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Real Estate: The New Maharashtra Housing Act - A step forward

Prabhudas Lilladher | Published: 24 Jul, 2012  | Source : ValueNotes.com | Follow Author | Add to my Favourites


Highlights:

- Status of the Bill: In a step which could bring in a fair amount of transparency into the Real estate sector, the Maharashtra Housing (Regulation and Development) Bill, 2012, has been cleared by both the houses of the Maharashtra State Legislative Council and awaits Presidential assent. The Act shall repeal the Maharashtra Ownership Flats Act, 1963, which has been the primary Act till recently to provide relief to the flat purchasers against sundry abuses, malpractices and difficulties related to the construction, sale, management and transfer of flats. This Act was also adopted by majority of the other states with certain modifications. However, with the passage of time, the Act has been rendered ineffective in protecting the interest of flat purchasers and hence, the need for a new Act.

- Removal of information asymmetry: The Act is attempted to ensure full disclosure of information by the promoters/developers regarding the project and compliance of agreed terms & conditions.

- Establishing a Regulatory Authority and an appeal mechanism: The Act calls for establishing the Housing Regulatory Authority to undertake advisory, judicial and administrative functions in order to ensure effective implementation of the Act. Further, the appeal mechanism involves setting up of a Housing Appellate Tribunal for appeals against the direction of the HRA, post which, an appeal can be filed to the High Court followed by the Supreme Court.

- View: The act addresses the key issue of lack of information plaguing the sector. However, the non-inclusion of the escrow account mechanism in the  final act, gives certain leeway to the developers. The initial leg of implementation of the act could lead to severe delays in launching projects which could lead to supply constraints. However, this would stabilize over a period of time and lead to an increase in credibility assigned to the sector.

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About Prabhudas Lilladher

Prabhudas Lilladher has a nationwide distribution network, consisting of branches, franchisees and associates, providing a comprehensive gamut of financial services in the Institutional and Retail domain. Their services includes Equity, derivatives; margin funding, mutual funds, PMS, IPOs and online trading.

 

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.



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