Hyderabad: The Telangana state government has altered penalty clauses prescribed under the Centre’s Real Estate (Regulation and Development) Act, 2016 in favour of builders. In this, it appears to have followed in the footsteps of AP, Bihar, Gujarat, Madhya Pradesh, and Maharashtra.
Interestingly, GO Ms No 202, which notified the rules and was issued by the municipal administration and urban development department of TS, was kept secret and not uploaded on the GOs website till Thursday, when the GO was issued, but backdated to July 31, 2017, to comply with the Centre’s deadline.
The Act made by the Centre in 2016 recommends up to three years imprisonment for builders, or fine up to 10 per cent of the estimated cost of the real estate project, or both, in case of non-compliance with the Act. The TS government in the notified Rera rules added a compounding of offence clause to avoid the imprisonment and penalty.
Penalty fixed at 10% of project cost
It has fixed 10 per cent of the project cost as penalty so that builders could avoid imprisonment.
The government altered the ‘ongoing project clause’. While the Central Act stipulates ongoing projects that had not received completion certificate till May 1, 2017, must come under Rera, the TS government has stipulated that only those projects that started after January 1, 2017 will now come under Rera.
As a result, home buyers who have been kept hanging for years by builders cannot avail of Rera. TS rules do not mention payment schedule for purchase of property.
The government has to call for objections on these draft rules after making them public, which gives the public the chance to voice its opposition.
All builders have to register their projects under Rera, including real estate agents/ brokers. The government will have to set up a state-level appellate tribunal to receive complaints and resolve cases.
