News

Confusion over compounding fee in RERA rules

PUNE: There seems to be confusion over the compounding fee under Real Estate Regulatory Authority(RERA) rules, notified by the state government, which has come into effect from May 1.

A recent report on Real Estate Regulatory Authority (RERA) Act implementation in states has stated that while the state has largely kept the rules “in line” with the Union government act, there is some dilution on the “penalty” for builders for non-compliance and on payment schedules.

RERA has the power to impose a fine of 5-10% of the entire project cost if the developer fails to comply with certain conditions which, according to a Crisil report, appears to be a “dilution” of rules.

Consumers have been pointing out that the penalty aspect would be clear once the three-month window period for registration is over. “There is certain vagueness regarding the penalty aspect which can range between 5-10% of the entire project. It would be at the discretion of the regulatory authority and that is definitely not clear,” stated Vijay Sagar of Pune Grahak Panchayat. He cited that there were many consumers who were trying to register their complaints but had to wait till the developers register so that action could be initiated against them for any delay or violation.

The Crisil report largely gives comparison of nine states and the status of dilution in the laws pertaining to rules of ongoing projects, penalties for non-compliance, payment schedule, norms for escrow withdrawal and clause for structural defects. As of now, only 13 states and Union territories have notified the new rules, with Maharashtra launching a website with helpline number.

Read More

Leave a Comment