How UP RERA addressed about 90% of consumer grievances

When the Uttar Pradesh Real Estate Regulatory Authority (UP RERA) declared recently that 42,000 of the 47,000 complaints registered between May 2017 and December 2022 had been disposed of, it seemed too good to be true. Just a month ago, I had commented that the Odisha RERA had thrown up its hands and declared its inability to function because the law fell short of the requirements for efficient functioning. I had then asked if the consumer protection law was unravelling.

UP RERA addressed 88.1 per cent of allottee grievances. The non-execution of orders was a complaint that consumers had with RERA from the very beginning. UP RERA clocked an impressive 77 percent compliance, with 9,900 executions of the 12,800 requests in which compliance with the final order was not done.

So how did UP RERA, with 40 per cent of the country’s problems to begin with, do what others had struggled with? Could this become a norm for other RERAs to follow? It is a textbook story of how even token support from the government can go a long way in allowing this consumer protection body to function effectively. Once the message of state support for the law from the Chief Minister and the Minister of Urban Development became clear at a massive conclave just a year after RERA came into being, many other compliances fell into place. After all, real estate is a huge growth sector for both the central and state governments.

Interpreting The Law

The state had set up RERA on time, giving it a first-mover advantage. Assigning the role to a former chief secretary of the state, Rajive Kumar, who was a seasoned officer in the state’s administrative system, turned out to be a good move. Being a new law, there was so much interpretation and coordination required with various state agencies. The success formula was to take advantage of the flexibility that a new law affords and get the interpretation sealed by securing legal opinion, whenever in doubt. The final seal of approval was when the various developers challenged the decisions of UP RERA in the High Court and Supreme Court and they withstood scrutiny. With the interpretation ratified by the apex court, compliance increased and the authority could confidently rule as market forces understood that the rules of the game had been settled.

The authority, on its part, also initiated many features that brought efficiency, such as e-courts and online registration of complaints. Now consumers are allowed to flag online that the orders have not been complied with, and can even raise it to the chairman in group online sessions entitled Samvad. After two follow-ups as mandated by Section 40 of the Act, the Authority invokes Section 41, under which arrears of land revenue are invoked and recovery certificates issued to the District Magistrates. As of today, Rs 435 crore has already been distributed.

In addition, under Section 40(2), the authority has a single bench to hear recovery complaints and issue execution orders. This was challenged in court and went through. Once the Supreme Court rules on the matter, it becomes the accepted law. This can now be invoked by other RERA authorities as well so that those like Odisha can now quote precedents. Today UP RERA devotes as much time to hearing new cases as to follow-up.

Unfinished Agenda

Despite all this success, the UP RERA chairman agrees that certain provisions of the law still need to be rectified.

1. A couple of clerical errors should be changed.
2. There must be some provision for issuing directives to stakeholders, other than the promoters, buyers and agents. This includes the authorities and sometimes financial institutions, which take their own time, so at least a direction that these should be decided within a fixed time span would help.
3. Strengthening the omnibus Section 8 deals with what the authority has to do after revocation of registration or lapse of registration. When quoted with other sections of RERA, it can be interpreted in the widest possible way. If a project is under Section 8, for instance, whether there can be a similar standstill arrangement as in the National Company Law Tribunal (NCLT) about the other dues till the project gets finalised would ensure that at least the project gets completed on the ground. After all, RERA was set up to get projects completed and delivered.
4. An amendment to the Insolvency and Bankruptcy Code (IBC) is another demand to make RERA’s functioning more efficient. If somebody approaches the NCLT for a residential project, can they ask the concerned RERA whether the resolution is possible in a fixed time period without getting into NCLT?

Today there is a lot of learning inter se. Solutions from one RERA can be quoted by another as a precedent.  Basically, it is Section 40 of the UP RERA Act and its Rule 23 and 24 that are relevant. Section 40 deals with the recovery of interest or penalty or compensation and enforcement of order while Rule 23 deals with the manner of recovery of interest, penalty and compensation and Rule 24 with the manner of implementation of order, directions or decisions of the Adjudicating Officer, the Authority or the Appellate Tribunal.  The solutions are clearly there for the seeking. It only requires solution seekers and strong state backing to succeed.

E Jayashree Kurup is a writer/researcher in real estate. She is Director, Wordmeister Editorial Services, Cities and Real Estate. Views are personal and do not represent the stand of this publication.