Suggestions invited for THE HARYANA REAL ESTATE (REGULATION AND DEVELOPMENT) BILL, 2013

[s1joshi]

Dear Friends,

As some of our members have already pointed out in various threads, A draft on THE HARYANA REAL ESTATE (REGULATION AND DEVELOPMENT) BILL, 2013 is open for suggestions from general public. There is possibility of this bill to be presented in the current budget session in the haryana assembly starting on the 22nd Feb which is tomorrow..

The draft is available at web link
http://tcpharyana.gov.in/Tentative%20Dr ... 2.2013.pdf

We may not be experts, however we have been among the people who have suffered lot due to irregularities in real estate in Haryana region. We all have been at receiving end so far, and based on our experience we can possibly brain storm together and provide lot of inputs for improvement on the bill. Would request you all to review the draft & share your suggestions for improvement areas, You may send these suggestions directly to DTCP office, or can provide these as response to this thread, these may be compiled and send across as GFWA representation..

You may refer some of the suggestions from Blessu on same at link,
http://www.indianrealestateforum.com/73 ... st106.html

Please hurry up with your suggestions.... We have an opportunity now...

[rtiwari2k7]

Dear GFWA,
kindly add my comment:-

Promoter should not charge any amount from allotee when allotee is reselling or transferring his property to other person

[s1joshi]

Sharing suggestions put forth by one of our highly active GFWA member, Thank you Aashish Kaul for sharing insights...

You may also wish to review draft and send a copy of suggestions you deem appropriate to authorities.

To Date:- 17/02/2013

Financial Commissioner TCP/ Director General TCP
Directorate of Town & Country Planning Haryana H.Q.,
Sec.18, Chandigarh, Haryana

SUBJECT: SUGGESTIONS FOR DRAFT “THE HARYANA REAL ESTATE (REGULATION AND DEVELOPMENT) BILL, 2013”

Dear Sir,
As a citizen of India am deeply moved with your concern to doctrine “The Haryana Real Estate (Regulation and Development) Bill,2013. You have rightly assessed the need to bring in a regulatory body in one of the most needed sector. Each govt. has stressed on “Housing” as one of the most fundamental need of each citizen of our country. We have SEBI to regulate the stock market which caters to only a small/miniscule percentage of our ever growing population, similarly we have NHAI, TRAI etc to regulate sectors which touch the lives of only a small percentage of population, where as housing, a need of every household has some how been ignored, altogether. This effort of your to regulate Real estate is a well come move, which is appreciated by all. Yet, as it is drafted in word and spirit it leaves a lot to be desired to make it is a encompassing, well balanced both in principal as well in the light of rules. Therefore It is prudent to bring to fore the integrities which are not addressed in most encompassing manner to hold this legislature the test of both time and justice.
Following are the main suggestions that beckon introspection:
1) The draft in section 3 states:- No promoter shall book, sell or offer for sale, or invite persons to purchase in any manner any immovable property or part of it without registering the real estate project with the Haryana Real Estate Regulatory Authority established under this Act:

The promoter is defined hereto in the draft as:-
(zf) "promoter" means,-
(i) a person who constructs or causes to be constructed an
independent building or a building consisting of apartments, or
converts an existing building or a part thereof into apartments, for
the purpose of selling all or some of the apartments to other
persons and includes his assignees and also includes a buyer who
purchases in bulk for resale; or
(ii) a person who develops a colony for the purpose of selling to other
persons all or some of the plots, whether with or without structures
thereon; or
(iii) any development authority or any other public body in respect of
allottees of-
(a) buildings or apartments constructed by such authority or body
on lands owned by them or placed at their disposal by the
Government; or
(b) plots owned by such authority or body or placed at their
disposal by the Government;
for the purpose of selling all or some of the apartments or plots, or
(iv) an apex State level co-operative housing finance society and a
primary co-operative housing society which constructs apartments
or buildings for its members or in respect of the allottees of such
apartments or buildings; or
(v) any other person who acts himself as a builder, colonizer,
contractor, developer, estate developer or by any other name or
claims to be acting as the holder of a power of attorney from the
owner of the land on which the building or apartment is
constructed or colony is developed for sale; or
(vi) such other person who constructs any building or apartment for
sale to the general public.
Explanation.- For the .purposes of this clause where the person
who constructs or converts a building into apartments or develops
a colony for sale and the persons who sells apartments or plots are
different persons, both of them shall be deemed to be the promoters;

Thus the Promoter is defined within this Draft act without the scope of putting in the PROPERTY WEB PORTALS like 99acres/Magic bricks/etc who are being increasingly used as a main front to sell these dwelling units/commercial units for the promoter. Also some smart promoters are using Web Portals like, magic bricks, 99 Acres.com etc to leverage such unannounced sale of dwelling units/commercial units even before they have the required license, therefore the regulatory bill should include even these portals as promoters as they are carrying sales for and on behalf of the colonizer and they are deemed promoters, who go to the public to solicit sales of approved or unapproved projects. The state of Haryana made it mandatory the registration of Property consultants and therefore it is only logical that they be also be registered and that these brokers ( as they are called in common parlance) be prudently made to provide their registration for the colonizer who is promoting his project for registration with the regulator. This move would provide effective management of information and consumers would be benefited as it would provide for level playing field to all.

