It’s been five years since the Real Estate (Regulation and Development) Act was implemented but till date less than 10% of the ongoing real estate projects that were registered under the Act have been delivered as developers have all along asked for extension in project timelines, said Abhay Upadhyay, president Forum for People’s Collective Efforts.
“Getting RERA timelines extended is not the builders’ birthright at homebuyers’ cost. Granting indiscriminate extension in timelines without taking the opinion of homebuyers, without sufficiently compensating them is unfair,” he said at a seminar titled 5 Years of RERA and the Way Forward.
FPCE, an umbrella body of homebuyers, recently won a case against the West Bengal government which had notified its real estate law, HIRA, in contravention of the Central Act. The Supreme Court had termed the West Bengal law unconstitutional.
Reflecting on the areas where RERA has been successful and where it had failed, he said that while 64,000 projects getting registered across the country in the last five years was a ‘good sign’, the legislation had not lived up to homebuyers’ expectations when it came to execution of RERA authority orders as many buyers were not getting back the refund due to them.
The fact that 65,000 projects have been registered under RERA means that they are now in some form of legal net which was not existent earlier. This has proved to be beneficial. Post Rera, builders cannot collect more than 10% at the time of booking. The law has linked construction with payment schedule. This is another big change brought about by the legislation.
Fund diversion too has been checked to a large extent. Also, filing a complaint has been made simple. The fact that 64,000 cases have been disposed of is also positive news.
“Earlier getting a date after more than nine months was a task in itself. Now, several buyers have received a favourable order in a matter of six months but the biggest challenge that remains is the execution of RERA orders,” he adds.
Very few refund orders issued by RERA Authorities have been executed, he said.
Recounting his experience, Avinash Pathak, a homebuyer from Greater Noida, said at the seminar that he had filed a petition before UPRERA and also received a favourable order in his favour. “It is yet to be implemented. The recovery order has been pending before the district magistrate’s office since 2020. I will now have to approach the High Court to ensure that the RERA order is executed,” he said at the seminar organized by
Legal experts said that most states have a concept of legislation of public demand recovery in place. Under that once a buyer has received a recovery certificate, the designated court has the power to enforce the RERA recovery certificate and issue a notice to the builder. If that is not adhered to, the court can get his assets attached.
“It’s time a separate recovery officer is appointed in the district magistrate’s office who can recover the amount on behalf of the homebuyers in a time bound manner,” explained Devashish Bharuka, Supreme Court advocate, who had represented homebuyers in the West Bengal's Housing Industry Regulation Act (WBHIRA) matter.
The Supreme Court on May 4 struck down WBHIRA 2017, the law regulating West Bengal’s real estate sector, saying it was ‘unconstitutional’ as it creates a parallel regime and is in direct conflict with the Centre’s Real Estate (Regulation and Development) Act (RERA).
Upadhayay also questioned the RERA authorities about introducing new concepts that were beyond the legal framework of the law, rather than focusing on providing relief to homebuyers.
He pointed out that setting up of Conciliation Forums, self-regulatory organisations and rating of projects was uncalled for and unnecessary. “If builders are not following orders of RERA authorities, how are they expected to follow orders of conciliation forums,” he asked.
The Maharashtra Real Estate Regulatory Authority (MahaRERA) had issued a circular in 2019 that developers have to register with its approved Self-Regulatory Organisations (SRO) before applying for MahaRERA registration for residential projects.
“There is nothing in the Act that can be registered except for real estate projects or agents. There is no provision to register anything other than this,” Upadhyay said.
Commenting on Uttar Pradesh Real Estate Regulatory Authority (UP Rera) plan to start grading projects and developers based on various parameters such as financial quality, organizational structure and certifications, track record, compliance adherence and customer feedback, he said that a regulatory body cannot be associated with rating of any project.
On the way ahead, he said that RERA Authorities would have to become proactive. They have been given sou motu powers (on their own without receiving any formal complaints) under section 7, 35 and 38 of the Act. “That power needs to be put to use.”
If RERA orders are not being obeyed, Authorities have been given powers under Sections 59, 63 and 64 to penalise builders. How many orders have been passed until now penalizing the builders where the penalty is as high as 5% to 10% of the project cost. Why has this section not being evoked until now, he asked.
“RERA Authorities have to meet the expectations of homebuyers they have to start asserting themselves. Five years is enough time for any regulatory body to prove effective,” he said.
According to statistics made available by the ministry of housing and urban affairs, as many as 30 states/ UTs have set up RERA, 28 have Appellate Tribunal and 27 Regulatory Authorities have operationalized their websites. A total of 63,583 real estate projects and 50,256 real estate agents have been registered and 66,779 cases have been resolved under RERA.