Key Clauses In Maharashtra's Draft Regulatory Bill
The Maharashtra government's recently released draft rules under the Real Estate (Regulation and Development) Act, 2016, have got a thumbs up from industry experts and other stakeholders.
Here are the key clauses mentioned in the draft:
- All under-construction projects will be covered under the regulatory Bill, and developers of these projects will have to disclose all information about the previous projects, details of money received and building charges to the regulator.
- A developer has to deposit 70 per cent of the amount received from the buyer in an escrow account. However, if the cost of construction is lower than the amount received, the entire money has to be submitted in the escrow account.
- The construction company can sell parking spaces, provided all the details of the sale are furnished by the developer.
- All the project details disclosed by the developer, amount of work completed and left to be done has to be undersigned by the project architect.
- The cost of the project construction has to be certified by the developer's chartered accountant.
- A developer can withdraw money from escrow account only after receiving certificates from the project architect, engineer and chartered accountant. This money has to be used in the construction of that particular project only.
- It would be mandatory for developers to register their project details within 90 days from the commencement of the Act.
- A developer has to form a cooperative society within two months from the receipt of occupancy certificate, or when 60 per cent of the allottees have taken possession.
As these rules will mandate greater compliance from developers, home buyers, who were so far holding back their investment in under-construction projects, might take a step forward. However, developers have pinpointed certain holes in the draft.
“The draft regulations present a sound document, but it does have some ambiguities which will need to be discussed and sorted out. It should be remembered that the RERA (Real Estate Regulatory Authority) must, by all intents and purposes, protect the consumer in every possible way. One cannot say with firm conviction that this is the case with the current Maharashtra draft rules. Nevertheless, this is still at the draft stage and open to further amendments,” says Kishor Pate, Chief managing director, Amit Enterprises Housing Ltd.
Interestingly, the clause in the Central draft which prohibits the refusal to sell the property to any person on the basis of his/her religion, marital status or dietary preferences, has been given a miss by the Maharashtra government. Apart from this, the provision of disclosing the building approvals and past track records by developers has been removed from the state draft.