Looking WAY BACK < 2012 !
B/F
@praja.in >
http://praja.in/en/projects/2011/08/04/lacunae-karnataka-apartment-ownership-act-72
http://praja.in/en/projects/4448/announcement/real-estate-regulator
http://praja.in/en/projects/4448/announcement/real-estate-regulator
This is sent as an Attachment to THE
FEEDBACK MAIL TO responseonrealestatebill@yahoo.in>
I. 1. The more times one care to
read, own initial conviction gets increasingly strong and fortified;
in that, despite the attempt made/impression given to the contrary by the media
through articles, etc. on the subject, the Bill (of 2011) does not seem to
provide clearly and adequately, even if not with a wholesome set of teeth, at
least sufficient teeth to make the regulatory authority (RA) really work
effectively and forcefully; so as to fulfil the very basic objectives of
creation of such an authority. Such objectives, as set out in the preamble and
noteworthy among them are, - (a) ‘to ensure sale of ...in an efficient
and transparent manner’, and (b)’to protect
the interest of consumers in..’. For an appreciation /justification of such
a view/reaction, what one needs to do is to mindfully go through,- first
chapter by chapter, then section by section, and then, word by word used.
2. Among others, jutting out are
these:
Sections 63 and 64> These confer
on the 'appropriate government' (i.e. state government) very wide and sweeping
powers. They have the inherent potentials for the state government to, at its
will, dictated by its own philosophy and approach, supersede the RA, thereby tending
to downright override / veto the exercise (by the RA) of its powers
independently, impartially and without bias.
Chapter VI> does not bear out any
effective, or in any case, enough safeguards, for rendering the institution of the
RA strong enough to successfully implementing and accomplishing the laudable
purpose(s) of the proposed legislation; seemingly opposed to/belying what is
being tom-tom med with a big noise in certain quarters.
Sections 70 to 73> what should be
of concern is the discouraging purport and import of these sections. In one's
sincere perception, they do not seem to provide any useful help to achieve the
goal of the RA successfully working towards accomplishing the objectives of the
legislation on the anvil.
For driving home what is sought to be
conveyed, one is obliged to recall the bizarre story, given
wide publicity in the media, of the open battle of wits (no wits !)
that came to be fought, not long ago, between the two most powerful of all
extant regulatory authorities namely, SEBI and IRDA. The point to be
specially made a note of is that, - those are the two authorities established
by law and commonly acknowledged as profoundly 'central' authorities,-not a
'state authority' like the one intended for realty sector,- with its
jurisdictional powers extending to the country as a whole. For an insight
into that story (rather the inside-story), though now may have been forgotten,
one may read >
In a nut shell> The point requiring to be
stressed is this: Keeping the above referred episode in mind, every conceivable
precaution should be taken, by having in-built safe guards in the enactment
itself, so as to ward off any similar, not otherwise unlikely, confrontation, -
that is between the RA and the appropriate government (of the state(s)).
The most disturbing of all concerns
is that, the Bill, on which comments have been invited, is quite incomplete. With
almost every one of the host of 'Rules' and 'Regulations' spoken of in the Bill
(ref. Section 2 (zf), (zg)) - WITHOUT WHICH THE LEGISLATION REMAINS INCOMPLETE, HENCE CAN ONLY
BE REGARDED AS STILLBORN - to one's knowledge yet remaining to be framed and / or made known,
what is in store is anybody's guess; a wild one at that. For, as truly
said, - devil is (OFTEN LURKS) in details.
Other
comments:
II. IT IS SADLY OBSERVED, DRAFTING HAS BEEN DONE IN
A GLARINGLY LIGHT-HEARTED AND CAVALIER MANNER.
IN SO FAR AS IT DEALS WITH 'UNITS' OF BUILDING(S),
TO WHICH THE LEGAL CONCEPT OF 'CO-OWNERSHIP' ESSENTIALLY APPLIES, THE MOST
CRUCIAL ASPECTS NOT COVERED OR EVEN BORNE IN MIND ARE THE FOLLOWING:
1. ALMOST EVERY ONE OF THE 'STATES' HAS ITS OWN
ENACTMENTS, RULES, AND REGULATIONS, ALREADY IN PLACE, ON ITS INDEPENDENT
STATUTE BOOK.
EVEN THE VERY SCHEME OF THINGS RESPECTIVELY
UNDERLYING THEM, ARE NOT UNFORM BUT VARY; IN SOME RESPECTS, ALSO WIDELY.
