The state government is yet to frame rules for the implementation of the central act to regulate the real estate sector, effectively denying the often-exploited customers the benefit of the legislation
Thiruvananthapuram: The failure of the state government in taking steps to implement the central act to regulate the real estate sector has effectively denied the benefits and protection of the of the legislation to the customers in a sector which is notorious for fly-by-night operators, greedy entrepreneurs and shoddy implementation of laws. This is at a time when several state governments have gone ahead with the implementation of the law.
The Real Estate (Regulation and Development) Central Act came into force from May 1. The act mandates that all existing real estate projects should be registered within three months, by July 31. But this is unlikely to happen in Kerala as the state has not yet finalised the rules based on the central act.
The state government had constituted a Real Estate Regulatory Authority last year under the Kerala Real Estate (Regulation and Development) Act, 2016 but the body became infructuous with the central act coming into force. The state government has now to repeal the state act, frame rules as per the central act and notify them and then constitute a regularity authority as prescribed by the central act. These steps would obviously take time.
One reason for the delay in implementing the central act was the confusion whether it is the local self government (LSG) department or housing department that was empowered to enforce the act. The central act referred to housing department and not local self government department. But the LSG department is more active in the housing sector in Kerala and hence the state government recently decided that the LSG department would implement the act in the state.
While the confusion might sound genuine, there are people who doubt the seriousness of the government’s approach to the very idea of regulating the sector. It remains a fact that the state government, despite passing a law and constituting a body, had not bothered to frame the rules which were essential for the body to do its job. A section of consumers believe that those forces which ensured the state regulatory body remained toothless all these time are active again to thwart the implementation of the central law. "The level of compliance of builders to our directives is very feeble and we are not empowered to take stringent actions owing to lack of rules," said authority chairman S. Ajayakumar
While steps are progressing at a snail's pace in Kerala, many states such as Tamil Nadu, Karanataka, Delhi, Maharashtra, Madhya Pradesh, Uttar Pradesh and West Bengal have notified the rules. Some states have the interim regulatory authorities for initiating registration of existing projects.
The central law contains many stringent provisions than the state law and it even prescribed jail term for buyers in case of default of payments. Even smaller projects come under the purview of the Real Estate Regulatory Authority in the central act. While projects with area of above 1000 square metres would come under the purview of the authority as per the state act, the central act limits this to 500 square metres. Similarly, while the state is applicable for projects with minimum 12 units, the central act is valid for those with eight units.
Even ongoing projects would come under the purview in the central act whereas projects launched after the notification of the rules only would come under the purview of the authority as per the state act.
Both state and central acts prescribe jail term for default by sellers. However, the central act warrants jail term for default in payments by the buyers, too. The maximum jail term is three years under both the acts.
