Government Reviews Real Estate Act Amid RERA Enforcement Challenges
The Narendra Modi-led government plans to review the Real Estate (Regulation and Development) Act of 2016 due to issues faced by homebuyers and the inability of RERAs to enforce their orders effectively.
Real Estate ActReraHomebuyersGovernment ReviewReal Estate RegulationReal EstateOct 09, 2024
Last month, the ministry held a meeting with homebuyers' associations to discuss the issues they have been facing. This was the first such meeting held in May. The ministry has now requested data from all 32 RERAs across various states and Union Territories. This data includes the number of orders passed, their implementation status, and the reasons for any delays in enforcement. This move comes in response to RERAs' demand for amendments to the Act to grant them more powers to execute their orders.
A senior ministry official shared, “RERAs have previously suggested amending the Act due to delays and non-implementation of orders. We are now reviewing the functioning of RERAs to identify problem areas. Once we gather the data, it will provide a clearer understanding of the ground realities. We have also sought responses from RERAs about the issues flagged by homebuyers during the meetings. The decision to amend the law will be based on this assessment.”
RERAs, established under the Act to regulate the real estate sector and ensure quick dispute resolution, have faced criticism from both homebuyers and the judiciary for delays in timely redressal of issues. The Supreme Court recently expressed its displeasure, stating that RERAs have become a “rehabilitation center” for former bureaucrats, frustrating the entire scheme of the Act.
Homebuyers' associations have frequently complained about the inefficient functioning of RERAs in states and Union Territories. They argue that authorities in most states have failed to get real estate developers to comply with regulations and provide relief to homebuyers. Activist Abhay Upadhyay, the national convenor of Fight for RERA, highlighted the struggles faced by homebuyers. “In several cases, developers issue misleading ads and provide inconsistent information on their websites and the RERA portal. Another issue is that authorities often fail to get their recovery orders implemented by government agencies. This leaves homebuyers to suffer the consequences,” he added.
RERA officials, however, attribute their inability to enforce orders to the lacunae in the Act. Balvinder Kumar, a retired Indian Administrative Service officer and former member of Uttar Pradesh RERA, explained, “The Act needs to be amended as RERAs don't have the power to get their own orders implemented. They have to rely on state government agencies, such as the development authority or district collectors, to enforce orders. But RERAs lack the authority to issue directives to these agencies.”
Gautam Chatterjee, a retired civil servant and former chairperson of Maharashtra RERA, emphasized the need to bring other stakeholders under the Act. “For a real estate project, a developer must seek permission from various authorities. Timely completion of projects is crucial, and it is essential to get the necessary permissions on time. Government agencies, whose approval is required for projects, should be brought under the Act so that the authority can hold them accountable in case of delays. It is also important that regulatory authorities have more power to implement their orders,” he said.
A former Tamil Nadu RERA member added, “Currently, regulatory authorities rely on district magistrates or civil courts to recover money from builders who delay projects. This process is time-consuming. Given that people's hard-earned money is tied up in these projects, the government should consider granting RERA the power to recover funds directly from builders.”
The ministry has reached out to RERA bodies for their feedback and will use this information to make informed decisions on amending the Act. The goal is to ensure that the real estate sector is regulated more effectively and homebuyers receive the protection and relief they deserve.
Frequently Asked Questions
Why is the government reviewing the Real Estate Act?
The government is reviewing the Real Estate Act to address issues faced by homebuyers and the inability of RERAs to enforce their orders effectively.
What are the main challenges faced by RERAs?
RERAs face challenges such as delays in enforcing orders, lack of power to implement their directives, and inefficiencies in addressing homebuyers' complaints.
What has the Supreme Court said about RERAs?
The Supreme Court has expressed displeasure over the functioning of RERAs, stating that they have become a 'rehabilitation center' for former bureaucrats, frustrating the entire scheme of the Act.
What are some proposed amendments to the Act?
Proposed amendments include giving RERAs more power to enforce their orders, bringing other stakeholders under the Act, and allowing RERAs to recover funds directly from builders.
How will the review process work?
The Ministry of Housing and Urban Affairs will gather data from all 32 RERAs about the number of orders passed, their implementation status, and reasons for any delays. This data will be used to identify problem areas and make informed decisions on amending the Act.
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