With the deadline for states to formulate rules under Real Estate (Regulation and Development) Act (RERA), 2016 nearing, realtors have urged Gujarat government to frame rules. The developers have also raised concerns over certain provisions regarding ongoing projects under the Act, which will come into force from May 1, 2017.
The Union ministry of housing and urban poverty alleviation had set the deadline of October 31, 2016 for readying rules by various states.
Real estate developers under the aegis of Gujarat Institute of Housing and Estate Developers (GIHED), and the Ahmedabad chapter of The Confederation of Real Estate Developer's Associations on India (CREDAI) recently met the state's deputy chief minister Nitin Patel to discuss issues concerning the industry.
"The deadline for state-level rules under the Act is coming closer. So, we requested government to frame rules for the state," said Dipak Patel, president, GIHED-CREDAI. When contacted, the deputy chief minister said that the rules would be prepared within the given deadline.
The developers are also opposed to the provision of maintaining 70% of sale proceeds into an escrow account in case of ongoing projects. "It would be difficult to comply with this norm as sales proceeds of many ongoing projects would have been utilized for various project development purposes," Patel added.
The registration rules under RERA require that all approvals, including passing of project plans, be given on the basis of carpet area. Currently, all the project plans are passed taking built-up area into consideration. "Developers may have to face problems after the implementation of the Act as they cannot change plans already passed by competent authorities on basis of built-up area," he said.