KOCHI: Even as the Real Estate (Regulation and Development) Act, 2016 came into force on May 1 to protect the interests of consumers, the apartment owners’ apex body has strongly opposed some of the provisions in the Act. According to the Apartment Owners Apex Association, the provision that a builder can use 30 per cent of the funds collected from buyers as per their wish will lead to serious fraud.
The Association has demanded that the full amount collected from the buyer should be deposited in an escrow account. They have also demanded inclusion of a few other important provisions which were missed out in the Act.
“Though the Urban Development ministry proposed 92 sections for the Act, only 69 of them have been included. The Act will be comprehensive only when all the sections are included,” said V.K Sankarankutty, president of the Association.
However, the Association welcomed the Act as it would help to regularize the realty sector to a certain extent.
Though the Act aims at protecting the rights of buyers, mandates registration of projects including those that have not got completion or occupancy certificates, it has several loopholes, according to the Association. The Act does not cover long-drawn incomplete projects.
The Act also specifies formation of a Real Estate Regulatory Authority and Appellate Tribunal within one year. The States have to frame the operational rules within six months. The Regulatory Authorities will be responsible for disposing complaints in 60 days and Appellate Tribunals will be required to adjudicate cases in 60 days.
“Though Authorities and Tribunals have been proposed, its roles, powers and constraints are yet to be defined. As the builders can use 30 per cent of the funds for other purposes, anyone can still cheat buyers, after collecting the initial funds,” he added.
