Even a decade after its enactment, RERA, meant to regulate the real estate sector, continues to be under scanner for its weak enforcement.
Tracing the journey of RERA, mandated to license and register real estate developers, their projects, and marketing agents, today there are more than 1.60 RERA-registered projects and over 1.12 lakh RERA-registered agents. The regulatory authority has a track record of clearing 155,946 cases out of 190,475 cases filed before it.
Despite covering significant ground, RERA recently faced a scathing attack from the Supreme Court, which questioned the utility of this real estate regulatory body for benefiting defaulting builders.
No one can dispute the fact that ever since its inception, RERA has played a crucial role in regulating the unorganised and opaque sector by institutionalising, standardising, and fast-tracking dispute resolution mechanisms and promoting transparency and accountability. Yet, the Supreme Court's concern about the functioning of RERA is genuine. RERA, which was brought in to address the issues of lack of transparency in real estate transactions, biased buyer agreements, fund diversion, and long, complex grievance redressal processes resulting in the shortchanging of property consumers, has not lived up to its promise.
It is a matter of serious concern that even though RERA is in place, homebuyers still find themselves vulnerable to cheating by unscrupulous developers who find ways to dupe property consumers, taking advantage of grey areas in the legislation, administrative flaws, ambiguous buyer agreements, long adjudicating timelines, and incomplete filings and selective disclosures of projects by developers, depriving consumers of taking informed buying decisions.
There are a number of ways developers con homebuyers, starting with misleading ads, brochures, and show flats. Often, homebuyers find to their dismay that whatever is promised is not delivered on the ground. There's compromise on construction quality and fit-outs, arbitrary changes in layout plans with reduced amenities and curtailed green areas, escrow account violations, abuse of escalation clauses to put additional charges, and extension of project timelines by misusing the 'force majeure' clause. Things become worse for homebuyers in the absence of execution powers with RERA, coupled with protracted legal tactics adopted by developers, resulting in delays in grievance redressal.
Further, buyers are made to suffer as developers force temporary occupancy on them, shifting liability for pending works onto hapless homebuyers. In this context, the SC recently stated that a builder can't force a buyer to accept possession sans occupancy certificate, turning down the developer's attempts to offer possession on an 'as is where is' basis.
Despite all the deficiencies, RERA is a necessity for the overall good of real estate stakeholders. The solution lies not in discrediting RERA but rather strengthening it to enhance the efficacy of the regulatory framework so that it serves the purpose for which it was intended.
Today, the biggest handicap rendering RERA less effective is its inability to enforce its own orders related to providing relief to aggrieved homebuyers. At present, RERA authorities depend upon the executive system and police for enforcement of its orders relating to refunds, compensation, and house possession in favour of homebuyers.
There's an urgent need to empower RERA with execution authority. Shekhar Patel, President, RERA, has rightly called for authorising RERA to directly enforce its orders without the need for civil court intervention. He also emphasises the need to create a dedicated RERA enforcement cell in each state to take action against non-compliant developers. Further, by setting up mediation and arbitration centres within RERA, dispute resolution can be fast-tracked.
Industry leaders also suggest broadening RERA's ambit by bringing contractors (responsible for project execution and impacting construction timelines, project quality, and timely delivery) under the umbrella of RERA to ensure enhanced protection for homebuyers.
Clearly, a reinforced RERA with broader accountability across the entire development chain is the way forward to serve the interests of not just homebuyers but other stakeholders as well, promoting the real estate sector as a whole, which is key to achieving the goal of Viksit Bharat.
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