Monday, April 30, 2012

Maharashtra Housing Act 2011






Believe me, that was a happy age, before the days of architects, before the days of builders… Seneca

Many will be surprised by a builder mentioning this quote but the quote from the great thinker always amaze me. Especially with the current mentality of the society towards the builders & the head lines this specie makes does go on the line of the quote. Recently there was this typical message forward joke which I remembered when I read the head lines of the news about Housing regulatory Act/Bill announcement. It will be known as “The Maharashtra Housing (Regulation & Development) Act 2011.”  The joke was something like this...A person was calling at home of his builder continuously inquiring about the builder! After few calls the builders wife annoyingly scowled that I have told you he is passed out & no more still why are you calling & asking for him? The man replies "Kyoki ye sunaneko achha lagata hai!" (Feels good to hear those words again & again that he is no more). Many of my collogues wont like this joke & yes as a builder I too wont like to become such builder with such unhappy customer! But joke apart this shows the attitude of the society towards the builders & building line & the reputation it has earned in the minds of common man!

If you read the head lines then they too go along with the joke as it says "Finally builders are under tight noose of law" or “Here comes the control tool over the builders" or " Now the common man can breathe happily from builders grip". My my! Is this bill for an industry creating 2nd largest employment as well turnover in the Countries financial growth or for controlling some gangsters running their racket! Agreed there have been some nasty examples about land grabbing as well illegality in land deals but at the same time thousands of people are living in their homes at peace & daily there are hundreds of deals happening with both sides happily entering in to agreement of real estate is a fact too! Here many will say what both sides? In real estate there is only one side & that’s builders! Well may be a truth but partial. My write up or columns are never to justify builders act as that’s a social crime in this city as well in our country! Leave the sarcasticness in my statement yet any business has not only two sides but many of them & especially this Industry though its not even acknowledged as Industry yet for the sake of writing I am considering real estate as an Industry. The kind of exposure to various laws as well Govt NOC's this industry has to undergo is simply incomparable with any other Industry! And if you see any of the NOC's or condition every Govt agency or public body puts in them, it's clear that they wants all benefits from the growth of real estate segment but don’t want any responsibility or burden on them!

I can give hundreds of such example & simplest is any local authority sanctions plan of new building have all the premiums, development charges for the same & yet get an undertaking from the developer that water, drainage, road ,electricity etc every thing will be his responsibility! What kind of deal this is & who is going to have regulatory bill on such kind of sanctioning? Take a look the way any city's real estate is growing & compare the same with infrastructure around, even a five year kid can tell the gap & then we tag builders with all names for not being able to give adequate facilities to the residents but have we ever thought of who is actually lacking in the job! Then there is always allegations about the various fronts where builders are non transparent ,one of them is area especially salable area. Then let me clear MOFA i.e. Maharashtra Ownership Flat Act makes it mandatory to mention carpet area in every agreement, so there is no question of hiding it. If any developer is not mentioning it then its flat purchasers duty to ask him so! Unfortunately we are more clever or keen in purchasing even vegetables but when it comes to purchase of own home we are least bothered about such technical aspects neither seeks guidance from any experienced person! Here also see the differences on stance taken by authorities about the area norms, mostly all governing bodies like PMC/Town planning recognizes FSI which is built up area without balcony or terrace & accepts premiums on the same & at the same time they charge premiums on balconies, terraces, staircase, lift rooms & even parking! The revenue department also considers stamp duty of built up area considering all these, then where is question of challenging salable area & painting builders at fault for not using just carpet area while selling?

If we want to regulate something it can’t be one way! We have to get all the agencies & builders on one scale first then only we can expect fair practices is what I feel. Again I repeat this column is to discuss the regulatory bill but before that we should know the ground reality about the situation around so I elaborated this point. Basically the regulatory bill was to make the things very plain & strait for a common man who wants to buy a home for himself. Presently as I mentioned above there is MOFA as well MRTP act i.e. Maharashtra Regional Town Planning Act to govern the real estate development. But both the laws are quite old, MOFA has been drafted 1963 when as the quote says the term builder wasn’t present & required lot of amendments pertaining to the today’s life needs as well demands. Then again a lot was required to clear the discrepancies between the procedures followed by the industry as this is the most unorganized segment is a fact. So obliviously the first need was to identify the specie calling themselves as developer! Lets see what difference this particular act has in compare to its earlier versions under different names.

First & most important many definitions of various terms like Carpet Area, Common Area, Project, Registration & many more have been widely covered & clarified. So there will be no discrepancy as what to be considered in carpet area & what not. Parking can be allotted to the flat purchaser is also cleared in the act but not in reserved open spaces. A Housing Regulatory Authority will be formed under this act & it will be compulsory for any developer to register any of his new projects with this authority, without that he can’t launch the project or take the bookings in the same. The developer even can't advertise the project in any form before registration This regulatory body is supposed to clear the registration process within 7 days from the application & the developer will have to furnish all the information i.e. Disclosure about the project. This disclosure will have all the information right from land title details to plan sanction certificate with all the structural drawings, specifications, work schedule etc complete. This whole information about the project will be published on the web site of Housing Regulatory Authority & will be available for any interested purchaser. This will help in getting the term transparency in existence in the working of this Industry.

Also as per the act the developer can’t take more 20% of the total amount of the unit without entering in to registered agreement with the flat purchaser. Also the act requires even the flat purchaser also to get registered with the Regulatory authority. In case of breech of the agreement if the regulatory body founds the developer as guilty then they can cancel the registration of the project & the developer can’t take any bookings for the project. One good provision is the developer can’t give possession of the unit without obtaining Occupation/ Completion certificate from the competent authority whatever system it may be following. This will reduce quite a number of conflicts between the developer, flat buyer & the local governing bodies like PMC/PCMC.

There are some suggestions/provisions in the bill which may lead to confusion or seems impractical at the moment & they are about utilization of the amounts which has received against bookings of the units in the project. Here the act requires the developer to maintain a separate account per project & keep the money taken under different heads accordingly such as MSEB, Water deposit etc! And at end hand over the same to the society or apartment condominium whatever it will be. As those who have multi-projects under one company it will be difficult for them to keep such project wise accounting & what this provision is going to make the difference or how this can stand legally is a question.

Most important is there is creating Competent Authority who will be not below the rank of Deputy District Registrar Officer for a specified area/zone along with establishment of Housing Regulatory Authority. Any of the party can make appeal to this authority in case they feel that there is a breech of contract by opposite party. This Housing Regulatory Authority shall take all possible measures for the growth & promotion of healthy, transparent, efficient & competitive real estate market is what intended from the provision!

What more we could have asked for & there are many more detailings which can't be covered here due to space! But wait, this is just draft of the act & many debates will be there with in detail discussion about every para & provision. All a common man & a common builder like me will expect is a plain & simple functioning where results can be obtained in easy & faster way instead adding one more hurdle in the entire process of building a project! And that is in our own hand as the more transparent the developers will be & more keen & questioning the purchasers will be the easier will be the deal for both of them! Agreed this is the age of builders & developers but let us understand it’s just one side of the coin & other side is the people who will be living in the buildings being build by the builders! So both the sides shouldn’t forget this very fact & act accordingly making the world better even with builders in it.


Sanjay Deshpande

Sanjeevani Dev.

Envo-Power Committee, Credai, Pune

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1 comment:

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