No law in force to regulate and control real estate business in Maharashtra

Since central government has notified some provisions of Real Estate (Regulation and Development) Act, 2016 (REA) and repealed Maharashtra Real Estate (regulation and development) Act 2012  (MREA). Some people unnecessary creating confusion that though MREA as been repealed Maharashtra Ownership of Flats act (MOFA ) is still in force. But that is not true. And as MOFA stands repealed by Government of Maharashtra , centre has repealed MREA 2012 and as all the provisions REA 2016 have not been notified , time being there is no law to regulate and control real estate business is in force.

Photo courtsey hindustantimes.com

Even if for arguments sake we accept that Maharashtra government had not repealed MOFA. As per article 254 of the constitution of India, the parliament has all the powers to enact any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.Hence centre repealed MREA 2012. In case MOFA had been in force centre would have repealed it also.

Photo courtsey www.realtorindian.com

Centre didnt repeal MOFA because it was repealed with introduction MREA 2012 it self . In fact MREA 2012 was basically brought in to force because MOFA had failed  to give any relief to flat purchasers against sundry abuses, malpractices and difficulties related to the construction, sale, management and transfer of flats.

Central Government notification

Another argument to believe that MOFA was repealed was the Section 1 (3) of MREA 2012 and REA 2016 are the same. It says that the act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision. Maharashtra government had notified this section while central government has not notified it. That means with this notification itself all the provisions of MREA 2012 including repeal of MOFA had come into force. 

State Government notification

Now it seems that since at present there is no act to regulate and control real estate business in force,the  Government of Maharashtra is planing to designate somebody as RERA. However as The sections of REA2016 that the Centre has notified are related to establishment , incorporation , Composition of  The Real Estate Regulatory  Authority (RERA) , Term of office ,  Salary and allowances payable to Chairperson and Members only .And as it has not notified section related  Obligations, Functions and duties of promoters , Rights and duties of flat purchasers, Penalties for contravention of any section. Even if Government of Maharashtra  designate somebody as RERA it will not be of any use in absence of any regulatory or penalty powers .

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Hurdles in appointment of Real Estate Regulatory Authority in Maharashtra Removed

Any time after 1^st May 2016 the government of Maharashtra may establish Real Restate Regulatory Authority ( RERA )or delegate its power to somebody. On account of present controversy over Maple Groups misleading advertisements under Pradhanmantri awas Yojana ( PMAY) , FIR’s and further drama, it was alleged that presence of RERA would have made significant difference and timely intervention of RERA would have saved several peoples’ hard earned money. However, now with notification dated 27^th April 2016 hurdles in appointment of RERA or delegating it’s powers to somebody have been removed .

Photo courtsey www.thehindubusinessline.com

The Ministry of Housing and Urban Poverty Alleviation (MHUPA) of government of India has brought in to force some provisions of Real Estate ( Regulatortion nad Development )  Act 2016, 

( REA )   as well it has repealed The Maharashtra Housing (Regulation and Development) Act, 2012. The MHUPA has announced this with a notification dated 27 April 2016.With this notification MHUPA has brought some sections of the Real Estate Regulatory Act 2016   into force.

Section 81 read with Section 82 ( C ) Real Estate Regulatory Act empowers appropriate Government to delegate powers of RERA  to any authority  if circumstances exist which render it necessary in the public interest so to do. The MHUPA has brought in to force section 81 to 92 including following provisions of REA  from 1 may 2016.

Section 2 – Definitions, This section deals with the all the terms used in real estate sector

Section 20 to 39 – These sections deal with the Establishment and incorporation of Real Estate Regulatory Authority, Composition of Authority. Qualifications of Chairperson and Members of Authority. Term of office of Chairperson and Members. Salary and allowances payable to Chairperson and Members. Administrative powers of Chairperson. Removal of Chairperson and Members from office in certain circumstances. Restrictions on Chairperson or Members on employment after cessation of office

Section 41 to 58 – These sections deal with the Establishment of Central Advisory Council. Functions of Central Advisory Council. Establishment of Real Estate Appellate Tribunal.

Section 71 to 78 – These sections deal with Power to adjudicate. Factors to be taken into account by the adjudicating officer.

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Will real estate bill really stop unfair practices in housing projects ?

