Patna, April 27: The Bihar government today stepped in to protect the interests of consumers and bring transparency in the burgeoning and unwieldy realty sector by approving the Bihar Real Estate (Regulation and Development) Rules, 2017.
Approval to these people-friendly rules came at a cabinet meeting chaired by chief minister Nitish Kumar at the state secretariat. They are expected to curb rampant instances of cheating of customers by builders and developers.
Principal secretary, urban development and housing, Chaitanya Prasad said the new rules have been framed in the light of the Real Estate (Regulation and Development) Act, 2016, notified by the central government on March 25 last year to protect consumer interests, bring transparency in transactions and ensure timely execution of projects.
The rules mandate that builders and developers across the state will be able to sell condominiums and commercial property only on the basis of carpet area.
Carpet area has been defined as the entire area of a flat within the outside walls which is actually used by a consumer. It will include walls inside a flat, but will exclude balcony, verandah and service shaft.
"The rules will come into effect as soon as they are notified by our department. This shall be definitely done before April 30. They will be applicable not only for new residential and commercial projects, but also for such on-going ones for which completion certificate has not been taken from the government," Prasad told The Telegraph.
Provisions for penalty on developers for delay in project by way of interest on consumers' money have been included. Developers cannot change any apartment plan without the written permission of a consumer.
Following the provisions of the central Act, Bihar will constitute a Real Estate Regulatory Authority (RERA), where any consumer can register his complaint against any builder. A person can demand correction of any defect in his or her flat within one year of taking possession.
Every developer will have to register all such projects with RERA that involve more than 500 square metres of land or have eight or more flats. He will be able to advertise, market and sell it only after registration.
"A developer will have to provide full details of the project like its layout, location of plot, clearances obtained and documents pertaining to ownership while registering any project with RERA. Details of promoters, real estate agents, contractors, architects, engineers, developers, as well as their track records, allotment letters, agreement for sale, sale deed among other things related to all projects will have to be submitted and they will be made public on the Authority's website," Prasad added.
The cabinet has decided to designate the urban development and housing department principal secretary as the Regulatory Authority till a full-time RERA is established.
It has also given its nod to a proposal to designate a land tribunal in the state as the appellate body till a Real Estate Appellate Tribunal (REAT) is constituted.
A selection committee having the Patna High Court chief justice or his representative, urban development and housing department principal secretary and the law secretary will recommend appointments of the RERA chairman and members, as well as judicial members and other members of the tribunal.
Builders and developers welcomed the move.
"The realty sector in Bihar has grown phenomenally in the last 10-12 years and many unwanted people have entered it as builders or developers. Consumers have been cheated and genuine developers have suffered," said Manikant, former vice-president of Builders Association of India and owner of Surya Nest Build real estate company in Patna.
