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Builders take Centre to court, say RERA illegal since it is a ‘retrospective’ law

Builders' demand to exclude incomplete projects was turned down by the Centre saying the law was enacted to bring relief to crores of home buyers.

, TNN|
Updated: Jul 24, 2017, 10.46 AM IST
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Till now 22 states and seven Union Territories have got proper or interim regulators and real estate projects can be registered with them.
Till now 22 states and seven Union Territories have got proper or interim regulators and real estate projects can be registered with them.
NEW DELHI: A bunch of builders have approached two high courts challenging some of the key provisions in the Real Estate Regulation Act (RERA) including bringing all "ongoing" projects under regulation and penalties for failure to register such projects. They have pleaded that these provisions have retrospective effect since the projects were started when there was no such law and hence it's illegal.

Earlier builders' demand to exclude incomplete projects was turned down by the Centre saying the law was enacted to bring relief to crores of home buyers who had been waiting for their flats for years, even after making full payment. According to the law, the mandatory registration of incomplete and new projects with the regulator will have to be done by August 1, else the builders face the risk of paying penalties.

The builders have been opposing this provision amid reports that most of them are cash strapped. Moreover, the law brings transparency and accountability and property developers have to give fresh timelines for completion of projects. The timelines will have to be adhered to.

While Builders and Developers Welfare Association has filed a PIL in Madhya Pradesh High Court, Swapnil Developers has challenged provisions of RERA in the Nagpur bench of Bombay High Court. These cases are coming up for hearing in the next one week.

Sources in the housing and urban affairs ministry said RERA is not a law with retrospective effect since it covers all projects, which have not got completion certificate by May 1, 2017. Secondly, the penal provisions come to effect only after the law came to existence.

Till now 22 states and seven Union Territories have got proper or interim regulators and real estate projects can be registered with them.

Builders have challenged the Centre's right to enact the law relating to land, which is a state subject, and how submitting details of projects to the regulator would amount to infringement of right to privacy.

"The law came into force in March 2016 and there was enough time to complete the ongoing projects. The law says the builders will have to give fresh timeline while registering all projects including the ongoing ones," a government official said.

He added that the law has been made under the relevant constitutional provisions of the Concurrent List and the ministry had even obtained opinion of the law ministry in June 2012. "The RERA does not provide for matters relating to 'land' or 'local authority'. It aims to regulate the contractual obligations between the builders and buyers. It focuses on resolving disputes in the sector," the official added.
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