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Aug 02, 2012, 10.08 AM IST
CNBC-TV18's Priyanka Ghosh reports the ways in which the implementation of the new Maharashtra Housing Bill will impact the developer and consumer.
The landmark Maharashtra Housing Bill, if passed will replace the Maharashtra Ownership Flats Act of 1963, is expected to be the route for transparency in property transactions in the state. CNBC-TV18's Priyanka Ghosh reports the ways in which the implementation of the new bill will change things for the developer and consumer.
The Maharashtra government seems to be on a mission to make Mumbai's real estate sector more transparent. After overhauling the DCR guidelines earlier in 2012, the Lower House of the Maharashtra Legislature has passed the Maharashtra Housing Bill.
The Bill is aimed at increasing transparency in property transactions and awaits clearance by the Upper House before getting the governor's nod.
According to its proposed regulations, companies are now liable to disclose details pertaining to the title of the land, the layout plan, the utility area and other floor space index details - design and plans, details related to contractors and the kind of materials and technology used.
Further, builders cannot construct additional floors or wings after having entered into an agreement with customers. While the recent change in DCR guidelines met with reservations from some real estate companies, the Housing Bill has been welcomed by developers as it could result in increased sales.
Vikas Oberoi, CMD, Oberoi Realty , said, "We have always been pro-regulator as it will make customers confident. It will make sure that developers walk the talk but at the same time, it is good for the industry as it will result in more sales."
However, according to some market analysts, some aspects of this Bill may not effectively benefit the consumer. According to Edelweiss Capital, "Penal clauses for project delays can still potentially leave buyers shortchanged as the Bill leaves significant elbow room for developers to renegotiate project delivery timelines- the key grouse of a home buyer."
With so many more compliances, the process of obtaining permissions will only lengthen and this might lead to longer project timelines.
While it might be a step in the right direction to protect consumer rights, but home-buyers might end up paying more for their homes as cost escalation is imminent if companies pass on increased transaction costs. The other alternative, of course, is that companies take the initial hit and suffer a negative impact on earnings.
Tags: Maharashtra Housing Bill, Maharashtra Ownership Flats Act of 1963, DCR, Lower House , regulations
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