JOIN USState governments should take seriously the caution sounded by the Centre about the timely framing of rules under the Real Estate (Regulation & Development) Act, 2016. The landmark legislation, which seeks to bring transparency and accountability into the real estate sector, became law and was notified by the Centre last year.
The states have to create the necessary institutional mechanism through their own rules to implement the law because land is a state subject. Union Minister for Housing Venkaiah Naidu has written to all chief ministers to take up the matter on an urgent basis and frame the rules before the deadline of May 1. The states actually had to notify the rules before October 31, last year. But only four states — Gujarat, Madhya Pradesh, Maharashtra, Uttar Pradesh — and six Union Territories have complied with the requirement till now.
The law is to come into force in May this year but there will be a regulatory vacuum if states do not set up a regulator and an appellate mechanism as required under it. All the protocols have to be decided and put in place. In their absence, the situation will amount to the existence of a central law without the means and mechanism to implement it in the states. It is the consumers who will be adversely affected by the situation. Many of them have been waiting for the law to come into force. Many home buyers who have invested money in projects which are hit by delays or by other problems which are common in the housing sector will be able to get their grievances redressed quickly when the law becomes operational. When institutions like the regulator and the appellate mechanism are not there, consumers will have to go to courts if there is dispute between them and the builder. Litigation always hurts the interests of consumers who end up losing their money and time fighting stronger and more resourceful opponents.
Realtors obviously do not want the law to be implemented in its entirety. They have demanded that existing projects should not be brought under the law. They have tried to put pressure on state governments in this and other respects. Gujarat and UP have kept most ongoing projects outside the law’s purview. Maharashtra has not mandated that the details of projects on the developers’ websites should be open to public viewing. The provisions of the law should not be diluted by rules that favour realtors. All states should frame the rules which conform to the spirit of the law and notify them before the deadline. Consumer organisations and home buyers should persuade the state governments for this.