The purpose of the Real Estate (Regulation and Development) Act was to balance the interests of all stakeholders, and to address multiple systemic issues that existed in the sector.
With the ever-escalating need for housing and infrastructure, the real estate sector is in more demand than ever. Nevertheless, the second wave of Covid has proven to be deadly and disastrous and real estate industry like several others has been ruthlessly hit by the same, but the demand still seems to be sky-rocketing. Albeit its growing importance, the Real Estate industry in India is considered to be an unorganised sector that lacks transparency and accountability from promoters and developers especially due to the delays in project completion and in pre-decided schedules, thereby, leaving such buyers in a lurch. Additionally, the existence of multiple state laws only makes the relief mechanism to be a grueling path for the consumers to seek. To lessen the plight of the consumers in the real estate sector, the Government introduced RERA in 2016.
The purpose of the Real Estate (Regulation and Development) Act was to balance the interests of all stakeholders, and to address multiple systemic issues that existed in the sector. It primarily sought to bring uniformity in various state enactments and sought to ensure that the interests of buyers of commercial and residential real estate units were protected. Further, various relevant authorities were created and vested with the competence for enacting the provisions of the Act, setting up the machinery for administering and adjudicating its provisions and the Authorities were further empowered to make regulations and rules under the Act in a time bound manner.
Also, under the Act, resolution of complaints and disputes by the Real Estate Regulatory Authority (RERA) and the real estate appellate tribunals are also time-bound which indicates the intention of the legislators to protect the interest of the consumers.
Moreover, the Act contains several provisions that address the lacunae in the sector through strict liabilities for promoter irregularities and a disclosure framework, wherein, they are required to mandatorily register for real estate projects and without the necessary approvals, projects cannot be sold, advertised, or booked. Also, the Act imposes many legal and commercial restrictions on promoters and developers to inflict a sense of accountability upon them.
Further, another prominent provision under the Act pertains to delays caused by the promoter while handing over the possession of the property, in such an event, according to the Act, the promoter would be liable to return the amount with interest or compensation and if the consumer does not want to withdraw, they would be entitled for the interest amount during the delay period. Lastly, to ensure that the Act is complied with and that the buyers are not the sole sufferers in the event of delays in the completion of a project, as a deterrent, stringent provisions were introduced and penal provisions are also prescribed for violations committed by buyers or real estate agents.
Despite the ambitious provisions of the Act, non-compliance, deviations, and delays in the implementation are seeming and have led to a sluggish rate of progress. There are rampant delays by the States in setting up their relevant authorities, which further wrecked the situation. Such authorities also created rules in deviation from the Act, and failed to present any uniformity in its adjudication, which is against the letter and spirit of the Act. Further, the implementation of the Act is also hampered by the apparent bias towards buyers as though the aim of the Act is to protect buyers and their rights, the Act provided for many strict provisions, but to the dismay of the buyers, the same are perceived as draconian by many real estate promoters and significantly impacted their economic interest as well.
Further, various inconsistencies, confusion and discrepancies are prevalent across the country which are persistently escalating due to the lack of dialogue amongst stakeholders and the inability to tap the appropriate machinery to resolve such deficiencies. The same could have been resolved had the Central Government invoked the provisions of Section 91 of the Act which provided for “… incorporation of provisions not inconsistent with the provisions of the Act, for removal of difficulty arising in giving effect to the provisions of the Act, within a period of two years from the date of commencement of the Act.” Moreover, despite the loopholes in the Act, the same cannot be enforced upon states as the Act is a toothless tiger which requires teeth to do the needful.
Notwithstanding the emerging urgency of a robust real estate act in today’s pandemic struck country wherein the need for housing and infrastructure is undying, RERA has not been proactively spoken of and adopted in its true spirit and form which if done, would enable a smooth sailing transition from the inconsistent and ambiguous state of the Act to being a beacon of hope for all involved.
https://www.financialexpress.com/money/rera-protects-interests-of-homebuyers-know-its-benefits/2270545/
