Friday, May 6, 2016

No law in force to regulate and control real estate business in Maharashtra

Since central government has notified some provisions of Real Estate (Regulation and Development) Act, 2016 (REA) and repealed Maharashtra Real Estate (regulation and development) Act 2012  (MREA). Some people unnecessary creating confusion that though MREA as been repealed Maharashtra Ownership of Flats act (MOFA ) is still in force. But that is not true. And as MOFA stands repealed by Government of Maharashtra , centre has repealed MREA 2012 and as all the provisions REA 2016 have not been notified , time being there is no law to regulate and control real estate business is in force.

Photo courtsey hindustantimes.com

Even if for arguments sake we accept that Maharashtra government had not repealed MOFA. As per article 254 of the constitution of India, the parliament has all the powers to enact any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.Hence centre repealed MREA 2012. In case MOFA had been in force centre would have repealed it also.

Photo courtsey www.realtorindian.com

Centre didnt repeal MOFA because it was repealed with introduction MREA 2012 it self . In fact MREA 2012 was basically brought in to force because MOFA had failed  to give any relief to flat purchasers against sundry abuses, malpractices and difficulties related to the construction, sale, management and transfer of flats.

Central Government notification

Another argument to believe that MOFA was repealed was the Section 1 (3) of MREA 2012 and REA 2016 are the same. It says that the act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision. Maharashtra government had notified this section while central government has not notified it. That means with this notification itself all the provisions of MREA 2012 including repeal of MOFA had come into force. 

State Government notification

Now it seems that since at present there is no act to regulate and control real estate business in force,the  Government of Maharashtra is planing to designate somebody as RERA. However as The sections of REA2016 that the Centre has notified are related to establishment , incorporation , Composition of  The Real Estate Regulatory  Authority (RERA) , Term of office ,  Salary and allowances payable to Chairperson and Members only .And as it has not notified section related  Obligations, Functions and duties of promoters , Rights and duties of flat purchasers, Penalties for contravention of any section. Even if Government of Maharashtra  designate somebody as RERA it will not be of any use in absence of any regulatory or penalty powers .

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