Homebuyers' Body Objects to MahaRERA's Conciliation Forum, Citing Conflict of Interest
A pan-India homebuyers' body has written to the Centre, objecting to Maharashtra real estate regulator MahaRERA's decision to set up a conciliation forum to settle disputes between homebuyers and builders.
Real EstateReraMahareraHomebuyersConciliation ForumReal Estate NewsAug 25, 2024
The ministry should ensure that the conciliation forum so constituted is independent, uniform and comprises impartial persons of repute, the letter noted. The ministry should investigate the constitution, functioning and orders of the conciliation forum to determine whether their conduct and their whole ecosystem favors builders, the letter added.
Maharashtra Real Estate Regulatory Authority has constituted a Conciliation Forum for amicable settlement of dispute between promoter of real estate projects and allottee under section 32 of Real Estate (Regulation and Development) Act 2016 (RERA). However, the FPCE pointed out that section 32 of RERA merely gives power of recommendations to the Authorities and not the power to constitute such a forum itself.
As per section 32(g) of RERA, such dispute settlement forums are to be set up by the consumer or promoter associations and not by RERA Authorities. MahaRERA has not only constituted a Conciliation Forum but is also part of it as Secretary of MahaRERA is the Chairperson of MahaRERA Conciliation Forum. The aforementioned section, doesn't give any scope to interpret that MahaRERA can either constitute it or become part of it or both.
Needless to say that this has been done under influence and for the benefit of the builders which becomes very clear when you see the composition of the Conciliation Forum of MahaRERA, the FPCE said. The association pointed out that only one organisation representing consumers and three organisations representing builders are members of this forum. If you go further deep, you will find that there are only two individual representative for consumers and six individual representatives for builders i.e lopsided constitution in favor of builders.
The association has called upon the ministry to investigate the constitution of the forum, its functioning and also the orders passed so far to ascertain whether the forum is favoring real estate developers. It has suggested that the ministry should issue guidelines to states after due consultations with all stakeholders for constitution and working of a conciliation forum.
It is important to ensure that the conciliation forum so constituted is independent, uniform and comprises impartial persons of repute on the basis of selection criteria, Upadhyay said. The FPCE also said that the ministry should ensure that RERA authorities are not directly or indirectly part of such a conciliation forum to avoid any possible conflict of interest.
Lok Adalats must be encouraged instead of conciliation forums, the letter said. The association also suggested that if Lok Adalats are functional in any state then that should be encouraged in place of a conciliation forum since it is a better alternative to the conciliation forum as the order passed by the Lok-Adalats have much more legal validity and credibility.
Frequently Asked Questions
What is the issue with MahaRERA's conciliation forum?
The issue is that MahaRERA has exceeded its brief under the Act and given scope of conflict of interest by constituting and being part of a conciliation forum to settle disputes between homebuyers and builders.
What does section 32 of RERA say about dispute settlement forums?
Section 32 of RERA gives power of recommendations to the Authorities and not the power to constitute such a forum itself. Such dispute settlement forums are to be set up by the consumer or promoter associations and not by RERA Authorities.
What is the composition of the Conciliation Forum of MahaRERA?
The Conciliation Forum of MahaRERA has only one organisation representing consumers and three organisations representing builders as members. There are only two individual representatives for consumers and six individual representatives for builders.
What is the FPCE's suggestion to the ministry?
The FPCE has suggested that the ministry should issue guidelines to states after due consultations with all stakeholders for constitution and working of a conciliation forum. It has also suggested that Lok Adalats should be encouraged instead of conciliation forums.
Why is it important to ensure the independence of the conciliation forum?
It is important to ensure that the conciliation forum so constituted is independent, uniform and comprises impartial persons of repute on the basis of selection criteria to avoid any possible conflict of interest.
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