State govt in a fix over housing sector

Published: Dec 19, 2011, 07:06 IST | Ravikiran Deshmukh |

The state government's intention to enact a law to rein in the housing sector via a bill stands defeated.

The state government's intention to enact a law to rein in the housing sector via a bill stands defeated. The state, which was about to introduce its own Maharashtra (regulation and promotion of construction, sale, management and transfer) Act, 2011 during State Legislature has no option but to put its plan on hold for a while now because of the centre. 

However, the state, via its representation has taken a strong objection to the UPA government's Model Real Estate (regulation and promotion of construction, sale, management and transfer) Act, 2011. In September 2009, the centre had circulated a draft of the act, putting the onus on the states to enact it. Ironically, now the centre wants to enact the legislation and want states to follow it, said a senior Democratic Front (DF) government functionary.

Clearly, the state has not been able to digest the fact that how the centre can encroach upon its jurisdiction to enact laws concerning housing sector. In a recent communication to the centre, the state has informed the Union Ministry of Housing and Urban Poverty Alleviation that its own act would promote healthy development of the housing sector with a mechanism to regulate it through an authority and deal with grievances of buyers. 

When the state was contemplating to regulate housing sector, centre, however, wants to regulate all types of buildings and structures, including residential and commercial. The centre has argued that its draft was well within the constitutional premise on centre and state relations.

Not to be outdone, the DF government has argued that to regulate the housing sector was a part of the schedule II of the concurrent list, according to which development and regulation of real estate projects and its control was the prerogative of the state government. 

The state has objected to certain provisions from the central draft that says 70 per cent of the amount collected from buyers for a real estate project will be deposited in a separate account to be maintained with a scheduled bank. The state is against such a monitoring mechanism. Moreover, the state also disapproves a suggestion that the government will take over the project after cancellation of registration of promoter. This will unnecessarily add up to responsibility on the state to carry out the remaining development, which seems impractical. 

The proposal to blacklist a promoter for any wrongdoing may not go down well when the draft says registration for a project will be revoked. It may jeopardise investors' interests and add up to responsibility of the government to complete the remaining project, contended the state. Significantly, the state strongly objects to setting up of Appellate Tribunal at the central-level. It will be more apt to have two levels of grievance redressal and dispute resolution at state-level to ensure speedy justice, it says. 

The state draft proposes that it will be mandatory for the builders to inform the buyers about the exact area, the details of the construction plan and title of the land. The regulating body proposed under the act would ensure that the builders do not change the rate at which the buyers are sold the flats. 

Both, builders and architects will be held liable for any type of cheating with the buyers and will be liable for punishment with a fine and imprisonment. Howsoever sincere the efforts to introduce the act may be, but it appears that state is also buckling under pressure from builders' lobby that doesn't want to be reined in. Above all, it is not that easy to offer any relief to the hapless buyer, who puts in his hard-earned money to buy his dream home.

The construction lobby, it appears, always manipulates the things in its favour. Also, it may not be wrong to say that several from within the political arena and administration have made huge investment in the construction sector for sure gains. The promise, made by the state to set up a body to regulate housing sector still remains a dream when the housing policy was announced way back in 2007. The DF govt may have gained some mileage in 2009 General Elections for making such promises, but it will have lot to answer before the upcoming one. 

-- The writer is Political Editor, MiD DAY

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