweaking RERA provisions by some states. The CAC agenda noted that all states/UTs have notified rules under RERA except Nagaland, which is in the process to notify the rules.

As many as 31 states/UTs have set up Real Estate Regulatory Authority (Regular-25, Interim-06). States like Meghalaya, Sikkim, West Bengal, and UT of Ladakh are yet to establish authority.

In the agenda, it was pointed out that some states have tweaked the provisions of RERA while framing rules under the Act by exempting the registration of ‘ongoing projects. The matter was taken up by the housing ministry on several occasions and through various communications.

The CAC in its first meeting deliberated upon the issue of dilution by the states while framing rules under the Act. As decided in the meeting, the ministry has taken up the matter through various communications.

Homebuyers’ body Forum for People’s Collective Efforts (FPCE) president Abhay Upadhyay said in a statement that the agenda for the upcoming CAC meeting shows that the Ministry of Housing and Urban Affairs is serious and keen to address all major concerns not only in the implementation of RERA but also in providing resolution for incomplete legacy stalled projects started before RERA came into force.

“We have been raising the issue of dilution in RERA Rules by the states due to which many incomplete projects were left out of the ambit of RERA and also that RERA Authorities are unable to enforce their own orders due to which RERA orders became nothing more than a piece of paper.

“The recent incident of poor construction quality leading to loss of lives will also be part of the discussion,” Upadhyay said.

The proposal to form a committee under the Chairmanship of CEO, NITI Ayog is also welcome and shows that the government is keen to ensure the completion of remaining incomplete stalled legacy projects, he said.

“We have also come to know that the Ministry has accepted our suggestion to live stream the proceedings of the CAC meeting on social media platforms to ensure complete transparency,” Upadhyay added.

Source: https://www.moneycontrol.com/news/business/real-estate/structural-safety-of-real-estate-projects-changes-in-rera-provisions-to-figure-in-upcoming-cac-meeting-8297181.html

Homebuyers’ apex body FPCE expects the implementation of realty law RERA to improve following the Supreme Court’s recent direction to the Centre to examine the rules framed by states and see whether those subserve the consumers’ interest.

Last month, the Supreme Court directed the Centre to examine whether the rules framed by various states under the Real Estate (Regulation and Development) Act, 2016 (RERA) are in conformity with the central legislation and subserve the interest of homebuyers.

A bench of Justices D Y Chandrachud and Surya Kant gave three months to the Centre to examine if there are any deviations between the rules drawn up by the states and those framed by the Centre in 2016, and to place the report by the first week of May 2022.

When contacted, Forum for People’s Collective Efforts’ (FPCE) President Abhay Kumar Upadhyay said: “Despite five years of its full implementation, RERA is yet to reach anywhere near its intended objective.”

The prime reason for this is that the states to whom responsibility has been given for its implementation did not follow any uniformity in their general real estate rules and rules for agreement for sale, he pointed out.

“Their (states’) rules were not within the four corners of the provisions of RERA. This took sting out of the Act and homebuyers were deprived of the benefits of RERA,” Upadhyay said.

On the other hand, the association’s president said, builders took full advantage of this and the fear of RERA catching them faded.

“In view of this, though late, but still this ruling from the Supreme Court will set things right going forward and many homebuyers will then reap the benefit,” he added.

Most importantly, this ruling would break the belief in most builders that they are above the law or that they can take the law for granted, he said.

“I sincerely hope that both the ministry to whom the task has been assigned directly and also the Amicus who has also been given responsibility will devote sufficient time and report not only all deviations but also missing content which may have left loopholes in the implementation of RERA,” Upadhyay said.

This order has once again raised the hopes of homebuyers that they will get justice sooner than later, he added.

Colliers India CEO Ramesh Nair said the Supreme Court’s decree to scrutinise RERA rules of states is significant as there is a lack of uniformity in builder-buyer agreements across RERA rules of various states.

“This directive will help bring accountability and transparency in dealings between homebuyers and developers in several cases,” he said.

The anomalies mainly existed with respect to the payment schedule, delivery schedule and associated delays, as well as liability towards structural defects, Nair pointed out.

“A uniform builder-buyer agreement will also lead to more confidence amongst homebuyers. It will instill trust in homebuyers, without the fear of any unwarranted liabilities,” Nair said.

Homebuyers would also have more faith in developers across the spectrum, and even in under-construction projects, the Colliers India CEO said.

Source: https://realty.economictimes.indiatimes.com/news/industry/rera-implementation-to-improve-post-sc-direction-on-examining-states-rules-fpce/90181477