Uttar Pradesh revises RERA rules, pro-developer clauses diluted, hefty fines restored

The Uttar Pradesh government has rewritten the real estate regulation rules, doing away with pro-developer clauses that diluted the country’s first-ever law to clean up a sector beseiged with problems of delayed projects.

The new rules, which are yet to get the state government’s nod, bring all ongoing projects where completion certificate was not issued on May 1, 2016 — when the Real Estate Regulation Act (RERA) was notified — under its ambit.

The Samajwadi Party government had earlier tweaked the definition of ‘ongoing project’ to keep a majority of projects in cities such as Noida, Greater Noida and Ghaziabad out of the purview of the real estate regulator.

“Yes, we are ready with the fresh draft. We have already held two meetings to give final touches to the rules and intend to get the necessary approval by May 31,” said Uttar Pradesh special secretary, housing, Mahendra Bahadur Singh.

Mahendra Bahadur Singh is heading a panel formed by the Yogi Adityanath government to rewrite the real estate regulation rules after consumers’ group met the Uttar Pradesh chief minister and told him that instead of homebuyers the rules were framed to favour the builders.

“We have already held two meetings on the subject. The new rules have been framed keeping in mind the people’s aspirations and the government’s commitment to adopt the Centre’s act in letter and spirit,” he said.

As per the Real Estate (Regulation and Development) Act, 2016, an ongoing project is basically a project “for which the completion certificate has not been issued as on May 1, 2016” on the date of commencement of the act. This basically ensures that many home projects which are work-in-process come under the act. However, four ‘exclusion’ clauses (see box) were added in the UP real estate rules 2016 during the Samajwadi Party’s regime to keep a majority of projects out of RERA. These ‘exclusion’ clauses have now been dropped.

Similarly, recommendations on fines and penalties on developers that were earlier watered down, now have been restored as provided in the Centre’s Act.

Other relaxations relating to 70% cap on funds to be utilised by the builder from the money taken from the home buyers have also been reincorporated as provided in the original.

“We have now suggested that a committee, which should also have a representative of RERA, monitor all such expenses by the developer,” said an official.