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Monday, July 16, 2012

Maharashtra Housing (Regulation and Development) Bill 2012 - "It's a Trap!"

3 Years' Jail for the Builder!

In the last budget session, Maharashtra Government introduced the Maharashtra Housing (Regulation and Development) Bill 2012. In a great hurry. Without inviting comments from the citizens. Activists called it pro-builder Bill.

So, a 19-member joint select committee of the Maharashtra state legislature was formed to give "property buyer friendly paint" to the Bill. This joint committee has recommended a few "attractive" amendments to the Maharashtra Housing (Regulation and Development) Bill 2012. Like 3 years imprisonment for the builder for not obeying the Housing Appellate Tribunal!

Sachin Ahir, minister of state for housing, is going to reintroduce "The Bill", along with the recommendations, in the legislative assembly today. "The Bill" will replace the Maharashtra Ownership of Flat Act (MOFA) that has been in force since 1962.

Gang of 3!

If you look at the recommendations, you will realize that The Bill is nothing but the government's way of decorating the trap set by the builders to catch the naive property buyers. An effort to make the scared property buyers "feel safe" to give away hard earned money - for free - to finance the builder's business.

The Maharashtra Housing (Regulation and Development) Bill 2012 is nothing but Maharashtra Government's contribution towards promoting the idea of 'booking a flat' and helping the builders to take prisoners. Assisting housing finance companies to convert the property buyers into slaves for life. To trap the vulnerable property buyers who are threatened by the irrational property price rise and are desperate to own a home at any cost.

All these efforts, to establish a 'Housing Regulatory Authority' and a 'Housing Appellate Tribunal', 'Maharashtra Housing (Regulation and Development) Bill 2012', are nothing but Maharashtra Government's way to pay back to it's partners - builders & banks - for the revenue it earns from the stamp duty, registrations charges & VAT from the property buyers.

The government always plays the role of 'a good cop' when it deals with it's citizens. So, now, there would be a Housing Appellate Tribunal. In case of a dispute with the builder, a flat owner can go to the tribunal. If the builder disobeys the tribunal, he can face 3 years imprisonment.

This provision of 3 years imprisonment existed in the old Maharashtra Ownership Flats Act (MOFA, 1963) too! But do you know of any builder who was imprisoned? No! Because regulating the real estate industry is just a farce. Main motto of the government is to promote the idea of booking and to assure uninterrupted supply of interest free funds from the property buyers to the builders.

Risks Involved in Booking a Flat:

So, for me Maharashtra Housing (Regulation and Development) Bill 2012 is nothing more than the a warning to all those who are not aware about the risks involved in booking a flat. To get the idea, please, have a look at the recommendations:

1) The builder cannot make any alteration to a flat once it is sold - without the flat purchaser's consent.

2) The builder cannot add a floor or a wing to a building - without the flat purchaser's consent.

3) Any amenity promised - such as a garden - cannot be altered.

4) If the builder fails to give possession of a flat within the promised period or abandons a project, he will not only have to refund the amount with 15% interest, but also have to pay a penalty.

5) If the housing regulator is satisfied that the builder is unable to complete a project, the regulator can let the property buyers come together and appoint contractors and consultants to complete construction of the project.

6) A flat purchaser can demand rectification of any defect within five years of the purchase.

7) Preserving open space is mandatory, it cannot be used as a parking lot.

8) Fire safety systems in high rise buildings are mandatory too.

9) The builder can not make changes to recreation facilities without the consent of the property buyers.

10) If the purchaser fails to pay any outgoings for over three months, the builder can cut off essential services - like water, power and gas - only after the matter is heard by a competent authority.

11) The builder cannot sell 10 per cent flats in each building. These flats will be retained by housing regulatory body till the completion & occupation certificate is obtained by the builder. The list of these 10 per cent flats will be displayed on the government website so that no property buyer will buy them.

12) No pre-launch bookings! As per The Bill, the builder can not sell the flats , accept the bookings, before the plans are approved by the authority.

Now, the builder has to submit the plans, get sanctions & commencement certificates, display the plan on government's website and then only can accept bookings.

Moral of the story:

So on & so forth. In short, it's not about a Maharashtra Housing (Regulation and Development) Bill 2012 or about a good builder and a bad builder. It's all about the way you buy the property. When you book a flat, you buy a concept on paper. While implementing that concept, anything can happen. Sometimes, may be because of genuine, valid reasons. But, for sure, mostly, at your cost. However, your builder would not be sent to jail even for a day. But, you suffer for life. Am I right, Mr. Sachin Singh, the first citizen of Nanded City Pune?

So, point is, don't get trapped! Let the builder build, obtain the completion & occupation certificate, and send a limozin for you!!

Latest Updates:

1) TUESDAY, JULY 17, 2012

Maharashtra Housing (Regulation and Development) Bill 2012 - "The Trap is Set!"

Related Stories:

1) MONDAY, JUNE 25, 2012

Invite me for a cup of tea!

2) Errant builders could face 3 years jail in flat dispute

3) ‘Housing Act will lead to endless court battles

4) Maharashtra Bill to set up real estate watchdog

5) Maharashtra Housing Regulation and Development Bill - Will it help?

