Monday, May 03, 2010

RERA initiates action against master developers for delay in projects

RERA has sought clarification from master developers, asking them the reason for delay in beginning work on master developments, and has ordered them to accept responsibility towards development of freehold areas.

The RERA Chief, Marwan bin Ghalita, when speaking to the media, revealed that RERA has been co-ordinating with master developers for completion of audited technical reports on all projects that belong to master developer's freehold area. Moreover, RERA has sought clarification as to why a developer is yet to commence a project, as they are aware of the happenings on-site. Also, RERA has given a time frame to sub-developers to explain the reason for not starting construction before any taking any action.

Ghalita explained that RERA is following the approved procedure of cancellation of projects. If any developer is yet to begin work on their project, within six months of receipt of approval from RERA, they will be served with a 10-day notice asking to furnish the Trust Account Department the reason for the delay.

In case the reason for delay is genuine, RERA takes more guarantees on its commitment to begin construction, by offering grace periods to begin construction within approved time frame, which will also be made known to the investors. Despite this, if there is no response to RERA's notice, the project will be issued cancellation notice.

"The developer, however, has the right to object to our letter within seven days of receiving the notice," Ghalita said.

In case the developer does not respond, the agency issues cancellation order for the project, and forwards the project file to the legal section of the Land Department to co-ordinate with the court and other parties to begin the claim process as per the law.

The Land Department mediates and tries to resolve the issue through mutual agreement between developer and investor. But, in case no agreement has been reached, the issue could be transferred to Property Court, Ghalita said.

RERA had formed a special committee in May 2009 to cancel projects, based on technical reports, and about 27 such projects were considered for cancellation, it has been reported.

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