City real estate tycoons show concern over new RERA Act

City real estate tycoons show concern over new RERA Act

Mangalore Today News Network

Nov 21, 2017: Real estate developers of Mangaluru have said that though the Real Estate (Regulation and Development) Act, 2016, is a welcome move, several provisions in the Act, if not properly defined, are likely to severely affect the sector.

At a workshop organised by Karnataka Real Estate Regulatory Authority on the Act and Karnataka Rules made under it here recently, D.B. Mehta, president, Confederation of Real Estate Developers of India (CREDAI), Mangaluru, said they might lead to over-regulation and micro-management of business by the bureaucracy. Such a scenario would lead to further delays in completion of a project, he said.

Speaking for real estate developers in Mangaluru,  Mehta listed out certain provisions in the Act and rules that are their concerns. The provision regarding hosting balance sheets of projects on the Karnataka RERA website appears dangerous. As many as 14 FIRs were filed in 2014-15 by developers in Mangaluru following threats by underworld operatives. If their financial details are made public, the developers will be exposed to further threats. 

On provisions regarding penalty for delayed completion of projects,  Mehta said when Mangaluru faced water famine a year before, the administration had ordered halting all construction activities. Unlike the manufacturing industry, the real estate sector is dependent on many variables. There are occasions when sand will not be available and many more situations where a project could not be completed within the stipulated period. The electrical inspectorate has not issued licenses even for a single elevator in high-rise buildings in Mangaluru for six months thereby delaying commissioning of the projects. In such instances which are beyond developers’ control, there is no rationale in penalising them, he said. There are many other issues with the Act and rules that need to be clarified and unless they are settled, the builder cannot be held responsible, Mehta said. Earlier, Vinoth Priya, Karnataka RERA Secretary, said all ongoing projects should be registered within 90 days of the Act coming into force. The rules came into force from July 11, 2017. Though extensions could be given, it is only after collecting penalties, she said.

RERA Legal Advisor K. Phalakshappa, Assistant Executive Engineer K.G. Sathyanarayana and System Manager John Benedict explained about various provisions of the Act.