6) Proposed Maharashtra Housing Bill has many loopholes: Experts

7) Amended hsg bill empowers buyers

8) Public meeting to discuss & deliberate on the proposed Maharashtra Housing ( Regulation and Development) Act, 2012

9) Maharashtra Bill Proposes Criminal Proceedings On Erring Developers

10) 'Housing regulatory law to benefit builders, buyers'

11) While Mumbai realtors complain, new launches propel sales

12) Housing bill focuses on safety issue


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  1. Dear Sir,

    Fantastic blog, I learnt a lot from your blog.

    thanks for making us aware (or more literate) day by day about property issues.

    I have following query,

    This is about Maharashtra Housing, Is there such bill or Law for other builders ? on that basis we can challenge builder about non conformity found in agreed amenities or such major things at the time of booking.

    Thank you sir,


    Ashish Rothe

  2. Does it include sales deed, conveyance deed, society making compulsory for builder? Jail for builder if he don't do that? Or anything that without builder need buyers can make it without any problems? Also jail if builder don't pay money to society which he takes for society formation? Anything on what builder should charge buyers for and any stander amount in case of electricity connection, registration charges?
    For builder I think there must be case against 420 law if they don't keep the word.

  3. You are right Mr Ravi...but we should try to make things better.

    1. We means the property buyers. Right? Otherwise, the gang of 3 - government, builders & banks - is ready to victimize us - the property buyers.

    2. RK

      Yes! what you say is, undeniably,THE WHOLE truth, nothing but the truth.

      To my mind, of course, "Purchaser(S) Beware", is undoubtedly the only sane slogan of caution which could be aired /displayed for the benefit of the community of the "victims of the villainy". More so,holds good with a greater force to the bunch of would-be- buyers who choose and decide to have a 'unit' of a building for life-long abode. But the naked but insurmountable problem (or problems galore), eluding a solution for ever, even an intelligent buyer in its profound sense is more often than not obliged to face, are for reasons beyond his control. That has primarily something to do with the so called individual's "mindset".

      For an appreciation of the point(s)of view in my mind,nagging for quite long, among the several others,one of the posts in public domain (to be reproduced, as soon located for a ready reading), will hopefully be of help.

      In an earnest anticipation of your giving some serious thoughts thereto, in the larger, but very much impaired and damaged interests of the public.

    3. contd.
      A ) The characteristics of the property rights / interests attached by the law to an Apartment are, under the scheme of the special enactment, peculiar and entirely different, in comparison with those of any independent and all exclusive house property. In view thereof, it is absolutely necessary, rather obligatory on the part of every Purchaser, not only from his own individual standpoint, but also from that of the other co-purchasers / co -owners, – to take utmost care / and caution, and exercise due diligence; also be guided by proper legal advice, if that be called for / or to the extent that is considered prudent and necessary, – in the matter of purchase of an Apartment; essentially, before going through the most crucial process of having the execution and registration of the Deed of Conveyance done / completed.
      The under mentioned aspects and their implications require to be specially noted and duly taken care by everyone of the co-purchasers, who eventually are going to become co-owners as envisaged by the law:
      (1) In the nature of things, the execution and registration of the Deed of Conveyance might not take place in the case of all the co-purchasers at one time, but would be gone through at different successive points in time.
      (2) One cannot expect an ideally proper or fullest co-ordination and co-operation among the co-purchasers, that too among all of them, with no exception or exclusion whatsoever. In particular, in the initial stages – that is, until after all of them are perforce obliged to congregate and act united in respect of all such matters which entail the common rights and interests of all the co-purchasers / co-owners.
      (3) Should any one or more of the requirements / formalities under the law not be taken care by any such co-purchaser in whose case the execution and registration of the Deed of Conveyance happens to take place first, for any reason whatsoever, – that is, anything done or omitted to be done knowingly or otherwise, by that co-purchaser, then – that is bound to have unpleasant / unlawful consequences to, or adversely impact the lawful rights and interests of the other co-purchasers, not only individually – that is, of each one of them, but also collectively – that is, of them all.
      Nonetheless, as per the law, its mandates regarding matters requiring strict compliance by the Seller are unmistakably loud and unambiguously clear. The reason / rationale behind is this: It is he, who constructs and sells the Apartments to different persons, – who, to begin with, are mutually strangers. He makes the sales under separate and independent transactions, as concluded by him with each one of them, and at different points of time. Hence, the responsibility to take care of all the legal requirements / formalities entirely rests with him, until such time the purchasers join in the formation and registration of the legal entity namely,– THE OWNERS’ ASSOCIATION, and become its ‘members’; thereby, to effectively become ‘co-owners’ within its special meaning under, and as envisaged by, the law.
      B ) The basic points specially focused on above, wpr to "apartments", needs to be noted, are, by and large, of equal relevance to "flats", being simply the other type of 'units' known to law.
      The crux of the surrounding imponderable is this: - without complete co-operation and co-ordination, and pro-active interaction amongst the prospective buyers (may be, through a common website set up for the purposes), that too right from the day one of any project newly floated, the hardships faced in reality cannot be wished away.
      What , perhaps, is ideally called for would be suitable and well thought out regulatory provisions, so as to take full care of the 'human' angles / shortcomings attempted to be highlighted as above, in a foolproof manner.

  4. Will it applied to to 2009 Booking? As I have booked my flat in Sept 2009 but still waiting for possation? At looking at the speed of the construction site, will not get in Next 6 months too... :(

    1. I don't think so, Sagar!

      Please, take possession of your flat only after the project receives the completion / occupation certificate from the PMC / PCMC / Town Planning. Be ready to wait for 6 - 7 - 8 more months.

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