The Real Estate (Regulation & Development) Act, 2016 (RERA) may have come into force from May 1, but nationwide implementation is still far from complete as only nine states have notified their respective RERA rules so far.
Even among the states which have notified rules, many aspects of the central Act have either been diluted or lack clarity, according to a research report by CRISIL.
Once RERA came into force on May 1, states were asked to notify their respective rules in tandem with the Act to ensure their timely implementation.
As of now, only Andhra Pradesh, Bihar, Gujarat, Madhya Pradesh, Maharashtra, Odisha, Rajasthan and Uttar Pradesh have managed to do so. Union Territories which have complied include the Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep and Delhi NCR, the research firm said.
While Union Territories have maintained the details of the Act, it is not true of the nine states which have implemented RERA so far.
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Crucial aspects of the Act, such as the definition of the term “ongoing projects”, penalties for non-compliance, payment schedule and clause for structural defects have either been weakened or inadequately emphasised.
For example, seven out of the nine states have diluted the non-compliance clause of the Act, which originally provided for imprisonment for up to three years, a penalty of 10 percent on the estimated project cost or both. “Many states have removed the imprisonment bit from the clause and only mention monetary penalties,” Binaifer Jehani, director of CRISIL Research, told BloombergQuint over the phone.
Also Read: Maharashtra Notifies Rules For Housing Regulator, More Than Half The States Pending
But this dilution is better than not having any rules in place, Jehani added. “The way the industry is right now, these rules will also go a long way,” she said speaking about the partial implementation by the nine states.
As for nationwide implementation of RERA, “it is only a matter of time” Jehani said. As some players start abiding by the regulations, homebuyers will expect the same out of the rest, she explained. “The unorganised players will automatically fall in place,” she said.
Also Read: Five Ways RERA Will Impact Real Estate Brokers
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