Has RERA Really Given Homebuyers The Much-Needed Freedom?

We are celebrating Independence Day today. But has this Independence Day brought real independence for the homebuyers from the pain and sufferings? Can we affirm that the Real Estate (Regulation and Development) Act, 2016 (RERA) has facilitated complete freedom for the homebuyers, from the tension and worries which they were facing for years due to their life savings getting stuck in several delayed projects?

We are now into the third year since RERA was passed by the Parliament in March 2016 and second year since RERA came into force from May 2017. Though, it was a journey well begun, there were roadblocks created in implementation of RERA since the beginning. States diluted the RERA rules led by Uttar Pradesh and Maharashtra. This was later followed by Haryana, Karnataka, Tamil Nadu, Punjab, Telangana, etc.

In complete defiance of the order of Bombay High Court in December 2017 (which upheld the constitutional validity of RERA), Maharashtra is yet to revise its state rules. Web portals in most states are only partially ready thus not serving much purpose.

Though RERA clearly provided for setting up authorities (Real Estate Regulatory Authorities and Real Estate Appellate Tribunals) within one year i.e. by April 30, 2017, many states are still continuing with interim authorities. Rajasthan High Court, in its recent order, has stayed the order passed by Rajasthan RERA as the same had been passed by the interim authorities, the ground on which it was challenged in the writ petition. In many cases, despite receiving favourable orders from RERA, it is reported that homebuyers are facing issues in its execution.

While homebuyers were grappling with aforementioned issues, another more serious and dangerous issue cropped up which has the potential to render RERA completely redundant. West Bengal has enacted its own state legislation by the name of West Bengal Housing Industry Regulation Act, 2017 (WBHIRA) and has thus refused to implement RERA in West Bengal. If West Bengal is successful in implementing WBHIRA, it may open the floodgates for other states to follow suit rendering RERA completely redundant.

WBHIRA was passed in July 2017 and it is really sad and unfortunate that ministry of housing and urban affairs (MoHUA) has done nothing to nip the issue in the bud. The matter was raised by Forum For People’s Collective Efforts (FPCE) in the Central Advisory Council (CAC) (constituted to ensure RERA’s timely and effective implementation) in its meeting held on May 14. A sub-committee was formed which would have visited Kolkata to persuade West Bengal government to withdraw WBHIRA and implement RERA. Later, the proposed sub-committee was not notified.

Despite RERA coming into force almost a year ago, real estate is undergoing changes but at a very slow pace. Developers have definitely become more transparent in their dealings and are also more considerate towards dispute resolution at initial stages for fear of being dragged to RERA. Justice delivery time has been significantly reduced and homebuyers are getting orders within three-four months from RERA that too without engaging lawyers in many cases. Even after appeals to RERA tribunal and to respective high courts, the matter is not getting prolonged beyond 12 months. This is a real big achievement of RERA in my opinion which was not possible in any other judicial platform earlier.

With regard to ongoing cases, there is a demand from buyers of Unitech Ltd for forensic audit of the company and takeover of Unitech Ltd by the government, in our opinion, both the demands should be accepted forthwith. In the Jaypee matter, it is again a long and agonising wait for 90 days. I strongly feel that homebuyers should be made primary secured creditors to ensure that interest of homebuyers are protected even in case of liquidation.

Having raised this pertinent issue, we must remember, that we got Independence after several years of struggle. Similarly, for any new law to become fully functional and impactful, will also be a time taking process.

(The author is president, Forum For People’s Collective Efforts and member, Central Advisory Council, RERA, ministry of housing and urban affairs, government of India)