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Real estate Act provides no cover for home buyer's investments in stuck projects

The Real Estate Regulation Act (RERA) will provide no relief to those who have purchased houses in projects that are stuck due to legal issues or because the builder/developer has already used-up the money, feel experts.

"People won’t get any immediate relief due to these issues,". "They can make more informed choices over the long term because of the promoter's dsiclosure," .

Though the law warrants registration of all ongoing projects with the state real estate regulatory authority before the deadline, it gives the promoters the option to change the completion date of ongoing projects while registering. "While registering a project, the promoter needs to give the 'revised date' of completion, which should commensurate with the development completed," states the newly established Maharashtra state regulator's website.

This is almost akin to giving a fresh extension to the ongoing projects that are delayed or are on the verge of being delayed.

There is no specific clause to deal with projects that are stuck because of earlier delays by the developer. If the developer has used funds garnered through complete or partial sales of units in a project and has still not completed it, he can seek a fresh date while registering.

According to Rohit Gera, vice-president, Credai, Pune metro, this will continue to be "an area of concern in the foreseeable future" and "might have to be dealt with separately".

Projects stuck due to legal issues will also not find any relief under RERA. Promoters will have to make disclosures on their past projects, delays and status in accordance with the Act.

So, what can a customer do if his or her money is stuck in an ongoing project and possession gets delayed? "People will have to continue to approach the district consumer forum, state consumer forum or the National consumer forum," he said.


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