Real Estate | RERA has empowered homebuyers, but it’s a long road ahead

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Recently, the regulatory authorities and the appellate tribunals have begun asserting their power. This is another success of RERA

The Real Estate (Regulation and Development) Act, 2016 (RERA) was passed by Parliament in March 2016, and came into effect from May 1, 2016. Last month it completed six years.

In these years, it is clear that the legal framework aimed at empowering India’s homebuyers has been further fortified through various decisions of the Supreme Court and other judicial forums. The fact that the executive, the legislature, and the judiciary realised that homebuyers were being cheated by many builders who took away their life’s savings is RERA’s biggest success.

Though the first couple of years were spent getting the implementation architecture in place, including early successes in project and agent registrations, recently the regulatory authorities and the appellate tribunals have begun asserting their power. This is another success of RERA, and a pointer of things to come in the interest of homebuyers.

The apex court, while deciding the case of Newtech Promoters and Developers Pvt. Ltd. vs State of UP & Others, held that the regulatory authority has the power to order refund, interest and penalty, and that the adjudicating officer has the power to award compensation. It also said that the regulatory authority can delegate its powers to a single member to hear complaints; or the pre-condition of deposit under proviso to Section 43(5) for entertaining appeals, are in sync with the Constitution of India. Thus, in one stroke, it empowered millions of homebuyers.

The pre-condition of deposit for filing appeals by the builders was conceptualised in the law to be a deterrent to ensure that builders don’t conjure up filing appeals to avoid regulatory orders. This is a huge win for the homebuyers, hoping early resolution of disputes.

Judicial alacrity was visible in Uttar Pradesh, where in a case pertaining the refund of homebuyers’ money, the Allahabad High Court ordered the Gautam Buddh Nagar District Magistrate to appear before the court, albeit virtually. This helped in the early disposal of the case with the homebuyer getting his life savings back.

In a case in Gurugram, Haryana, RERA issued arrest warrants against the directors of a real estate company, and in another it directed to freeze all bank accounts associated with a real estate entity. Similarly, in Uttar Pradesh, RERA imposed a penalty of Rs 1.40 crore on nine builders for non-compliance of its orders. Exercising its powers, in Maharashtra, MahaRERA directed a builder to pay Rs 10,000 daily until handing over of possession of a flat. These and many such decisions have emboldened the will, desire, and dedication of real estate regulatory authorities to dispense justice.

Likewise, the recently-held meeting of the Central Advisory Council (CAC) under RERA, comprising senior functionaries of the Government of India and state governments, was live streamed. This has instilled a feeling of hope and confidence among homebuyers that public policy and decisions are not going to be made at the behest of powerful lobbies, but in full public glare in the interests of the public.

The CAC took some important decisions, namely: the constitution of a committee comprising homebuyers’ representatives to review cases where orders passed have not been implemented; the mandate to form a sub-group under the chairpersonship of the Secretary, Mo/HUA, to meet at least every six months to resolve homebuyers’ issues; the ministry, homebuyers, and builder representatives to jointly petition the Government of West Bengal and Telangana to implement RERA expeditiously; among others. This was the first CAC meeting that addressed homebuyer concerns, showing the way forward.

Challenges Ahead

Despite these successes, it would be imprudent not to spell out lapses, and deficiencies.

The real estate sector is far from removing malpractices that make it infamous. Homebuyers aren’t yet sure if project registration with RERA authorities guarantees its timely possession with all promised amenities. Homebuyers still dread the possibility of the builder vanishing with their hard-earned money, or miring them in unnecessary and burdensome litigation. This is one area where RERA falls short of expectations. The fault is not with the law, but with those who are responsible for its enforcement.

The responsibility to restore trust in the sector and confidence of the prospective homebuyers lies squarely on the regulatory authorities. It should be their endeavour to proactively act, and not just react. They should develop mechanisms of intelligent input systems by which they can intervene in projects well on time, and bring them back on track before it’s too late, including spot checks to ensure all promised amenities are provided. This would also help avoid unnecessary litigation.

Without doubt, on the ground RERA has made its presence felt in the interest of homebuyers, and has instilled fear among unscrupulous builders. However, though we have come a long way in these past six years, there is yet a long way to go before we can truly say RERA has succeeded in reforming and professionalising the real estate sector.

With the kind of sensitivities shown by the Supreme Court towards suffering homebuyers, and the new-found zeal shown by executives and the regulatory authorities, RERA will surpass the expectations of all stakeholders, ensuring that owning a house becomes seamless, and free of risk and malpractices.

Abhay Upadhyay is president, The Forum for People’s Collective Efforts, a pan-India homebuyers’ body, and member, Central Advisory Council, RERA, Ministry of Housing and Urban Affairs. Views are personal, and do not represent the stand of this publication.