Homebuyers who had their hopes pinned on the much-awaited Uttar Pradesh Real Estate (Regulation & Development) Rules, 2016, against the tyranny of builders, are now demanding a rollback.
Fight for RERA, a group of homebuyers from across the country, feels let down with the pro-builder rules, which stink of a nexus between real estate developers and the state government.
Abhay Upadhyay, national convenor of Fight for RERA, explains some of the basic problems with the UP real estate rules. "One of the primary demands was to relieve homebuyers of incomplete or ongoing projects," says Upadhyay. "The state government has diluted the rule to an extent where it is of no help to homebuyers."
THE COMMOTION AROUND THE TERM 'ONGOING'
As per the rules:
a) Projects where RWAs or resident bodies have taken over maintenance responsibilities from the builder cannot be considered ongoing.
Upadhyay says that many times RWAs/AOAs take over the society's maintenance even though the project is incomplete. Residents mostly do this to stop paying exorbitant maintenance charges against poor service by the builder. So with such projects not considered ongoing, residents will have to choose between paying exorbitant charges or forgoing inclusion in the RERA rules.
b) Projects where development work has been completed and sale/lease deeds of 60 per cent of the apartments/houses/plots have been executed cannot be considered ongoing.
"Do the sale/lease deeds of 60 per cent of flats deem a project complete? What about the rest of the 40 per cent of the flats?" asks Upadhyay.
c) Projects where development work has been completed and the builders have applied for a completion certificate from the competent authority cannot be considered ongoing.
Upadhyay says a builder can apply for a completion certificate even without completing a project, which is an obvious loophole. It is up to the competent authority to investigate and decide on whether the projects should get a completion certificate. Only those projects that already have a completion certificate should be excluded from the RERA rules.
AMBIGUITY IN PENALTIES FOR DEVELOPERS
a) Monetary penalty instead of imprisonment to violators
As per the rules, a violator can escape imprisonment in lieu of monetary compensation. Homebuyers had accepted this on condition that the monetary penalty be substantial enough to make an impact on the developer. However, according to the UP rules, the amount would be proportionate to the duration of imprisonment. "On what basis will the regulatory authority decide the proportion?" says Upadhyay. "If such powers are left to the discretion of any authority other than the judiciary, it will invite corrupt practices in the system. The builder can easily get out of muddy waters this way."
b) The rules fail to identify the minimum penalty
The rules say the monetary compensation can amount to a maximum 10 per cent of the estimated cost of the project but fails to set the lower limit or the minimum penalty for violators.
c) Full of loopholes
The Ministry of Housing & Urban Poverty Alleviation had rolled out the draft rules of RERA in June 2016. Upadhyay said the draft already had a lot of loopholes that the UP rules repeated. Other than the above mentioned issues, the RERA activist says the rules are laden with many cracks and fissures and is not a foolproof solution.
Many NCR homebuyers who had high expectations from the State Government said they felt cheated as the rules were in favour of the "real estate mafia". "We had hoped for a galloping stallion but received a lame donkey," commented a homebuyer on the current situation.
"We at Fight for RERA demand a rollback and a revision of the rules," says Upadhyay.