The Ministry of Housing and Urban Affairs made a Twitter announcement on Thursday, stating that it is in the process of examining whether both Acts can harmoniously coexist.
MUMBAI: In a legal quandary, the government is currently assessing the feasibility of two distinct Acts governing the regulation of the real estate sector—one enacted by the Central government and the other by the state of West Bengal.
The focal point of the issue revolves around the coexistence of the Real Estate (Regulation & Development) Act, 2016 (RERA), a central government legislation, and the Housing & Industrial Regulation Act, 2017 (HIRA), enacted by the West Bengal government.
The Ministry of Housing and Urban Affairs made a Twitter announcement on Thursday, stating that it is in the process of examining whether both Acts can harmoniously coexist.
While RERA was fully notified in 2017, granting states the authority to formulate their rules and appoint regulatory authorities, the West Bengal government stands as the only state to enact its separate legislation—HIRA.
Earlier, the government had established a sub-committee during the Central Advisory Council meeting, with the objective of persuading the Bengal government to adopt RERA and oversee its implementation in other states. However, the notification of this sub-committee is still pending.
The ministry emphasized the ongoing examination of having central and state Acts on the same subject, stating that, under these circumstances, a sub-committee would serve no purpose. They believe full compliance with transformative legislation like RERA could bring positive changes to the sector, benefiting all stakeholders.
Notably, discrepancies between RERA and HIRA exist in the definition of the force majeure clause and garage. RERA limits the invocation of the force majeure clause to specific circumstances such as war, drought, floods, earthquakes, fires, or other natural calamities affecting regular real estate project development. In contrast, HIRA allows for the declaration of the force majeure clause under additional circumstances prescribed beyond those listed in RERA.
Furthermore, differences emerge in the definition of a garage, with RERA providing a specific description, while HIRA allows for an area as prescribed and a garage as sanctioned by the competent authority.
Concerns have been raised by experts regarding the potential dilution of the Act, emphasizing the importance of states adhering to RERA in both letter and spirit. The outcome of this examination may have significant implications, potentially rendering RERA redundant if other states decide to adopt a similar model. As most states progress in establishing regulators and passing orders, the legal landscape in the real estate sector is undergoing a critical evaluation.
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