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Hardeep Puri says states have to conform to central RERA, there can be no ‘ambiguity’

As many as 50 projects registered under WBHIRA so far; Real estate developers and agents say they have no choice but to register under WBHIRA to stay in business

Vandana Ramnani @vandanaramnani1

Vandana Ramnani
Moneycontrol News

When the Centre passes a law, the states have to conform to it, ‘there can be no ambiguity.’ said Housing and Urban Affairs Minister Hardeep Puri on September 18. He stated the Centre has written to the West Bengal government to repeal its version of the real estate regulatory Act.

“We have sent a letter (to West Bengal government). There is no ambiguity (that) when the Centre passes a law, states have to conform to that,” he told reporters.


Commenting on the fact that over 50 real estate projects have already registered under the West Bengal Housing & Industrial Regulation Act 2017 (HIRA), Puri said, “They can register but when you pass a faulty law and when it is found not to be legal, I don’t want to go further than that… We have done the legal vetting of the proposal that came to us and based on that we have written the letter.”

The Union Housing Secretary DS Mishra has written a letter to the West Bengal Chief Secretary after the law ministry informed the housing ministry that West Bengal had not taken the presidential assent for the WBHIRA. The letter asks the state government to repeal its version of the real estate act to avoid causing confusion to homebuyers and real estate developers.

Besides the six northeastern states that have not notified RERA and its rules, West Bengal is the only state in the country to have enacted a state Act which almost mirrors RERA except for a few differences pertaining to definition of force majeure and garage.

The state law in Maharashtra was earlier repealed despite a presidential assent and Kerala too did not implement its own Act.

Real estate developers and realty agents in West Bengal say that they have no option but to register under WBHIRA to stay in business.

“There is confusion in West Bengal. Both developers and real agents are a confused lot. As many as 50 developer projects have been registered under the state Act and the same number of agents have applied for registration and paid the fees,” an agent active in West Bengal told Moneycontrol requesting not to be named.

“Until we register ourselves we cannot work in West Bengal after September 1, we cannot book unregistered properties for our clients. Similarly, developers cannot sell units in a project that has not been registered under WBHIRA. We are scared that we do not register, we may have to pay penalty. So, we are compelled to register. Right now, we are working basis the applied for registration numbers,” he says.

As for the fees paid to the West Bengal government treasury as registration fees, both builders and agents say that whichever law prevails, the fees will continue to be paid to the state treasury.

“Only the name will change from WBHIRA to RERA in case the state decides to register projects under RERA. The buyer-builder agreements may also have to be revised but it does not seem that the state government is willing to relent anytime soon,” says a builder not wanting to be named.

Representatives of several homebuyers groups, including Fight For RERA, have also written to the union housing minister that they fear that RERA may become redundant if West Bengal is successful in implementing its own version of the Act.

Members of the Central Advisory Council, constituted by the housing and urban affairs ministry under RERA on May 14, have asked the minister to notify the subcommittee at the earliest. The sub-committee was constituted with the objective of persuading the Bengal government to adopt RERA, besides overseeing its implementation in other states but was not notified.

“We are concerned about RERA being rendered redundant if the state of West Bengal is successful in implementing WBHIRA in place of RERA, since it may prompt other states to follow suit,” said Forum for People’s Collective Efforts, Gurugram’s Federation of Apartment Owners Association, Namma Bengaluru Foundation (members of the CAC) in their letter to the minister.

“It is time to notify the subcommittee set up when the CAC met on May 14, 2018, to ensure that buyers in West Bengal enjoy the same rights as other buyers in the rest of the country,” says Abhay Upadhyay, president of FPCE.

“How can a state not implement a law passed by parliament. This can lead to other states follow West Bengal and due course make RERA redundant. Three years ago, we initiated a movement Fight for RERA for the passage of RERA by the parliament. Now we are fighting to save RERA from being made redundant. We hope the central government and law makers would understand that seriousness of the issue and take necessary steps to save RERA,” Upadhyay said.

“If the state of West Bengal is allowed to go ahead in its endeavor to implement WBHIRA, which is diluted to favour developers and not RERA, it will not only put a question mark on the supremacy of Parliament but also put in danger the entire federal fabric of our democratic set-up since it may open gates for other states to not follow laws enacted by Parliament. Moreover, this will show the way to other states to bypass RERA which is touted as a game changer for the real estate industry and which is currently suffering from credibility crisis,” he said.

Experts say that HIRA defeats the very purpose of Central RERA. “The first is to do with the force majeure clause or unforeseen circumstances under which a builder may not fulfil conditions laid down under the contract signed with the homebuyers. RERA clearly lays down the circumstances of force majeure such as war, flood, drought, fire, cyclone, earthquake or any other natural calamity. HIRA has made an addition to this clause and talks about ‘…any other circumstances as may be prescribed’. This is a major dilution.”

Sale of open space as a garage or parking area was an issue dealt under RERA. HIRA has interpreted it differently. RERA defines garage to mean a place within a project that has a roof and walls on three sides for parking any vehicle but it does not include unenclosed or uncovered parking area, especially open parking.

HIRA, on the other hand, states that car parking area means such an area as may be prescribed and defined garage to mean garage and parking space as sanctioned by the competent authority.

West Bengal is the only state in the country that has not accepted RERA. The Central Real Estate (Regulation and Development) Act (RERA) came into effect on May 1, 2017, exactly a year after it was passed by the Parliament.

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First Published on Sep 18, 2018 07:07 pm
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