Analysis of real estate law-Maharashtra Housing Act 2012
Maharashtra Housing Act 2012-Presidential nod given to the bill. The new rule will replace the incumbent Maharashtra Ownership of Flat Act, 1963.Real estate law experts and builders have given a mixed response.
In first of its kind, Maharashtra has become the first state to introduce a real estate sector state regulator act aimed at safeguarding buyer interest in the real estate sector. The law known as the Maharashtra Housing (Regulation and Development) Act 2012 was passed by the Maharashtra legislative assembly in 2012 and was awaiting nod from the President.
Now with the awaited Presidential nod given to the new act, the new rule will replace the incumbent Maharashtra Ownership of Flat Act, 1963 that was introduced way back in the year 1963. Real estate law experts and builders have given a mixed response to the new bill. While some consider the new real estate law to be a path breaking law that can actually safeguard the buyer interest much better than the existing laws, other believe the new rule is just old wine in a new bottle and has been drafted to help the builder lobby across the state.
Let us take a look at some of the positive and negative features of the Maharashtra Housing (Regulation and Development) Act 2012 and analyze its significance for both buyers as well as real estate developers.
The Significance of Maharashtra Housing Act 2012
The real estate sector of Maharashtra was so far being governed under the Maharashtra Ownership of Flat Act of 1983. The state has witness a tremendous change in the past fifty years with new developments in the real estate sector. The new act once implemented will totally replace the incumbent Act. The Act aims to safeguard the consumer interest with punitive actions against the builders and developers including hefty fines to the tune of Rs. 1 Crore and even imprisonment.
Since there has been a substantial increase in the number of builder-consumer disputes and there has been no real estate watchdog in place by the central government, the Maharashtra Housing (Regulation and Development) Act, 2012 has received tremendous support and praise from all sections of the society and media. The Act if successful could well be regulated in various other states in the future as a state housing regulatory framework.
Important Regulations of Maharashtra Housing Act 2012
The Maharashtra Housing (Regulation and Development) Act 2012 makes it compulsory for all builders to disclose their property title, layout plans as well as full details of the completion plans to buyers at the time of booking. The builder will also have to provide the details to the regulatory authority of Maharashtra Housing (Regulation and Development) Act 2012 who in turn will upload the details on their website.
The prospective property buyer can easily check for all details on the regulator’s website before making any purchase related decision. The provision of uploading all approval details including completion plans and property title details underline the authenticity of the project and will help reduce cheating and deceitful tactics employed by various small time builders.
Another significant rule covered under the Maharashtra Housing (Regulation and Development) Act 2012 makes it compulsory for builders to repair any major defects in the buildings during the first five years of its existence. This would remove any sell and run tactic administered by various builders leading to unsatisfied customers.
The regulatory department of the Maharashtra Housing (Regulation and Development) Act 2012 has ample powers in case of any disputes and can levy a fine up to Rs.1 crore and even a prison term up to three years in case of non compliance of regulations.
Downside of Maharashtra Housing (Regulation and Development) Act 2012
Real estate experts believe that Maharashtra Housing (Regulation and Development) Act 2012 has its heart in the right place but unless the rules can be implemented at the ground, it would largely remain just another piece of real estate regulation.
One of the biggest drawbacks of the Maharashtra Housing (Regulation and Development) Act 2012 is that unlike other sector centric regulators and watchdogs, it remains totally silent on the pricing issue. For example unlike the telecom sector where the tariffs are largely controlled by the central telecom watchdog, the Maharashtra Housing (Regulation and Development) Act 2012 has given a free hand for builders as far as pricing are concerned. Skeptics believe the highly influential builder lobby is one of the main reasons for lack of any pricing element in the act.
With rising real estate prices especially in Metropolitan cities like Mumbai, affordable housing is lacking big time and the Maharashtra Housing (Regulation and Development) Act 2012 would fail to resolve the problem.
It remains to be seen whether Maharashtra Housing (Regulation and Development) Act 2012 can walk the talk and bring any difference in the life to buyers and help their take purchase related decisions. While having a regulatory mechanism with the power to impose fines and imprisonment for the defaulters is praiseworthy, the Act must not remain a toothless tiger and must deliver quick and speedy justice in case of disputes to be effective.
If successful there is a good reason to believe that such regulations would bring a sense of order to the real estate market and similar laws would be enacted across various other states of India.
