Moneycontrol PRO

Fast track courts for real estate cases a must for restoring trust among homebuyers

Matters related to land and property make up about two-thirds of all civil cases in the country, and India’s global ranking in contract enforcement is abysmally low at 163.

On being asked about the all-important trust among homebuyers in the real estate market, a Dubai RERA member said that this is the one and only factor that has led nationals of 100-plus countries to invest in the Emirates. He also said that until 2008, the Dubai property market was no different from the Indian real estate. So, what made the difference?

The global financial crisis of 2008 led to several real estate disputes and eroded the trust of global investors in the Dubai property market. It, however, helped the Gulf market to identify the lacunae in its real estate laws. Various channels of amicable settlements were opened and what perhaps changed the perception of global investors was the time-bound settlement of disputes.

In India, what aggravates the misery of homebuyers is the absence of speedy judicial relief. Court adjournments are more of a norm than an exception. Developers use all the tricks in the book to ensure that justice is delayed and also denied to buyers.

Right from the arbitration clause invoked in the Builder Buyer Agreement to RERA, to the High Court and the Supreme Court, it’s the same story. The situation gets worse in case of consumer commissions.

What can a hapless homebuyer do when builders get absence of leave by the courts and a fresh date in the NCDRC takes almost six to eight months. Real estate, a non-standardised product that is sold much before it is even ready, witnesses the maximum number of litigations in this part of the world.

Just look at some of these live case studies.

Ranjeet bought an apartment in 2015 with a Greater Noida builder. The project was delayed for four years. RERA awarded the delay penalty in favour of the buyer but the matter is pending at the UP Real Estate Appellate Tribunal. After a legal battle of almost three years, it seems the only option left for this buyer is to compromise and withdraw the case.

Subhada Deshmukh was appalled to see the house for which he was being given possession in Gurugram. It was nowhere close to what had been promised in the brochures. The builder continues to coerce her into signing the documents and take possession. A legal contest means waiting endlessly to get the dream home.

When Ravish went to the builder’s office to finalise the registration formalities in Ghaziabad, he was given a bunch of papers to sign. The docket included a pre-dated consent form for permitting the builder to make FAR/layout changes in the project. When he refused to sign, he was told that the builder’s legal team would deal with his case and he would have to wait for possession and registration.

Devesh’s story is no difference. While he took possession of his apartment, he challenged the one-sided unfair contract before the state consumer commission. What followed was a series of cases against him by the builder which included a criminal defamation case for having posted messages against the builder on the social media.

Trust deficit is the one big issue that all stakeholders in the real estate sector have to admit and deal with. The liquidity crisis of the real estate sector is directly linked to the trust deficit and fear factor of homebuyers. No one would like to get into a lengthy and expensive legal battle with the builder.

In 2008, an organisation dealing with NRIs had urged the government to introduce fast track courts to facilitate speedy disposal of real estate disputes back home. Needless to say, absence of fast track courts is a big deterrent in attracting NRIs investment into the property market.

After much deliberations, in 2014 the law ministry had also proposed setting up of 1,800 fast-track courts across the country to speed up disposal of cases pertaining to land acquisition and property disputes besides those involving heinous crimes. As per the proposal, land acquisition and property cases which had been pending for more than five years were to be taken up on priority. No plan of action has been rolled out since then.

The pendency of cases in Indian courts have reached an alarming 45 million. Matters related to land and property make up about two-thirds of all civil cases in the country, as per a study by a leading thinktank and research institution that focusses on law and justice system reforms and access to justice. India’s global ranking in contract enforcement is abysmally low at 163.

There are only two ways by which trust among homebuyers can be restored. Either the developers clean up their mess and adopt best practices on their own. The second option of fast track courts is the only way forward.

Ravi Sinha is CEO, Track2Realty.
first published: Mar 19, 2022 06:06 am