2) Draft section-4 (2(C)) mandates the colonizer to enclose the layout plan of the entire colony that he wishes to construct and develop. It is should further add/mandate the colonizer to show in this layout all features/specifications/common areas/club/parks/schools/facilities as prescribed by the competent authority and this layout shall be final and binding. No colonizer be allowed to change the design, specification, facilities at any stage once approved by the competent authority without the consent of 100% stake holders. This will help address the growing consumer complaints of change in layout by unscrupulous colonizers.

3) Draft Section-4 (2(e)) requires the colonizer to enclose the Performa of agreements proposed to be executed between the colonizer and the prospective consumers. It is important to note that it is practice in the Real estate industry that the colonizers draft, author, present one sided Builder-buyer agreements, where the consumer is not allowed to even make an Iota of change. The terms of such contract drafted by the colonizer totally favour the colonizer at the cost of the allottee/consumer. Recently CCI (Competition Commission of India) in the case of DLF (Belaire Association) gave a strong worded verdict against such unlawful contracts/agreement. It went so far as to modify the terms of the agreement so as to lay equitable grounds for both parties in the contract. Please see the complete order where CCI has found this type of agreements as not only one sided but also abusive, http://www.cci.gov.in/May2011/OrderOfCo ... 92010S.pdf. Therefore, it is only justified for the Regulator to prepare a format (Model Format of the Agreement) for such agreements and only just and equitable agreements be allowed to be tabled under the supervision and control of the regulator, before the colonizer is allowed to register its project for approval by the regulatory body. This will allow complete transparency and result in fewer disputes and effective governance of the regulator in the real estate field. This Performa of Agreement be also mandatory to be made public (available on the web-page/site) on registration of the project, so as to enable the consumers to know the exact details of what they propose to enter into.

4) Draft Secton-4 (2(f)) requires the colonizer to enclose the number and carpet area of the apartment for sale in the project. What is more urgently required by the consumers is not just the carpet area but also the build-up area of the apartment. The colonizer be mandated to furnish complete layout of the apartment intending to sell, with both carpet area and the build-up area so that the prospective buyer can clearly judge the living area versus the total build –up area ratio and therefore make informed decision based on clearly defined facts.

5) Draft section-12 (2), The agreement should be one that is based on natural justice and equity. As stated in suggestion 3, it is only prudent to take cognizance of the CCI model of agreement and on its basis a MODEL FORMAT of BUILDER BUYER AGREEMENT be drafted and legislated, so as to ensure complete transparency and reduce the menace of such abusive and one sided agreements that lead to numerous consumer complaints. Further, as this agreement is prepared by the colonizer under sub-section (1) The colonizer on collection of the application fee/booking amount be mandated to not only provide the agreement to the intending allottee but also it be made compulsory for both the colonizer and the intending allottee to sign this agreement on the day of the first sale transaction/application or booking amount payment.

6) Draft Section-13 (2) In case of any structural defect why is the onus being put on the allottee or the consumer, does the regulator expect each allottee to be a certified structural architect. why not the competent authority, who has passed all building plan approvals not mandated to inspect at each stage and does a compliance audit of the provisions of the National Building code, so that the defects such as structural, civil, electrical and plumbing do not happen. It is the prerogative and duty of the competent authority and the Regulator should oversee its strict adherence. No Building/tower/ colony be given an Occupation Certificate without the due diligence on quality of construction (All parameters, such as civil works, structural etc) should be checked by the competent Authority and give a certification for same before granting OC. Thereafter if still some defects are noted and brought to the notice of the Promoter, the promoter be made liable.

