RERA watches out for homebuyers but who watches over the watchdog?

State real estate regulatory bodies do not fall under the ambit of the state Lokayukta to address homebuyers' grievances.

After several homebuyers complained to the Lokayukta against the Karnataka Real Estate Regulatory Authority (KRERA) for allegedly passing misleading orders and dereliction of duty, the state’s anti-corruption ombudsman clarified KRERA does not come under its ambit.

Although the Karnataka Lokayukta Act 1984 mandates an investigation against any chairman or vice chairman under any law of the state legislature, KRERA is beyond its jurisdiction for investigations, a senior Lokayukta official told Moneycontrol.

"Orders passed by RERA are in the exercise of their quasi-judicial power conferred under the statute. Investigation under Lokayukta Act cannot be pursued as per provisions contained in Section 5 of the Act," the official said.

The Lokayukta is the ombudsman, executed into power through and for each of the state governments. It is brought into effect in a state after passing the Lokayukta Act in the state assembly.

In case of misleading orders passed by KRERA, the homebuyers can approach the appropriate appellate authority or even move the high court for relief, the official quoted above said.

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Homebuyers can also file a complaint at the Lokayukta in case of corruption or any administrative matters against RERA officials.

Aggrieved homebuyers

Dhanajaya Padmanabachar, a homebuyer in Bengaluru, said the absence of a time-bound system was one of the biggest shortcomings of the RERA system.

"Ideally, a RERA judgment should be faster than the civil courts. However, currently, there is no time-bound complaint redressal system," he noted.

In the first week of April, of 54 orders passed by KRERA, at least 32 cases took a year or more to be disposed of. About eight cases took two years or more and 12 took three years or more. Only two cases took less than a year.

Akash Bantia, a KRERA advocate, said: "Sometimes, to post the order, it takes 60-80 days. And then there is an additional 30-60 days of waiting for the order to be passed."

Several homebuyers, including Padmanabachar, have moved out of KRERA to approach consumer courts for relief.

Another homebuyer pointed out that discrepancies between the Real Estate (Regulation and Development) Act, 2016 and the state RERA rules are a challenge.

"While RERA Act says Occupancy Certificate (OC), the RERA rules mention partial OC. Additionally, RERA Act says the land has to be transferred to the association of allottees;, however, the state RERA rules do not specify how it has to be formed," he added.

For homebuyers, recovering their money in a delayed project through a Revenue Recovery Certificate (RRC) poses another hurdle.

Till July last year, the Karnataka revenue department had recovered only about Rs 26 crore from builders in the state as compensation or refunds to homebuyers for delayed delivery of apartments and an amount of more than Rs 245 crore is still pending.

Of 683 recovery orders passed by the Karnataka Real Estate Regulatory Authority (KRERA), money has been collected from builders in only 84 cases, according to a document issued by the undersecretary of the regulator that Moneycontrol reviewed.

Who watches over RERA?

Advocate Vittal BR said a quasi-judicial body has the powers of the judiciary. However, it is not empowered like a civil court is.

Such orders cannot be investigated by watchdogs like Lokayukta, but it has provisions for the orders to be challenged in an appellate tribunal or the high court.

On a larger scale, this is applicable across India although each state will have its own RERA rules, almost identical, Vittal added.

"Who watches over RERA is one issue that affects the functionalities of these bodies across the states. Most homebuyers are clueless about whom to approach (except the appellate tribunals) for challenging their order or even addressing their grievances against RERA. For example, every consumer forum will have a state and a national forum, including councils up to the Supreme Court, for grievances. However we do not see such cascading forums in RERA," Vittal said.