Centre cautions Chief Ministers of vacuum if Real Estate Act timelines not met by April 30

With buyers entitled to seek relief under the Real Estate (Regulation & Development) Act,2016 with effect from the first of May this year, the central government has cautioned the States of a serious situation of vacuum arising if necessary institutional mechanisms, as required under the Act were not put in place before that.

In the context of only four States and six Union Territories so far notifying the final Real Estate Rules and complaints of violation of some of the provisions of the Act by some States, Minister of Housing & Urban Poverty Alleviation Shri M. Venkaiah Naidu last week urged the Chief Ministers to take personal interest in ensuring implementation of the Act in letter and spirit. In a letter dated February 9, 2017, to all the Chief Ministers of States, he stressed that “Real Estate Act is one of the most important reforms for the sector, which would bring benefits to all stakeholders. It is therefore, my sincere request to please bestow your personal attention to this matter so that the Act is implemented in time and in the spirit with which it was passed by the Parliament”.

Shri Naidu also cautioned the Chief Ministers stating “Appropriate Governments are required to establish the Real Estate Regulatory Authorities and the Appellate Tribunals, maximum by 30th April, 2017. The timelines are important as the Act would commence its full operation from 1st May, 2017and in the absence of Rules and Regulatory Authority and Appellate Tribunal, the implementation of the Act would be affected in your State, leading to a vacuum in the sector”.

The Minister in his two page letter to the Chief Ministers said that the Real Estate Act, 2016 was one of the most consumer friendly laws passed by the Parliament and its timely implementation is the responsibility of both the Central and State Governments and this would not only provide the much needed consumer protection, but would also give a fillip to the sector, benefitting all the stakeholders.

Ministry of HUPA had organized a consultative workshop with all the States/UTs on the 17th of last month to review the progress made by them and apprise them of their responsibilities under the Act and the timelines to be met to enable the consumers take benefits of the Act from the first of May this year and the need to ensure that the Rules were not in variance with the spirit of the Act.

Over 60 Sections of the Act were notified by the Ministry of HUPA on May 1st last year, including Section 84 under which States were required to notify Real Estate Rules by October 31st last year thereby setting the ground for implementation of the Act.

So far, Rules have been notified by only four States and for six Union Territories. Ministry of HUPA, mandated with the responsibility of making Rules for UTs without legislatures has done so for Andaman & Nicobar Islands, Chandigarh, Dadra & Nagar Haveli, Daman & Diu and Lakshadweep while the Ministry of Urban Development has done so for Delhi. A few other States have been reported to have notified only Draft Rules seeking views and suggestions from stakeholders.

States that have notified final Rules are: Gujarat, Madhya Pradesh, Kerala and Uttar Pradesh. The Ministry has received some complaints of violations of some of the provisions of the Act by some of these States resulting in dilution of the spirit of the Act. The Ministry has referred the complaints to the Committee on Subordinate Legislation of Rajya Sabha. In this back drop, Shri Venkaiah Naidu urged the Chief Ministers to ensure compliance with the Act, as passed by the Parliament.

From May 1st this year, under the provisions of the Act, both buyers and developers of real estate property can approach Real Estate Regulatory Authorities seeking relief against the other for violation of the contractual obligations and other provisions of the Act. For this to happen, Real Estate Rules including the General Rules and the Agreement for Sale Rules, Real Estate Authorities and Appellate Tribunals were required to be in place and in a position to start functioning.