7) Draft Section-14 (1), The Promoter will take necessary steps to execute Conveyance deed in favor with the allottee/s. It would be pertinent to note though all laws (Competent Authority, local Authority , Apartment ownership Act, etc) provide for the same legality, the Real estate colonizers in practice evade this very fundamental rule of law. In Haryana, there are many colonies where the Conveyance deed has become bane of contention between allottees, colonizer and the Local authorities. Therefore it should be made compulsory by the Regulator to the Promoter to furnish relevant approvals to effect/execute Conveyance deed and only thereafter the promoter be allowed to offer possession of apartments/plot etc to the allottees. Further, The regulator should draft a MODEL CONVEYANCE DEED, terms and condition set, for the promoter to abide by. As it is seen, in the current scenario that the colonizer is preparing deeds which are not in keeping with the Haryana Development & Regulation of Urban Areas Act, 1975 and its rules framed therein 1976. Section 11 of the said Act clearly shows the areas that the colonizer has no right over once it has sold its project to the intending allottees, yet the builder through very cleverly worded conveyance deed claims all the common areas and roof rights to itself. This is further, rampant violation of the Haryana Appartment Ownership Act 1983. This has to stop and the Regulator should make necessary provisions in its Act to bring in a MODEL CONVEYANCE DEED FORMAT, so that the consumer disputes resulting from defective deeds does not take place.
8) Draft Section-15, it is pertinent to note that when an intending allottee makes the decision to buy into any of the proposed scheme, he makes the decision not only on the bases of the layout and space of the apartment but also the other incidental common areas and facilities, therefore it is as much important for such intending allottee to get possession of not only his apartment/plot but also the other areas like club, gym, nursery school etc. Thus it is important that the Regulator enhances the scope of POSSESSION of Apartment/plot with all incidental common areas and features, for making this ACT comprehensive and definite.
9) Draft Section-16, under the obligations of the allottees he is liable to make regular payments without default, as per the terms of Agreement executed between the promoter and the Allottee. It is pertinent to note that it is the duty of the Promoter to provide justification of any and every demand that he raises under any head that may have been agreed on. For Example, In Faridabad, sec-75 to 89, the colonizer had in his agreement very clearly defined the EDC and Basic Selling Price of the Apartment that the Intending Allottee was to pay as total consideration, thereafter HUDA through Notification Enhanced the EDC rates from Retrospect in 2011. The colonizer/s inturn started demanding enhanced EDC without any justification of the calculation for that increased/enhanced cost. Therefore the Regulator should ensure that the Promoter can only demand any future costs like Govt taxes, levies etc after providing complete transparent records of the DTCP/HUDA where the demand is narrowed down to each square meter. If the promoter does not share the calculations of the cost he is imposing on the allottee than the Allottee should not be under any obligation to pay such cost and the promoter should be penalized by the regulator to pay it out of his pocket. Further, due to delay in construction from the time specified in the agreement and cost that comes after the date of possession of the apartment/plot and the other common areas and facilities, it should be made compulsory through this Act that the Promoter will be the only one liable to pay such costs that have resulted due to his failure of providing Possession.
10) Under the Draft Chapter VI (Dealing with Offences and Penalties) There is no provision for Penalty in any manner, either through fine or imprisonment for violation and contravention of SECTION 10 Of the ACT. It is of paramount importance that if the promoter (as under sec-10 of the Act) does not honor his duties and obligations then he should be penalized most severely.
I hope these suggestions would be taken favorably so that the Real Estate Regulation Bill becomes an effective mechanism to control and regulate the foremost sector that needs transparent and equitable processes to grow in proportion of the growth of our population.
Thanking You,

Yours Sincerely

Name
Address
Contact number

[s1joshi]

Here is a copy of suggestions we received from GREENOPOLIS association in Gurgaon (Curtsey Krishna & BlessU). Thank you for sharing a copy of suggestions with working committee

Request all other members to go through draft on regulatory authority and share feedback to DTCP, Please share a copy (if possible) for wider discussion and awareness on loopholes in current draft. Remember a week Regulatory body is going to be useless, and we have to ensure it is fullproof.

To Date:

Financial Commissioner TCP/ Director General TCP
Directorate of Town & Country Planning Haryana H.Q.,
Sec.18, Chandigarh, Haryana

SUBJECT: SUGGESTIONS TO DRAFT “THE HARYANA REAL ESTATE (REGULATION AND DEVELOPMENT) BILL, 2013”

Dear Sir/Madam,
We have reviewed the draft Haryana Real Estate Regulation & Development Bill 2013 available on your website. Upon our review, we have noticed that several crucial and important aspects were found to be either missing completely or has been inadequately addressed in the draft.
Please find below some of the points which must be included and/or addressed adequately in the bill to ensure that the real estate in Haryana is properly regulated.
Following are some of the points which are not addressed and request for your kind consideration and inclusion to the draft bill.

1. All terms, specifications, of areas, common utilities and facilities which are already incorporated and included in various acts of state, be clearly defined leaving no space for ambiguity OR the buyers interpretation be considered final.

2. List all offences where no COMPOUNDING should be available to the builder at any point of time in future once license has been granted.

