DDA out of proposed regulator’s jurisdiction

DDA out of proposed regulator’s jurisdiction
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First Published: Wed, Feb 27 2008. 11 07 PM IST

Realty check: A block of DDA flats in New Delhi. The Delhi government wanted all local bodies such as DDA and MCD to be regulated. (Photo: Hindustan Times)
Realty check: A block of DDA flats in New Delhi. The Delhi government wanted all local bodies such as DDA and MCD to be regulated. (Photo: Hindustan Times)
Updated: Wed, Feb 27 2008. 11 07 PM IST
New Delhi: The urban development ministry which wanted to expand the scope of a proposed real estate regulator for New Delhi to oversee government-linked agencies, besides property developers, has decided against the move because it says it would be too overwhelming for a single authority to regulate all local bodies, defeating the purpose of any regulation.
The ministry now plans to introduce the Real Estate Management (Control and Regulation) Bill in its original form under which the regulator would only regulate developers and agents.
Realty check: A block of DDA flats in New Delhi. The Delhi government wanted all local bodies such as DDA and MCD to be regulated. (Photo: Hindustan Times)
“The Delhi government wanted all local bodies to be regulated,” said an official in the urban development ministry who didn’t want to be identified as officials do not usually comment on issues when Parliament sessions are on. “But we feel there will be a lot of pending litigation before the regulator if local bodies are included. It is also not necessary to regulate local bodies as they have their own internal grievance cells to deal with complaints.”
The ministry was looking at a proposal where the regulator would check unfair practices by not just developers, but also other local bodies such as the Delhi Development Authority (DDA) and the Municipal Corporation of Delhi (MCD).
While DDA, the de-facto landlord, acquires land for the development of New Delhi and builds low-income houses, MCD provides civic services to the city such as garbage collection and road maintenance and clamping down on illegal buildings.
Under the Real Estate Management Bill, the ministry has proposed the setting up of a regulator to check developers and real estate agents. The proposed Bill will also provide for punitive action against developers and cancellation of licence of builders if they are found to be flouting the norms set by the Bill.
The real estate regulator would be first set up in Delhi. The Union government is hoping that Delhi’s Real Estate Management Bill will be adopted as a model by other states, which are looking to regulate the real estate industry. As land is a state subject, state governments will have to set up their own real estate regulators.
The urban development ministry of the Union government oversees New Delhi by virtue of the city’s position as India’s capital.
The draft for the real estate management Bill was prepared last year when the property market was overheated. The proposed regulator will be a quasi-judicial body and comprise former bureaucrats. It is is being set up to protect the interests of customers who are often left in the lurch by fly-by-night developers who fail to deliver on promised projects.
However, the Bill under which the regulator is to be set up has not yet been introduced in Parliament. It is not unlikely that it will be introduced in the Budget session of Parliament or even the monsoon session. “We are not ruling out the possibility that it will be introduced but right now it is not one of our top priorities,” the urban development ministry official added. “The whole process of introducing the Bill in Parliament is now stagnant.”
The first part of the Budget session, which started on 25 February, will go on till 20 March. The second part of the session will be from 15 April to 9 May. The date of the monsoon session will be fixed later.
Developers say it is import for any regulator to monitor local bodies such as DDA.
“The process of dealing with local bodies can be very frustrating because of the delays caused by them,” Arvind Parekh, director of Omaxe Ltd, said. “If local bodies are not regulated, things will go back to the old system. There will be more delays, more litigation and local bodies will take longer time to execute projects.”
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First Published: Wed, Feb 27 2008. 11 07 PM IST