2. SO FAR AS ONE KNOWS, IN SOME OF THE STATES (E.G.
MAHARASHTRA AND KARNATAKA)THE 'UNITS' OF BUILDINGS THUS FAR GIVEN DUE LEGAL
RECOGNITION / SANCTION, AND COVERED BY THE REFERRED SPECIAL ENACTMENTS, ARE OF
TWO (only two) DISTINCT TYPES - FLATS and APARTMENTS.
3. ALL THE APPLICABLE PROCEDURAL REQUIREMENTS IN
REGARD TO THE SAID TWO TYPES OF UNITS ARE MUTUALLY DIFFERENT AND MATERIALLY AT
VARIANCE.
IN THE BILL, THE FOREGOING ARE NOT FOUND TO HAVE
BEEN PROPERLY FOCUSED ON OR ACCORDED ANY SPECIAL ATTENTION AS ONE WOULD HAVE
EXPECTED; MUCH LESS SUITABLY TAKEN CARE OF/COVERED, SO AS TO MAKE THE REGULATORY
REGIME TRULY EFFECTIVE AND EVENTUALLY SUCCESSFUL.FOR, AFTER ALL,THE REGULATORY
AUTHORITY IN ANY STATE, IF AND AFTER IT HAS BEEN INSTALLED, COULD, FOR OBVIOUS
REASONS,CARRY OUT ITS FUNCTIONS ONLY WITHIN THE FRAMEWORK OF THE SPECIAL
ENACTMENT, RULES, REGUATIONS.ETC., ALREADY IN FORCE IN THAT PARTICULAR STATE,
NOT OUTSIDE OF THEM.
NOTE: These comments, in a manner of speaking, are
no different but more or less go to reiterate some of those points of view
conveyed to the Ministry wrt the earlier draft bill (for reference, see the
Appendix hereto at the bottom.)
4.
CERTAIN OTHER ASPECTS, EVEN THOUGH OF AN ELEMENTARY NATURE, ARE SEEN TO HAVE
BEEN SIMPLY GLOSSED OVER, UNWITTINGLY OR OTHERWISE.
SELECTIVELY, THE FOLLOWING REQUIRE
MENTION:
i)IN
SECTION 2, (m), (n) and (o), the terms “development”, “development charges” and
“development works” have been specially defined (see also,(r),(s)). The purpose
is not known; for, nowhere else in the Bill, the said terms are seen to find any
mention. May be, what has been lost sight of is the fact that, while in the
earlier draft there were provisions for sharing, subject to mutual agreement, by
the parties, of such charges, those provisions have been removed in the revised
draft (presumably after reconsideration)(subject to a double check).
In
section 2 (p), in defining the term “engineer”, in the nature of things, should
it NOT have been specified “civil”.
In
section 2 (y), also elsewhere, “deed of allotment” finds mention. One has not heard;
much less know, of any such ‘deed’ executed for allotment; its purport or
relevance not understood.
ii)
Likewise not at all understood are these as well:
(A) Explanation
under the first proviso in section 3. - ... to be developed in ‘PHASES’...
(THE VERY IDEA AS
MOOTED, ALSO REPEATED IN SEVERAL OTHER CONTEXTS, IS ABHORRING)
(B) As to whether the ‘registration’ harped
on and projected, rightly or wrongly, as the basic requirement for compliance, calls for
compliance in respect of everyone of the several projects a promoter may
undertake, or on a onetime basis, seems to be not clear.
(THIS NEEDS TO BE GONE
INTO, with a fine-toothed comb, AND SUITABLE CHANGES BE MADE, TO MAKE THE
REQUIREMENT EXPLICIT)
(C) Section 7 (1) (b) – “........ of the agreement entered into with the
Competent Authority:...
(FOR
WHAT ONE KNOWS, NO SUCH AGREEMENT , a formal one at that, is presently being
entered into; if so, -SHOULD BE CLARIFIED)
5.
As is common knowledge, there are certain crucial areas where the players in
the realty sector often fail to properly comply with what the state enactment requires,
even if mandated. Some such areas which have come to surface in recent times may
be found covered, in detail, in the Blogs posted @ swamilook, in
public interest.
The following links may be seen to provide useful
clues for identifying such areas:
IN PARTICULAR, DRAFTING OF LEGAL DOCUMENTATIONS,
COMPLIANCE WITH THE PROCEDURAL REQUIREMENTS AS LAID DOWN IN THE STATE (S)
ENACTMENTS- E.G. ONE SUCH AS THE MOST CRUCIAL
ONE- PROMOTER EXECUTION AND REGISTRATION BY PROMOTER OF –
‘DECLARATION’ (IN MAHARASHTRA AND KARNATAKA, IN THE
PRESCRIBED FORM ‘A’)
A close perusal OF THE SEVERAL MATERIAL
COVERED IN THE BLOGS ON THE TOPIC OF –REALTY might help in getting to know of, identifying
precisely, and deciding whether all or anyone or more of them require to be
suitably covered in the proposed enactment and /or in framing the pending Rules
and Regulations.