3. Government to ensure that compensation to buyers in terms with interest being charged be mentioned as a licensing conditions in case of delays and no condition contrary to this be included by the builder, while signing a bilateral agreement with the buyer.

4. All terms used to ask money, which the builder can use while securing a BBA (Builder Buyer Agreement) with the buyer be standard and as defined under various acts in letter and spirit. No new and fancy terminology be incorporated in BBA, pertaining to recovery of excess amounts from buyers by the builder.

5. No escalation clauses or additional costs be allowed eg increase in super areas, podium charges, terrace charges etc. Definitely beyond contracted period of delivery if indexed to Government data. These terms like super area be clearly abolished.

6. Basic Selling Price to include all price/costs chargable towards the complete habitable development with minimum facilities of electricity, water, sewerage, connectivity, common facilities, gas, communication facilities, internet, iptv and no charge be allowed to be taken separately.

7. In the modern days and times, internet, iptv, piped gas, communication facilities be made mandatory and standard, wherever available or as and when available.

8. EDC not be allowed to be charged retrospectively as the Government itself has no control over delays by the builder or by its own self in matters of external development of infra. While the buyer has no control over either the builder or the Government agencies responsible for delivering.

9. The total all inclusive cost including BSP, PLC, EDC/IDC/EEDC/taxes and any and every charge be vetted by the DTCP and clearly mentioned in the BBA.

10. Clear policy pertaining to change in Building plans and maximum flexibility. Personal responsibility of Government official in enforcement towards sticking to the approved design and quality of the buildings. Any change be approved by each and every stake holder in writing and not merely published in newspaper. All changes be sent to buyer for approval, clearly mentioning the advantages and disadvantages to the consumer duly vetted by the town planning department.

11. Licensing conditions to enumerate standard costs towards any additional specification or luxury facilities as a fixed percentage of total cost or a Government declared price for providing such optional facilities. Standard and mandatory facilities to be defined along with cost in the license as well.

12. Regulation of intermediaries including contractors, brokers, underwriters, registration department and clearcut responsibilities and accountabilities be fixed preventing harassment and fleecing of customers,

13. Post-delivery performance guarantee towards major defects and general finishing specifications be drafted and a report sought from reputed state and center level reputed architect firms to ensure structure conformity to standards set and performance.

14. Maintenance be offered only by companies with proven track record and at Government regulated price and with clear definition of services to be provided in terms of security, upkeep of common facilities and services; cleanliness, plumbing, sanitation, lighting, etc provided to habitants. Any increase in prices be indexed to Government data.

15. In case of liquidation and siphoning of funds by builders, as in the case of Triveni, 89 Faridabad, who will be responsible towards the home seekers? Strict Penalty and imprisonment be made part of act, along with disabling the directors from venture into any business involving public money.

16. Why home seekers who are staking their own personal equity and taking loans on the basis of their own credibility be considered as Unsecured Creditors, while banks/Government departments who do not assess or fail to track the financial records, transactions and credibility are considered secured creditors?? All home seekers must be represented as secured creditors above Government Agencies and Business Creditors.

17. The overall responsibility of non-completion of project be that of the firm and in case of liquidation that of the Government. Government to complete as per specifications intended, at its own cost in case of any deficiency beyond what the buyer was supposed to pay

18. Government to declare a rating system for each builder based on its financial, engineering and execution capabilities and past track record and a list of total as well as unresolved complaints from current and previous projects,

19. Government to include in draft declaration And Letter of Intent And Builder Buyer Agreement And any advertisement by the builder a list of external infra projects in terms of connectivity, utilities and support services under the responsibility of the Government, that are proposed or are under consideration or are already surveyed or are approved and the expected time required to make the area habitable. This should include how these external infra to be provided by the Government affects the habitation of the licensed colony.

20. CCI observations and orders in the DLF case be applicable to all builders in state. All builders with similar complaints be sent a cease and desist order by the state Government, principal secy.

21. Transfer of units prior to registration be governed by the state in terms of amount to be charged and the cost be regulated. Transfer charges/expenses beyond 5 years of grant of license be borne by the builder as a result of delay. Today builder create artificial barrier for people wanting to exit by stopping/increasing the transfer charges or by charging very high transfer fees. Since such charges are regulated in any financial transaction in the country, such fees should be governed by the to check exploitation and generation of UNEARNED INCOME by the builders.

22. No money be allowed to be collected until all approvals from state and central Government agencies are in place, including statutory and specific project related approvals. Single window be created for all approvals to prevent huge delays and frustration of approved projects

23. FAR once fixed for a license cannot be changed by the Government. to the detriment of quality of habitation.

We request your good office to consider all the above inputs in redrafting the current draft Haryana Real Estate Regulation and Development bill to make it more holistic in all aspects.
Thanks & Regards


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