Has RERA Truly Made a Difference in the Indian Real Estate Sector?
The Real Estate (Regulation and Development) Act
ReraIndian Real EstateHomebuyersDevelopersRegulationReal Estate MaharashtraMay 27, 2024
Reflecting on the importance of this governing body, the Punjab and Haryana high court had stayed the Punjab govt’s decision to take over the Real Estate Regulation Authority (Rera). In another instance, the court upheld Maharashtra RERA Appellate Tribunal decision to make co-promoters jointly liable towards homebuyers under RERA.
Taking cognizance of the fact that customers can be wrong too, the Rajasthan RERA rejected the homebuyer's complaint for basement parking facility, holding that it was never part of the approved construction plan. Karnataka RERA rejected the homebuyer’s complaint of restraining the builder from constructing on the area reserved for common amenities, emphasizing that despite differences between conceptual and sanctioned plans, the completion and delivery of apartment units remained unaffected.
In the case of non-payment by homebuyers, Maharashtra RERA in Pune directed that the agreement for sale of four homebuyers be terminated over non-payment of balance amount. Likewise, Telangana RERA ordered the homebuyer to pay the remaining amount with interest to the builder for failing to adhere to the payment schedule.
Also commendable are the actions taken by RERA to protect the developer’s interests such as Delhi Real Estate Appellate Tribunal setting aside the order and penalty imposed by the Delhi RERA holding that while exercising its authority against a promoter or any real estate agent through suo-motu proceedings, must inform the concerned party of the alleged violations by providing specific details in the notice. The ministry of finance too has directed all public sector banks to ensure compliance with provisions of the Real Estate (Regulation and Development) Act, 2016, while allowing developers to withdraw funds from Rera accounts.
The progress of RERA in India is nothing but patchy with 32 States/UTs having a functional RERA, Ladakh, Meghalaya, Nagaland, and Sikkim are yet to establish theirs. The Real Estate Appellate Tribunals have been set up in 28 States/UTs, with Arunachal Pradesh, Jammu and Kashmir, Ladakh, Meghalaya, Mizoram, Nagaland, West Bengal, and Sikkim in progress.
In terms of addressing consumer complaints, as of end of 2023 RERA have resolved 1,16,300 cases, according to data from the Ministry of Housing and Urban Affairs. UP led with 38 per cent cases, followed by Haryana with 18 per cent, Maharashtra 13 per cent. These 3 states jointly accounting for 69 per cent of resolved cases nationwide.
RERA has undoubtedly led to accountability and financial discipline in the real estate eco-system, evidenced by the rise in capital flows in the sector, easier home loan availability for RERA registered projects and increased sales realizing improved cash flow for developers and reduced dependence on institutional finding. While cracking the whip has to some extent regulated the real estate sector, some major gaps remain that remind of the good old Chinese idiom 'Crouching Tiger Hidden Dragon', in other words, ‘people with special hidden talents’ or in the case of RERA, an institution of high potential benefits.
While the performance of RERA cannot be denied, the sluggish pace of case resolution and implementation of relief measure leaves much to be desired. There have been several occasions cited where compensation granted by RERA never got executed or has been inordinately delayed, leaving the homebuyers in a limbo.
The Real Estate (Regulation and Development) Act, 2016 (RERA) was introduced to regulate the real estate sector and protect the interests of homebuyers. The Act came into effect from May 1, 2017, and is set to complete seven years of its existence.
The Ministry of Housing and Urban Affairs is responsible for implementing the provisions of the Real Estate (Regulation and Development) Act, 2016. The Ministry has set up the Real Estate Regulation Authority (RERA) to regulate the real estate sector.
Frequently Asked Questions
What is RERA?
RERA stands for Real Estate (Regulation and Development) Act 2016 which was introduced to regulate the real estate sector and protect the interests of homebuyers
When did RERA come into effect?
RERA came into effect from May 1 2017
How many states/UTs have a functional RERA?
32 States/UTs have a functional RERA while Ladakh Meghalaya Nagaland and Sikkim are yet to establish theirs
How many cases have been resolved by RERA as of end of 2023?
As of end of 2023 RERA have resolved 1 16 300 cases according to data from the Ministry of Housing and Urban Affairs
What are the major gaps in RERA's functioning?
The major gaps in RERA's functioning include the lack of teeth to RERA as it has no enforcement machinery or any control over the local bodies which approve the building plans and give other clearances and even the financial institutions for extending project finances
Related News Articles
Top-Performing PMS Schemes: Up to 50% Returns for HNIs in 2024
Discover the top PMS schemes that delivered impressive returns to high net-worth individuals in 2024, driven by themes such as real estate, power, defence, and more.
Pesky Calls from Finance and Realty Sectors on the Rise
A recent survey reveals that most mobile users receive unwanted calls daily, with financial services and real estate sectors being the top culprits.
Arkade Developers IPO Sees Overwhelming Response with 106.40 Times Subscription on Final Day
Arkade Developers, a fast-growing real estate development company with a significant presence in Mumbai, has seen its initial public offering (IPO) subscribed 106.40 times on the last day of the offer.
Chennai's 25-Year Transformation: Office Space Surges 75-Fold, Housing Grows 27-Fold
Chennai's real estate market has witnessed remarkable growth over the past 25 years, with significant increases in office, residential, and logistics sectors.
Omaxe Group Invests Rs 6 Billion in 'New Singapore' and 'Clarkee' Projects
Omaxe Group, a leading real estate developer, has announced a significant investment of Rs 6 billion in the development of 'New Singapore' and 'Clarkee' projects. These ambitious ventures are strategically located to leverage the benefits of major infrast
Maharashtra Revises Ready Reckoner Rates by 3.9%: Impact on Property Market
The Maharashtra government has revised the ready reckoner rates by 3.9%, which will directly impact property prices, stamp duty, and registration fees. This decision is expected to bring significant changes to the real estate market in the state.