Menu

WELCOME TO FUNDSCOOP ADVISORS

9330560978, info@fundscoop.in

Comparison between Real Estate (Regulation and Development) Act, 2016 RERA) and West Bengal Housing Industry Regulation Act, 2017 (WB HIRA)

 

Abstract: Earlier there was no law specifically guiding the Real Estate Industry in India, which resulted to some discrepancies in respect to both the consumer body and the Industry body.

Thereafter, RERA, 2016 was enacted nationwide.

The essential goal of RERA is making a straightforward framework between the homebuyers and the builder body.

West Bengal on the other hand enacted their own state law, called West Bengal HIRA, 2017.

OBJECTIVE OF STUDY

  1. Introduction to both Acts.

  2. Comparison of both the Acts.

  3. Constitutional Validity of West Bengal Housing Industry Regulation Act WB HIRA.

INTRODUCTION TO REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016

RERA

The Real Estate (Regulation and Development) Act, 2016 provides for establishing regulatory authorities at the state level to register residential projects and seek to regulate contracts between buyers and sellers in real estate sector to ensure sale of Plots,Appartments or Buildings etc in an efficient and transparent manner. It also proposes to ensure greater accountability towards consumers, and significantly reduce frauds and delays as well as the current high transaction costs.

It seeks to establish symmetry of informations between consumers and promoters, transparency of contractual conditions, set minimum standards of accountability and a fast track resolution mechanism. It extends to the whole of India except the State of Jammu and Kashmir.

OBJECTS AND REASONS FOR WHICH THE RERA ACT HAS BEEN FRAMED

  1. Ensure accountability towards Consumers and protect their interest.

  2. Infuse transparency, ensure fair play and reduce frauds and delays.

  3. Introduce professionalism and pan India standardization.

  4. Establish symmetry of information between promoters and consumers.

  5. Imposing certain responsibilities on both promoters and consumers.

  6. Establish regulatory oversight mechanism to enforce contracts.

  7. Establish fast-track dispute resolution mechanism.

  8. Promote good governance in the sector which in turn would create investor confidence.

SALIENT FEATURES OF THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016

  1. Establish the real estate regulatory authority for regulation and promotion of the real estate sector.

  2. Ensure sale of plot, appartment of building, as the case may be, or sale of real estate project in an efficient and transparent manner.

  3. Ensures interest of consumers are protected.

  4. Establish an adjudicating mechanism for speedy redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority (RERA).

  5. Regulates transactions between buyers and promoters of residential real estate projects.

  6. Establishes state level regulatory authorities called Real Estate Regulatory Authorities (RERA)

  7. Residential real estate projects, with some exceptions, need to be registered with RERA.

  8. Promoters cannot book or offer these projects for sale without registering them. Real estate agents dealing in these projects also needs to register with RERA.

  9. After registration, the promoter must upload details of the project on the website of RERA. These include the site and lay out plan, and schedule for completion of the real estate project.

  10. Amount collected from buyers for a project must be maintained in a separate bank account and must only be used for construction of that project. The State Government can alter this amount.

  11. Right to Legal Representation on behalf of clients by Chartered Accountants, Cost Accountants, Company Secretaries or Legal Practitioners.

  12. Imposes stringent penalty on promoter, real estate agent and also prescribes imprisonment.

PROJECTS EXEMPT FROM THE AMBIT OF RERA ACT, 2016

The following projects do not require to be registered under the act:

 

  1. Where the area of land does not exceed 500 square meters

  2. Where the number of appartments does not exceed 8 (Eight)

  3. In case of Renovation/Repair/Re-developments

  • Where the area of land proposed to be developed does not exceed 500 sqr.mtrs or the number of apartments proposed to be developed does not exceed eight, inclusive of all phases;

  • Where the promoter has received completion certificate(cc) for a real estate project prior to commencement of this act; 

  • for the purpose of renovation or repair or redevelopment which does not involve marketing, advertising, selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project.

 

INTRODUCTION TO WEST BENGAL HOUSING INDUSTRY REGULATION ACT, 2017

Many states in India accepted RERA quickly as soon as it was approved. Initially, West Bengal missed the deadline to implement RERA in the state. The West Bengal Government did not agree to certain terms that were defined in RERA. Thereafter, the West Bengal Government enacted their own state law ''West Bengal Housing Industry Regulation Act, 2017 (WB HIRA)''. It extends to the whole of West Bengal.

