Bengal Releases Real Estate Rules, Activists Say It’s Pro-Builder


RERA, Real Estate Regulator, Delhi RERA, Real Estate (Regulation and Development) Act, Homebuyer Friendly, Real Estate Rules, West Bengal, Kolkata, Mamata Banerjee
The WB Government has released its draft RERA rules, which have been slammed by housing activists.

KOLKATA: The West Bengal government has released the draft rules for the State Real Estate Regulator (RERA), leaving it open for public discussion and debate.

The West Bengal Real Estate (Regulation and Development) Rules, 2016 will cover all ongoing projects which have not received completion certificates. The rules mirror the Centre’s RERA in many respects and contain provisions pushing for full disclosure by developers. Some of the key provisions that the draft rules contain are:

  • The promoter will have to disclose the size of the apartment based on carpet area, irrespective of whether they were sold on any other basis earlier
  • Details of the developer’s background, track record including projects completed and ongoing projects as well as details of past and ongoing litigation on the regulator’s website
  • The developer will also have to upload details on the status of the project, number of apartments sold and status of approvals on the site.
  • In case of delays which may lead to a refund of the homebuyer’s investment, the rate of interest payable by the developer will be the State Bank of India’s Prime Lending Rate plus 2%.
  • All refunds will have to be paid to the home buyer within 45 days of such payment being due.
  • Developers and real estate brokers facing imprisonment for violating the State RERA may pay up to 10% of the cost of the real estate project/apartment in lieu of imprisonment.

The government has invited feedback from the public and stakeholders, before finalizing the rules. However, housing activists are already up in arms claiming that the state’s rules are a verbatim copy of draft Rules uploaded by Ministry of Housing & Urban Poverty Alleviation on 24th June 2016 and contain serious loopholes that will impact ongoing projects.

They say that the draft rules allow developers to indicate the time period within which the project will be completed. Critics say this will also allow developers of ongoing projects to give new timelines to satisfy the regulator, disregarding whatever timeline they were working under earlier. Activists are calling for the promoter to provide the schedule of completion given at the time of booking, along with reasons for delays if any, which in turn will make the developer liable for penalties under RERA.

Other key points raised by critics include:

  • Including provisions mandating that the original plans be submitted to the regulator and not last sanctioned plan which may be different from what was promised to homebuyers.   
  • Lack of clarity on whether the 70% money that is to be collected in a separate account for completion of a project, will actually be enough to complete ongoing projects where money  has already been collected and exhausted.
  • Clarity on how homebuyers who have not agreed to a change in building plans will be affected in the case of ongoing projects.
  • The provision on compounding rule for penalties carries the phrase “no proceeding shall be instituted or continued” once a fine has been paid. Critics are seeking clarity on whether this will provide lifetime immunity to the developer.

“There are serious lacunae and glaring loopholes in the uploaded draft which will not be able protect the interest of Homebuyers especially of ongoing projects. Homebuyers expect that Chief Minister Smt. Mamata Banerjee will herself take charge and not let the final rules get diluted in favour of builders as has happened in case of many other states including those ruled by BJP.” says Abhay Upadhyay, National Convenor of the Fight for RERA movement.

The Real Estate Regulator Bill (RERA) came into force on May 1st, 2016 with the mandate that all state governments will formalize Act’s rules and regulations for their respective states by 31 October, 2016. But most states have missed the deadline and are scrambling to release their rules.

Also Read:

Delhi RERA Rules Finalised, Homebuyers Claim It Has Been Diluted

Gujarat, UP Weaken RERA Rules, Home Buyers Furious

From Refunds To No Escalation Charges – RERA Has A Lot For Home Buyers

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