The Grading System
The rating system would entail the real estate developers to disclose many things. They would have to reveal the exact source of funding for all their projects and also the completion rate of the project every year. Builders turn ferocious against such grading system.
This act came into power in the beginning of this year, whereas the regulations were issued by the State Housing department in September 2014, at the forefront of Assemble elections.
In terms of appointing a housing Regulatory Authority and Appellate Authority, the state government has not decided anything so far.
It is said by the officials of housing department that they are satisfied with the clause which has to be enrolled mandatorily. Some of the clauses are strongly opposed by the developers.
The displeasure of MCHI-CREDAI and NAREDCO is depicted to the government through letters.
An official of the housing department explained that real estate developers will be ranked on various criterions like construction quality, satisfaction of the consumers and project completion time. He also added that If any complaint is hoard up about any particular developer, then his grade will go down.
A particular clause said that if the projected is not completed in time, the projected can be conquered by the buyers. This clause was mainly objected by real estate builders.
Mandatory Rule
Residential projects getting delayed has become very common in the Mumbai. Therefore as a security against such project delays, it is mandatory to keep unsold, 10 percent of the total number of flats. This is mandatory till a certificate for occupation is obtained.
NAREDCO has also shown its objection in the form of letter to the grading system of developers of the state government. In the body of the letter it has been requested to reduce the percentage of retained flats. The letter also says that it is fine to be graded by private bodies like CRISIL or ICRA, but it is not viable for the state government to grade the builders. Sunil Mantri, the president of NAREDCO also said that it is not correct for the state to ask the financial details amid builders and investors.
It is Maharashtra which first regulated law for the industry of real estate and offered a mechanism of accusation for residential and commercial customers.
On the other hand, the state government’s impediment made the ball to roll and the securities stayed only on paper. Swadheen Kshatriya, the chief secretary of Maharashtra said that new government has taken over and this matter will be studied and action will be taken soon.
Article Source: The Indian Express
Appellate Authority, Confederation of Real Estate Developers' Association of India, Housing regulatory authority, MCHI-Credai, Naredco, New government, Real Estate Developers, state housing department
