<p>To possess a house is every Indian’s dream. Exploiting this desire, some dream merchants in the booming real estate sector have been swindling many of them of their lifetime savings. That the sector is totally unregulated in an otherwise overregulated country makes their task easy and buying a house risky. The passage of the central Real Estate (Regulation and Development) Act (RERA) by Parliament in 2006 after seven years of procrastination, therefore, gave them a ray of hope at the end of the dark tunnel. After a long wait, a law protecting home buyers was put in place. It made it mandatory for every realtor to register with the regulatory authority. The company had to give all the details of the project, including the date of completion. It had to deposit half the money collected from the home buyers in a fixed deposit so that it did not use it to float another project before completing it. The Authority had all the powers to deal with complaints. <br /><br />However, as the law came into effect from May 1, these hopes have receded. This is because the states, which are critical for the effective working of the law, are yet to take necessary action to implement the law. Under the constitutional scheme of division of legislative action, land— the key component of construction—figures in the state list. This makes it imperative that the state governments come up with the operational rules to implement RERA. Despite continuous prodding, so far only nine states and six Union Territories have notified their respective RERA rules. Others, including Karnataka, are either dragging their feet or have promised to do so after some clarifications.<br /><br />In some cases, this lethargy reflects reluctance to follow the spirit of the new law. Even those states which have passed operational guidelines have diluted key components of the central legislation. For instance, RERA ensures that home projects for which completion certificates have not been issued come under it. Andhra Pradesh, Kerala and Uttar Pradesh have altered this definition in their notified rules. In the case of Gujarat, the operational rules do not mention any definition of an ongoing project. This may be due to the nexus between the real estate operators and the politicians. The Centre should apply pressure on the states to ensure that the basic structure to operationalise RERA is put in place without delay. If the Centre means business, it should start by putting implementation of RERA in the BJP-ruled states and the Union Territories controlled by it on the fast track. The realtors should not take the home buyers for granted any more.</p>
<p>To possess a house is every Indian’s dream. Exploiting this desire, some dream merchants in the booming real estate sector have been swindling many of them of their lifetime savings. That the sector is totally unregulated in an otherwise overregulated country makes their task easy and buying a house risky. The passage of the central Real Estate (Regulation and Development) Act (RERA) by Parliament in 2006 after seven years of procrastination, therefore, gave them a ray of hope at the end of the dark tunnel. After a long wait, a law protecting home buyers was put in place. It made it mandatory for every realtor to register with the regulatory authority. The company had to give all the details of the project, including the date of completion. It had to deposit half the money collected from the home buyers in a fixed deposit so that it did not use it to float another project before completing it. The Authority had all the powers to deal with complaints. <br /><br />However, as the law came into effect from May 1, these hopes have receded. This is because the states, which are critical for the effective working of the law, are yet to take necessary action to implement the law. Under the constitutional scheme of division of legislative action, land— the key component of construction—figures in the state list. This makes it imperative that the state governments come up with the operational rules to implement RERA. Despite continuous prodding, so far only nine states and six Union Territories have notified their respective RERA rules. Others, including Karnataka, are either dragging their feet or have promised to do so after some clarifications.<br /><br />In some cases, this lethargy reflects reluctance to follow the spirit of the new law. Even those states which have passed operational guidelines have diluted key components of the central legislation. For instance, RERA ensures that home projects for which completion certificates have not been issued come under it. Andhra Pradesh, Kerala and Uttar Pradesh have altered this definition in their notified rules. In the case of Gujarat, the operational rules do not mention any definition of an ongoing project. This may be due to the nexus between the real estate operators and the politicians. The Centre should apply pressure on the states to ensure that the basic structure to operationalise RERA is put in place without delay. If the Centre means business, it should start by putting implementation of RERA in the BJP-ruled states and the Union Territories controlled by it on the fast track. The realtors should not take the home buyers for granted any more.</p>