III. CHAPTER VI (sections 48 and 49)
is seen to contain the ‘key’ provisions, so to say. For, the setting up of a
CENTRAL ADVISORY COUNCIL (CAC) as envisaged, seems to aim at ensuring the
efficacy and eventual success in accomplishing the objectives of the machinery
of the RA.
What calls for an incisive noting is
that, as set out in Section 49, one of the functions of the CAC to be set up, -“shall
be to advise the Central Government on:-
(a) all matters concerning the
implementation of this Act;”
Having regard to the scheme of
things, -if considered in conjunction with the more relevant and supervening
provisions of each of the individual State enactments,- however, the
implementation of this Act, as envisaged, is , in turn, going to be mainly
dependent on implementation of the respective enactment already in force in each State. In other words, in real terms,
what is called for, and to be desirably expected is a profoundly complete and
passionate harmony, co-operation, and
co-ordination amongst all the States on the one hand, and the RA on the other.
What really in store is impossible to say with any certainty; only future can tell?
APPENDIX
Refer to the
reproduced comments in the concluding portion, under the head, - key note @the
Blog
Doc. B
Addendum>
(being sent today, the 7th
instant)
IV. Based on an independent but close
study of the Real Estate Bill (the revised text), in one’s conviction, many of
its features/requirements could not at all be regarded to be new innovations or
freshly introduced. For, most of them are to be found already incorporated in
the extant individual enactments of State(s) (e.g. Maharashtra and Karnataka).
The significantly crucial and the
most important of them, in that order, are these:
1. Procuring from the concerned local
authorities all the necessary approvals and sanctions for development /
construction of a building project
2, Execution and registration of a
‘Deed of Declaration’ in the prescribed Form
3. Execution and registration of an
‘Agreement to Sell’
(Model Form made available)
4. On completion of the project,
before conveyance and giving possession, obtaining a completion /occupancy
certificate from the concerned local authorities
5. Execution and registration of a
Deed of Conveyance
((Model Form made available)
6. Compliance with all other related/connected
documentations/ requirements at different stages of construction; and finally, including
- Advocate’s certificate of ‘marketable title’, ‘no encumbrance’ certificate,
etc. (these are enumerated in the Model Form of Conveyance)
Besides, the State enactment, the
rules framed there under, read together with all other allied regulations do
adequate cover all other connected matters: Contents of Agreement, Deed, and
Procedure to be followed for registration, et al, - to the final stage of
handing over the property to the co-operative society or co-owners’
‘Association’ duly formed and registered.
The extant State enactment(s) cannot,
of course, be rightly claimed to be fool proof, with no lacuna at all. Even so,
none of such lacuna, a few in numbers, could be rightly adduced as an
impediment, a serious one at that, which are so material or of a fundamental
nature as to come in the way of promoters complying with the law. On the other
hand, the largely prevailing non-compliance or by-passing of the law, for
decades now, can only be attributed to the belligerent attitude of promoters,
against it. In no small measure, traceable to also the government’s matching apathy,
and nonchalant behaviour in failing to show any sincerity or make any attempt in
implementation and enforcement of the law. Thus, it is the mutually
contributory and complimenting callousness that has been largely responsible
for the muddled state of affairs; that has gone on merrily, unchecked for
decades.
It is in such an overwhelmingly
disgusting context / vexing scenario that the proposed regulatory regime has come
to be mooted and legislation proposed.
In view of, and keeping in full focus
the foregoing, a truly effective strategy needs to be charted; and suitable
remedial measures be taken.
One has the following primary suggestions
to offer for consideration:
1. Same way as the income-tax
department has done for its purposes of keeping a track of the transactions in
immovable property, the Registry should be used by the RA, as the main gate
keeper, for its purposes of implementation of the proposed enactment, both in
letter and spirit, thereby, in turn ensuring strict compliance with the State
enactment as well.
2. The final formats, as rightly proposed/envisaged
in the Bill, for execution of Agreement to Sell, and for Deed of Conveyance
should be got ready at the earliest and be made mandatory to be strictly
adhered to / followed.
Such steps, if devised in detail, and
decided upon, should hopefully go a long way in ensuring that the procedural
requirements are strictly complied with by the Promoters. Also safeguard and
keep protected the lawful rights and interests of the allot tees / purchasers
as avowed / sought to be secured by the law.
It goes without specially emphasising
that, the key for successful functioning, and fulfilment of its own responsibilities,
the RA should have in place absolutely effective machinery for a constant
monitoring of the entire scheme of things, to its last detail.
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