Thursday, 12 March 2015


The final version of the much-awaited Maharashtra Housing Bill may turn out to be a mixed bag for Developers as well as Home Buyers.
Five years after the idea was first floated only to be canned, revived and tweaked, the State Legislature at last approved the Maharashtra Housing (Regulation and Development) Bill in 2012, which paves way for setting up of a Housing Regulatory Authority and a Housing Appellate Tribunal. Every building construction project will have to be registered on the Authority’s Website followed by full disclosure on Land Title, Layout Plan, Carpet and Common Area and all other Amenities. Only after this the Developers can advertise or sell flats in the new project. Recently a selected Joint Committee of the Maharashtra Legislature introduced over a dozen changes to the earlier version of the bill drafted by the State Housing Department.
The changes meant as a relief to Home Buyers, they have evoked strong responses from both Developers as well as Consumers for different reasons. The panel has added a provision that allows 60 percent of the Flat Buyers to be appointed as an Escrow Agent in case the Promoter fails to complete the project. The Flat Buyers can then go on to appoint Contractors to complete the construction and obtain Occupation Certificate.
They have also extended the number of years for which the Builders are required to provide for maintenance of the building from three to five years. In addition to this, they have increased the penalty in case of violations up to Rs. One Crore including a provision for up to six months imprisonment. 
While Paras Gundecha, President of the Developers’ body MCHI-CREDAI lauded the bill for promoting transparency, he attacked it for its approach towards Developers as why Developers alone should be held responsible and not other Stakeholders such as the Contractor, Consumer or Government bodies?  Most delays occur due to the time taken in getting approvals from the Civic body or State Government. He also strongly objected to the clause allowing the Authority to prosecute Developers. This power should vest with the Judiciary alone.
Housing Society Associations however, have termed the bill as Lackluster. It is basically old wine in a new bottle. Already the Maharashtra Ownership of Flats Act (MOFA) has provisions that can make it mandatory for Developers to ensure transparency in all their dealing with Buyers but it was never implemented. Critics have pointed out that the State Bill is a severely watered down version of the Central Government’s Real Estate Regulatory Bill which comes down more heavily against errant Developers. Once such lacuna in the State Bill is that unlike the Central Bill, it doesn’t allow the Housing Regulatory Authority to put on hold all the projects by a Developer in case of violations.
With a measly budget of Rs. 5 Crores the Regulatory Authority may just turn out to be a toothless body with complaints piling up before using it. Even the revised bill fails to crack down on several important issues such as charging Buyers for Car Parking Spare or selling flats on Super-Built up Area.

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