 

ADVANTAGES OF WEST BENGAL HIRA

  1. Fine/Penalty can be imposed to the Promoters and Promoters can be prosecuted for any non compliance.

  2. Promoters will not be allowed to advertise,market,book,sell or offer for sell or invite persons to purchase any plot, apartment, building in any real estate project or part of it without registering the project/s with the regulatory authority.

  3. Ease for Consumers

  4. Transparency

  5. Reduction in litigation

 

PROJECTS EXEMPTS FROM REGISTRATION UNDER WB HIRA, 2017

No registration of real estate projects are required -:

  1. Where the area of land proposed to be developed does not exceed 500 square meters or the number of appartments proposed to be developed does not exceed eight inclusive of all phases;

    Provided that, if the State Government considers it necessary, it may reduce the threshold below five hundred square meters or eight appartments, as the case may be, inclusive of all phases, for exemption from registraton under this act;

  2. Where the promoter has received Completion Certificate (CC) for a real estate project prior to commencement of this act;

  3. For the purpose of renovation or repair or re-development which does not involve marketing, advertising, selling or new allotment of any appartment, plot or building, as the case may be, under real estate project.

Explanation: For the purpose of this section, where the real estate project is to be developed in phases, every such shall be considered a stand alone real estate project, and the promoter shall obtain registration under this Act for each phase separately.

 

COMPARATIVE ANALYSIS BETWEEN RERA AND WB HIRA

 

POINT OF DIFFERENCE

RERA

WB HIRA

Grant Of Registration

The grant of Registration time is 30 days.

The grant of Registration time is 30 days.

Extension of Registration time

Time period shall not extend more than one year.

Time period of extension shall not exceed a period of one year.

Force Majeure Clause

Under RERA, developers can invoke the clause only in case of war, drought, flood, earthquake, fire or any other calamity caused by nature, affecting the regular development of real estate projects.

Under WB HIRA, over and above the conditions listed by RERA, force majeure can be declared for '' any other circumstances as may be prescribed ''.

Definition Of Garage

Garage has been defined to mean '' a place within a project having a roof walls on three sides for parking any vehicle, but does not include an unenclosed or uncovered parking space such as open parking areas ''

WB HIRA defines Garage as '' Garage and

parking space, as sanctioned by the competent authority ''

Unforeseen circumstances that prevent a builder from fulfilling his contract.

RERA says the circumstances could be war, flood, drought, fire , cyclone, earthquake or any other calamity caused by nature.

WB HIRA makes an addition to the clause ''…. or any other circumstances as may be prescribed ''

Compounding Of Offences.

Notwithstanding anything contained in the Code Of Criminal Procedure, 1973, if any person is punished with imprisonment under this act, the punishment may, either before or after the institution of the prosecution, be compounded by the court on such terms and conditions and on payment of such sums as may be prescribed: Provided that the sum prescribed shall not, in any case, exceed the maximum amount of the fine which may be imposed for the offence so compounded.

There is no such provision as compounding of offences.

Salary and allowances of Chairperson and Members

The salary and other allowances shall be such as may be prescribed.

The salary and other allowances shall be such as may be prescribed.

Definition Of ''Car Parking Area''

There is no definition of Car Parking.

Car Parking area has been defined to mean '' Such area as may be prescribed ''

Construction Materials

Authority may make recommendations to Appropriate Government for use of appropriate construction materials.

Authority may make recommendations to the State Government for use of State Construction materials.

 

CONSTITUTIONAL VALIDITY OF WEST BENGAL HOUSING INDUSTRY REGULATION ACT, 2017

It is article 254 of the constitution of India that immovably settles in the doctrine of repugnancy in India. As indicated by Black's law dictionary, Repugnancy could be characterized as '' an irregularity or logical inconsistency between at least two sections of a legitimate instrument, (for example, a statue or an agreement)''

Article 245 states that parliament may make laws for entire or any part of India, and the legislature of a State may make laws for the entire or any part of the State. It additionally expresses that no law made by parliament will be regarded to be invalid on the ground that it would have additional regional activity.

Article 246 additionally discusses Legislative intensity of the Parliament and the legislature of the state. It expresses that :

  1. The Parliament has selective capacity to make laws for such state as for any of the issues as per List II or the State List in the seventh schedule.

  2. The Legislature of any state has selective capacity to make laws regarding any of the issues identified in the list III or concurrent list in the seventh schedule.

  3. The Parliament and the Legislature of any state have capacity to make any laws regarding any of the issues identified in the List III or concurrent list in the seventh schedule.

  4. Parliament has the capacity to make laws regarding any issue for any part of the domain of India excluded excluded in a state despite that such issue is an issue specified in the State List.

 

Go Back

Comment