Kolkata: The West Bengal Housing Industry Regulation Act (WBHIRA), which was notified recently, deviates from certain key provisions of the Real Estate (Regulation and Development) Act, 2016, and such deviation will likely to dilute overall impact, a report said on Thursday.
Rating agency ICRA pointed out the state had passed its version of real estate act, known as the West Bengal Housing Industry Regulation Act, 2017 (WBHIRA), on August 16 last year and although the same was expected to be notified within 60 days, the notification happened after nine months on June 1.
"While the objective of the both the Acts remains largely the same, i.e. - to protect the interest of consumers and investors by introducing a regulatory regime to regulate and improve the level of transparency and accountability in the real estate sector, certain key provisions which have been modified in the WBHIRA may impact the ground-level effectiveness of the Act," said ICRA Ltd's Vice President and Sector Head Shubham Jain.
The rating agency's report said while both Acts permit extension of the registration beyond the project completion date under force majeure conditions or under reasonable circumstances upto one year, the WBHIRA has expanded the definition of force majeure to include "any other circumstances as may be prescribed".
Noting delay in project completion is a common issue for property buyers, ICRA said that while the central act removes the possibility of unreasonable delays and extensions, modification of the force majeure clause under the WBHIRA weakens the level of buyer protection on this front.
Despite the deviations, the agency noted that the provisions of the WBHIRA continue to hold "significant importance for buyers and investors, particularly with regards to elimination of fraudulent developers and agents, facilitation of informed decisions by the buyers, increased standardisation and appropriate use of customer funds".
"Fast-tracking of the required regulatory set-up would enable the flow of these benefits to the real estate sector in West Bengal," Jain added.