Recently, the Uttar Pradesh government notified the draft Real Estate (Regulation and Development) Act (RERA) rules. Here is a holistic comparison of the Uttar Pradesh draft rules and the Act legislated by the central government, in 2016.
|Main clauses||Real Estate Regulation and Development Act (RERA) 2016||Uttar Pradesh RERA|
|Minimum project size||Compulsory registration for projects admeasuring plot area more than 500 sq metres or 8 number of apartments.||Compulsory registration but no specifications on the minimum project size.|
|Escrow account||70% of the amounts realised for the project to be deposited in a separate account in a scheduled bank to meet the cost of the real estate project and to be withdrawn in proportion to the percentage of completion.|
|Online project details||All project details such as sanctioned plan, layout plan, floor space index, specifications of the project, authenticated copy of approvals and commencement certificate, should be available online.|
|Lapse/Cancellation of registration||Remaining development work to be done by a competent authority or the association of allottees and the appropriate government may be consulted.||Ambiguity on the process to be adopted for remaining development work, in the event of lapse or cancellation of the project.|
|Definition of ongoing projects||For ongoing projects for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project, within a period of three months from the date of commencement of this Act.||Ongoing project, means a project where the completion certificate has not been issued but excludes projects where:
|Sale of the apartment||On the basis of carpet area only.||For existing projects, the promoter should disclose the size of the apartment based on carpet area, even if earlier sold on super built-up area or built-up area.|
|Parking||Parking spaces defined but no specifications regarding parking costs.|
|Structural fault||Developer to rectify any structural faults free of cost, in case it is reported within five years of the date of possession.||No clause regarding structural faults.|
|Penalty for non- compliance||Promoter: Up to three years of imprisonment or fine up to 10% of the total project cost.
Real estate agent: Up to one year of imprisonment or fine up to 10% of the total project cost.
|Several imprisonment clauses have been made into compounding clauses (where monetary compensation is paid, in lieu of actual punishment)|
Although, the UP RERA rules have the essence of the Real Estate Regulation and Development Act 2016, several clauses in the state regulation lack transparency. Hence, in our opinion, the UP RERA should add specific clauses on issues such as promoter’s liability on structural faults, title issues and strict measures like imprisonment on non-compliance.