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Relief for homebuyers? This is how states, UTs are trying to ‘circumvent’ the new Real Estate Act

There are several hurdles which stand firm on the road of implementation of the Real Estate Regulation Act across the country.
India TV Business Desk New Delhi May 01, 2017 12:27 IST
India TV Business Desk

While the government has termed the Real Estate Regulation Act (RERA), 2016, which comes into force from today, as the “beginning of an era where the consumer is the king”, there are several hurdles which stand firm on the road of implementation of the law across the country. 

So far, only 13 states and UTs have so far notified the rules. The states that have notified the rules are Uttar Pradesh, Gujarat, Odisha, Andhra Pradesh, Maharasthra, Madhya Pradesh and Bihar.

Of the 13, only three states – Maharashtra, Madhya Pradesh and Rajasthan – have appointed a housing regulator. Besides, none of the states apart from Maharashtra has set up a website where developers and brokers can register or apply for new projects under the new Act, says a Live Mint report.  

Furthermore, the rules put forward by states have sidestepped many provisions of the law, keeping most of the ongoing real estate projects outside its ambit. 

For example, Haryana's draft rules, notified last week, have completely left out disclosures by builders on the sanctioned plan, layout and specifications at the time of booking with all subsequent changes till date.

Similarly, in Maharashtra, a provision has been included to allow builders to take out or divest from a project after occupancy certificate has been issued. This means, the builder can pull out its entire investment before completion of common areas, facilities and amenities.

In Uttar Pradesh, the norms related to compounding of offences have been diluted as no specific amount has been mentioned. 

“There is provision for 'up to' (a certain amount), which means it may even be zero. This will encourage corruption as quantum of money to be paid will be at the discretion of the authority,” Abhay Upadhyay, president of Fight for RERA, the nationwide home buyers' body, told Times of India.  

On the other hand, many states are yet to catch up with the infrastructural and resource demand to implement the new law. Meanwhile, most builders and real estate agents said they are still struggling to understand the regulations and are in early stages to comply with the new RERA. 

On reports that key provisions have been diluted by some states, a Ministry of Housing and Urban Poverty Alleviation (HUPA) spokesperson said that it was pointed out to those states and they have assured the ministry that it would be corrected.

Those states which have not notified the rules will face public pressure and even people could approach the court in the matter, he added. 


The Indian real estate sector involved over 76,000 companies across the county.

Some of the major provisions of the Act, besides mandatory registration of projects and real estate agents, include depositing 70 per cent of the funds collected from buyers in a separate bank account for construction of the project.