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Maharashtra Housing Bill Could Usher in Transparency
To make the real estate sector more transparent in Maharashtra, the state legislature has passed the Maharashtra Housing (Regulation and Development) Bill, 2012. While the Bill will help consumers and investors in terms of disclosures and greater control, the cost of developers would increase because of the compliance expenses.
The new regulations will be applicable where the area of the land proposed to be developed exceeds 250 square meters and more than five flats are proposed to be developed.
The Bill will require developers to disclose project details related to the carpet area, the utility area and details of the floor-ceiling index.
Every promoter who intends to construct or is constructing flats will have to disclose the nature of the title to the land, including encumbrances, if any. The promoter will have to give information relating to number and size of plots, layout plan, carpet area, utility area and details of floor-ceiling index and TDR consumed. The details of the architect, structural engineer, contractors involved, etc, and building-wise time schedule of completion of each phase of project and schedule of connectivity to municipal services, lifts and other fixtures. The Bill also places restriction on any transaction, including sale and marketing of flats in a new project, without prior registration and display of the project on the website of the housing regulatory authority.
The Bill mandates that the promoter shall not make any alterations to the structure described in the agreement with the buyer. Moreover, the promoter shall not construct any additional floors or wings that are not disclosed in the agreement, without the prior consent of all the buyers in such building. The builder cannot do any alterations to the layout including location of recreation ground, park, garden and playground disclosed along with the building plans to the buyers.
To give more teeth to customers, the Bill mandates that in case of failure to give possession of flats within specified time or further tie agreed upon by the parties and a period of three months thereafter, shall make the promoter liable to refund the amounts already received with interest rates, subject to a maximum limit of 15% and additional penalty, which will be determined by the regulatory authority. In case of failure to complete construction of the project and obtain occupation certificate within the date specified in the agreement, the promoter will have to refund the amount received with interest rates.
The Bill also makes a provision that in case of failure of the promoter to complete the project, a legal entity can be formed by people who have booked the flats who will take over the possession of the project. To cut down on bulk purchases and reduce speculation in pricing, the promoter can take a maximum advance of 20% of the sale price prior to entering into a written agreement for the sale of property. The builder will have to give building-wise schedule of completion of each phase of the project and schedule of connectivity to municipal services, lift and other fixtures.
Financial Express, New Delhi, 24-07-2012