While RERA or Real Estate (Regulation and Amendment) Act, 2016, will slowly change the way the real estate industry operates in India, the Act has also thrown open a few aspects that need extensive deliberation.
One such issue is the liability of developers to provide for workmanship for structural defects for a period of five years.
RERA lays down that “In case any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale relating to such development is brought to the notice of the promoter within a period of five years by the allottee from the date of handing over possession, it shall be the duty of the promoter to rectify such defects without further charge, within thirty days, and in the event of promoter’s failure to rectify such defects within such time, the aggrieved allottees shall be entitled to receive appropriate compensation in the manner as provided under this Act.”
An expert in Real Estate said that builder’s responsibility towards a structural defect for up to 5 years is not harsh because “builders can appropriately cover themselves through insurance. The concern for builders would be workmanship for 5 years which may pose a considerable challenge”.
The question is how should a developer proceed because he sources raw material from other vendors and delegates the construction to contractors and sub-contractors?
The Haryana Real Estate (Regulation and Development) Rules, 2017 (draft rules) define structural defects as “actual physical damage/defects to the designated load-bearing elements of the building, apartment or unit like faults, breakage or cracks, appearing over time in elements such as load bearing columns, walls, slabs, beams etc which can affect the strength and stability of the apartment or the building and shall include
- defects due to design attributes of reinforced cement concrete (RCC) or structural mild steel (MS) elements of an engineered (structurally designed) building structure
- defects due to faulty or bad workmanship of RCC or MS work
- defects due to materials used in such RCC or MS work (iv) major cracks in masonry work that are induced as a result of failures of RCC or MS work
- Any defect which is established to have occurred on account of negligence, use of inferior materials or non-adherence to the regulatory codes of practice by the promoter.”