Real Estate: The New Maharashtra Housing Act - A step forward
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.
- 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.
Click here to read the full reportWorld News
Other Articles
- Mumbai Real Estate: A healthy quarter for registrations
- Real Estate: Impact is still small to generate new buying interest
- Construction: Stocks almost flat QoQ due to nil improvement in ground execution
- Mumbai real estate: Holding strong
- Realty Bites
Featured Author
 |
Motilal Oswal |
- Macroeconomic indicators & Stock markets
- Midcap/Smallcap Indices - Time to catch up and stop under performing?
- MF Scheme Analysis: Franklin India Bluechip Fund (G)
- Note on RBI's Monetary Policy Announcement for 2013-14
- South Indian Bank Q3FY13: Results in line with expectations, retain accumulate More
Also On Valuenotes.Com
Personal Finance
The Art and Science of Buying Life InsuranceInvest early in your careerKnow your PAN card betterStock Recommendation
Rallis India: Industry environment gradually improvingJ&K Bank Q4FY13: Risk Reward favourable, Maintain BUYTech Mahindra Q4FY13: Beaten expectation, but challenges aheadMarket Outlook
Week ahead: Nifty surging higher, the bulls remain in controlDow Theory: A tool for technical analystsEquity markets witnessed a choppy session of trade
Reader's Comments
Discussion
08th May 2013 | 07:25 pm
Sectoral Analysis : BUY MCX CRUDE OIL (MAY) TARGET ACHIEVED
06th May 2013 | 03:57 pm
Sectoral Analysis : BUY MCX CRUDE OIL (MAY) TARGET ACHIEVED