         Yesterday cabinet of India approved real estate(regulation and development) bill. This bill aims to establish the Real Estate Regulatory Authority for regulation and planned development in the real estate sector, to ensure sale of immovable properties in an efficient and transparent manner, and to protect the interest of consumers in the real estate sector.

Earlier also central and state governments have passed so many legislations and policies to regulate this sector. Primary object of all these legislations and policies was to help consumer from being cheated, to provide affordable housing, to give concessions to this sector for benefit of poor. However, none of these legislations or policies could provide shelter for poor. All the benefits or concessions given by governments never reached to its real beneficiary. All the incentives, benefits, facilities, and concession meant for poor were robbed by mafias in this sector. Because no government attempted to check whether these benefits reach to real beneficiaries or not. That was deliberate and hand in glove with real estate mafias.

There were and are several legislations or policies that were meant for affordable housing. e.g. housing for economically weaker section (EWS) , Urban Land ceiling ( ULC) , so many awas yojanas , special Township act , Slum rehabilitation Act (SRA), Affordable housing policy , National Urban Housing & Habitat Policy (NUHHP), Basic Services to the Urban Poor (BSUP) , Integrated Housing & Slum Development Programme (IHSDP), various state housing boards etc. etc.

None of the above could provide adequate affordable housing or housing for poor. There were several benefits and concessions given in all the above schemes and policies but they never reached to real beneficiaries' .Only beneficiary of such benefits and concessions were developers. Anarchy is Urban Land Ceiling Act was introduced to acquire land for affordable housing and it was repealed for the same reason.

As far as Maharashtra is concerned, the first ever DRAFT STATE HOUSING POLICY was published in 2006. The main objective of this policy  to address the issue of providing affordable housing for the Economically Weaker Section (EWS), Low Income Group (LIG), and Middle Income Group (MIG) .Under this policy and In order to encourage private investment in housing sector and to facilitate housing at affordable prices. Incentives for this scheme include automatic Non-agriculture permission, floating FSI in the township, concession in stamp duty, and concession in development charges and so on. However, what fate this scheme has mate? . Who got benefits of all those incentives ?

Can a person from EWS, LIG, and MIG dare or afford to purchase house in such schemes?. Forget about purchasing house in these schemes.Some townships are encouraging investors to buy flats in these schemes. Don't they know why they have received all the incentives? If you ask them why they are encouraging investors instead of real buyers they will shamelessly say that, government has put in any such condition. That is true there is no such condition or any authority to check whether such incentives reach to its real beneficiaries or not.

Not only this but many developers of such schemes even don't disclose correct fact of the schemes ,don't complete projects in time, don't give promised amenities .And there was not any authority to attend such complaints or to take sou motto action on such developers. Now government has come forward with one such authority called Real Estate Regulatory Authority. (RERA)

Hence forth every project above has to be registered with RERA and for that he/she has to declare among other things legal title to the land, land is free from all encumbrances and has to give affirmation that the project or the phase of the project shall be completed as the case may be in accordance with the terms and conditions of the registration.

This Authority may, on receipt of a complaint in this behalf or suo motto or on the recommendation of the Competent Authority, revoke the registration granted if

 (a) The promoter makes willful default in doing anything required of him by or under this Act or the rules or the regulations made there under;

(b) The promoter violates any of the terms or conditions of the agreement entered into with the Competent Authority: Provided that the Authority shall revoke the registration under this clause only on a recommendation received from the Competent Authority in this behalf;

(c) The promoter is involved in any kind of unfair practice or irregularities.

Explanation.-- For the purposes of this clause, the term “unfair practice means” a practice which, for the purpose of promoting the sale or development of any immovable property adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:-

(A) The practice of making any statement, whether orally or writing or by visible representation which,-

(i) Falsely represents that the services are of a particular standard or grade;

(ii) Represents that the promoter has approval or affiliation, which such promoter does not have;

(iii) makes a false or misleading representation concerning the

services;

(B) permits the publication of any advertisement whether in any newspaper or otherwise of services that are not intended to be offered.

In this act, there is also provision of penalty If any promoter willfully fails to comply with or contravenes the provisions in act, he shall be punishable with imprisonment for a term which may extend to three years, or a penalty which may extend to ten per cent of the estimated cost of the real estate project, or with both.

Let us hope this act will really regulate real estate sector and protect rights of consumers also .