Original Buyers seek clarity on Rera, builders anxious

Noida: With the central government’s version of the Real Estate (Regulation and Development) Act, 2016 (26.03.2016) set to replace the version of UP

Rera

as notified on October 27, 2016 in the state, homebuyers are well protected.

Rera, as notified by the Union government, is also a notch harsher on the builders as it includes a provision for imprisonment of a builder failing to comply with the Act.

The major impact of reinforcing the Rera in its original format in UP will be the enforcement of Clause 3 of the Act whereby it has been made mandatory for all promoters to register any real estate project with full compliance of rules before sale, promotion, booking, advertisement or commercial deals. Flouting of Clause 3 could lead to a penalty of 10% of the value of the real estate project or a three-year jail term.

Even as builders are up against a Rera that is not kind to them, there is one developer who has welcomed it. Manoj Gaur, NCR Credai president and MD of

Gaursons

, told TOI, “This is a time for transparency and fair play. To continue in this trade one will have to be function in a stricter environment. Only the best will survive. Projects will start getting registered as soon as the regulator is appointed. The process has begun and it is good for the industry in the long run.”

The definition of ‘ongoing projects’ will also be a gamechanger. The definition in the erstwhile UP Rera was soft on builders. It excluded those projects where services have been handed over to the local authority for maintenance; where common areas and facilities have been handed over to the association or resident's welfare association for maintenance; where all development works have been completed and sale/ lease deeds of 60% of apartments/plots/houses have been executed; and where all development works have been completed and application has been filed with the competent authority for issue of completion certificate.

Now, all ongoing projects which are not completed will come under Rera. A new Rera is set to directly impact more than three lakh homebuyers in Noida, Greater Noida and Yamuna Expressway, where there are 60 active builders.

For now, Noida has only one project which is 100% complete and closed. All other projects are at various stages of construction, registration, completion and closure. Very few projects have RWAs, as with partial completion, the maintenance and upkeep of all under-construction or partly completed projects are with the builders themselves.

According to the buyers, meanwhile, even the Rera version favourable to them lacks in clarity on certain fronts. Abhishek Kumar, president,

Nefowa

(Noida Extension Flat Owners Welfare Association), said, Rera was still preserving the builder-buyer contract on the original map of construction.

“Even now we don’t have clarity on the withdrawal mechanism of the money from the 70% escrow account. How will the amount be used? We also do not have clarity on the issue of payment or adjustment of penalty due to buyers because of delayed projects,” Kumar said. Indrish Gupta, co-founder, Nefowa, said, “We demand some clarity on the fate of those buyers whose builders are either in custody or are at large. What is the fate of buyers who are in projects in the hands of insolvent builders.”