Andhra Pradesh: Builders to move Supreme Court on RERA exemption

Rajahmundry: Builders registered with Credai will move the Supreme Court seeking exemption in the Real Estate (Regulation and Development) Act (RERA), 2016, on its implementation with retrospective effect, defect liability on workmanship and land title insurance. The Act came into effect from May 1, 2017.

The builders alleged that these aspects are highly impractical and would escalate the cost of housing projects.

The RERA states that ongoing housing projects and ventures, even if they were started one or two years ago or more than that period, will fall under its purview to comply with all norms specified.

The builders say that as the Act came into effect on May 1, housing projects and ventures that got plan approval on or after that day have to fall under its purview as a prospective effect, instead of retrospective effect.

Their main contention is that as there were no stringent norms before the Act came into effect, the builders might have taken up housing projects as per prevailing norms of that time and question the rationality of the provision in the new Act to penalise them for lapses in old projects.   

In AP, the state government has given relaxation in the implementation of RERA for housing structures where laying of slabs was over and also for structures where execution of sale deed and lease deed was done by 50 per cent.

The builders are up against the Centre on the provision of 5-year defect liability on structure and also on workmanship.

Though they accept liability on structure, they are opposing the liability on workmanship.

They say it will be too difficult to maintain standards in workmanship as they require highly skilled and trained labourers who charge more for execution of works and also they are supposed to use branded products.

Such practice will ultimately result in escalation of cost of each housing project and cause more financial burden on buyers. They fear that in case a minor crack develops on a wooden door in summer as they use regular variety of wood for making it, the buyer will approach the RERA Tribunal seeking financial compensation for the lapse from the builder.

Builders say it will create chaos in the construction industry with more buyers approaching the Tribunal seeking relief on one pretext or other. They are ready to accept five-year defect liability on structure but not on workmanship.

The builders are also not happy with the provision on land title insurance, as it is highly impractical with no such system existing at present.

They say there is no company in the country which can insure land title as on today and maintain that the existing norms are enough to see that the land title is genuine as the registration authorities check out before going for registration and bankers will also check before sanctioning home loan.

Credai, AP chapter vice president, Buddiga Srinivas said, “The national Credai has submitted a representation to the Centre seeking exemption on the implementation of the RERA with retrospective effect on ongoing housing projects, defect liability on workmanship and land title insurance earlier. We have not got any response so far. We are getting ready to move apex court seeking its intervention to give exemption on their implementation as they result in cost escalation and cause more financial burden on home buyers.”