Consumer Connect: Fix RERA Implementation Gaps to Protect Homebuyers, Says Expert
The Real Estate (Regulation and Development) Act, 2016 (RERA) was introduced to bring transparency and accountability to the real estate sector, primarily to protect homebuyers. However, recent remarks by the Chief Justice of India (CJI) have sparked a debate on its effectiveness. The CJI observed that RERA is increasingly seen as favoring defaulting builders and failing to protect homebuyers, suggesting that it may be better to abolish the act altogether. These comments have raised significant concerns, especially among those who have been closely associated with RERA's implementation.
Advocate Shirish V Deshpande, chairman of Mumbai Grahak Panchayat, has been deeply involved in the framing and implementation of RERA in Maharashtra. He views the CJI's remarks as a wake-up call for all RERA authorities and the Ministry of Housing and Urban Affairs. Deshpande emphasizes that these observations should be taken seriously and that immediate corrective action is necessary.
The experience of homebuyers in Maharashtra aligns with the court’s concerns. Delays in dispute resolution, weak enforcement, and a growing perception that authorities are ineffective and biased are significant issues. The CJI's dissatisfaction with the appointment of retired IAS officers as chairpersons of RERA authorities in various states and union territories reflects deeper structural concerns. However, Deshpande argues that scrapping RERA is not the solution.
The Real Estate (Regulation and Development) Act, 2016 contains strong provisions to safeguard homebuyers’ interests. Scrapping it would allow errant builders to go scot-free and erase the legal accountability and transparency introduced in the real estate sector. It is unlikely that the CJI literally intended abolition; rather, the strong wording is meant to shake the system out of complacency.
The message is clear – the Supreme Court is watching, and authorities must course-correct. RERA has brought much-needed transparency by mandating the registration of all real estate projects with state authorities, except for small projects on plots not exceeding 500 square metres or those with not more than eight apartments. However, MahaRERA has interpreted Section 3(2)(a) in a manner that exempts projects with 200 to 250 flats in 25-to-30-storey towers if the plot area is within 500 square metres. This interpretation, according to Deshpande, defeats the legislative intent, which never aimed to exempt such large developments.
A similar issue arises in redevelopment projects. MahaRERA has maintained that residents in the rehabilitation portion of redevelopment schemes are not covered under RERA. Mumbai Grahak Panchayat has consistently argued that when a redevelopment project includes a sale component, the rehab portion should not be excluded. Persisting with such builder-friendly interpretations inevitably strengthens the perception highlighted by the CJI.
Coincidentally, a Real Estate Development Conclave was held in Delhi the day after the court’s remarks, attended by the MoHUA minister. Deshpande raised these specific issues, along with other areas requiring amendment. The minister has indicated a willingness to incorporate the suggestions of Mumbai Grahak Panchayat in the proposed amendments to RERA to ensure stronger protection for homebuyers.
The path forward lies not in dismantling RERA, but in enforcing it in letter and spirit. Advocates like Deshpande are calling for a more robust and fair implementation of the act to truly protect the interests of homebuyers and maintain the integrity of the real estate sector.
