Supreme Court Criticizes RERA for Delays and Inefficiencies in Real Estate Dispute Resolution

The Supreme Court has recently criticized the Real Estate Regulatory Authority (RERA) for its inefficiencies and delays in resolving property disputes. RERA was introduced on May 1, 2016, with 59 of its 92 sections, and became fully operational nationwide on May 1, 2017. The primary objective of RERA was to protect flat buyers from dishonest builders and ensure transparency and efficiency in the real estate sector.

The object clause of RERA is as follows: To establish the Real Estate Regulatory Authority for the regulation and promotion of the real estate sector and to ensure the sale of plots, apartments, or buildings in an efficient and transparent manner. It also aims to protect the interests of consumers in the real estate sector and establish an adjudicating mechanism for speedy dispute redressal.

However, the Supreme Court, in a recent hearing on February 12, 2023, expressed strong dissatisfaction with the functioning of RERA. The bench, consisting of Chief Justice of India Surya Kant and Justice Joymalya Bagchi, stated that while the intention of RERA was to protect flat purchasers, it seems to be benefiting builders instead. The court noted that RERA courts have failed to reduce litigation related to property matters, with some cases pending for over 11 months since the order was pronounced.

The RERA Act stipulates that matters should be resolved within 60 days, but the ground reality is that cases often drag on for years, leaving flat purchasers without justice. Additionally, the orders passed by RERA often do not account for the expenses incurred by flat purchasers, including GST, stamp duty, registration, and brokerage, which results in an unfair advantage for builders.

The concept of conciliation introduced by MAHARERA (Maharashtra RERA) is seen as a way to give more time to builders to exploit the situation. Furthermore, MAHARERA's stance on car parking spaces is controversial. MAHARERA allows builders to allot car parking spaces, which is seen as a common amenity for all flat purchasers. This practice is not in line with several High Court and Supreme Court judgments, which have ruled that car parking spaces should be available to all residents without additional charges.

There is a clear need for accountability and reform in the RERA framework. Despite India's independence in 1947, the administration of property conveyance remains inefficient due to legal loopholes. One suggested reform is to immediately file criminal cases against builders who fail to provide timely possession and execute conveyance within the stipulated time. Another proposal is to require builders to sell 10% of their flats only after executing the conveyance and providing an occupation certificate to all flat purchasers. This would put significant pressure on builders to fulfill their obligations.

Additionally, each agreement should include a one-page section detailing the promoter's background, including any past failures in providing conveyance or delays in possession. This information should be uploaded to the RERA departmental website to inform potential buyers. The observations made by the Supreme Court bench highlight the failure of RERA to achieve its intended purpose. The court expressed extreme disappointment with RERA's performance and suggested that RERA in each state should be headed by a retired High Court judge rather than a bureaucrat. The limitations of bureaucrats in ensuring accountability and legal expertise are well-known.

In conclusion, the Supreme Court's criticism of RERA underscores the urgent need for reforms to protect the interests of flat purchasers and ensure transparency and efficiency in the real estate sector. The implementation of these reforms could significantly improve the functioning of RERA and restore public trust in the regulatory authority.