Author- Mustafa Saifee
Editor- Ms. Ritanshi Jain
ABSTRACT
Development Act (RERA) 2016 could be a revolutionary Act in the history of the Indian construction sector. This Act applies to under-construction as well as new projects. Residential and commercial projects also. Real estate agents or brokers roles are also included in the purview of this Real Estate sector is one of the top contributors to a country's GDP and employment creation. In spite of being such an important part of the economy, this sector has remained unregulated. This sector is controlled and regulated at the local government’s level with every state government having its own set of rules and regulations for real estate development. The customer’s protection and satisfaction is getting from bad to worse. It has led to big hue and cry making urgent need for a unified regulatory legal framework to protect customer’s interest. The scope of the Act covers all parties to a real estate Sector. The purpose is to ensure greater accountability and transparency in the system. Furthermore it absolutely was introduced to safeguard home buyers interests and additionally to spice up investment within the Real Estate sector.
1. Introduction
“Real Estate cannot be lost or neither Stolen, nor can it be carried away. Purchased with common Sense, Paid for in full and Managed with Reasonable Care, it is about the safest investment in the world”
Real Estate is always related to Immovable property, Real Estate is a property consisting of land and the buildings along with its natural resources such as crops, minerals or water, an interest vested in this also an item of real property, more generally buildings or housing in general. The business of real estate is the profession of buying, selling, or renting land, buildings, or housing. Real Estate is a business not a profession and Consumer or Buyer is the king in the real estate sector. Globalization has reached the local and non-tradable areas of the real estate sector. It has increasingly involved the internationalization of the service sector, manufacturing sector and various other sub-sectors of the real estate industry have been enthusiastic participants in the global surge. Builders, Brokerage firms, consulting and service firms, real estate financing firms and investors have extended their area of operations beyond the local market to the world wide level. Several factors have led to this transformation of the industry like Technological changes, Liberalization of business licensing, taxation and property ownership regulations in some of the largest emerging real estate markets in the world. In the global environment, the key to success for owners, investors and users of real estate is to really understand the local real estate markets. Whether they are investing billions around the planet or millions in a few countries, owners, investors and users should have a thorough knowledge of the markets in which they choose to invest or operate their funds.
2. Meaning of Real Estate Sector
Real estate is a class of ‘Real property’ along with any permanent improvements attached to the land whether natural or man-made including water, trees, minerals, buildings, houses, fences and bridges. It differs from personal property which are things not permanently attached to the land such as vehicles, boats, jewelry, furniture, and farm equipment. There are five main categories of real estate which are residential, commercial, industrial, raw land, and special use. You can invest in real estate directly by purchasing a home, rental property and other property or indirectly through a real estate investment trust (REIT).
3. Features of RERA
Salient Features of the Real Estate (Regulation and Development) Act, 2016 are:-
● To establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector.
● Ensure sale of plots, apartments of the buildings, as the case may be, or sale of real estate projects, in an efficient and transparent manner.
● To protect the interest of consumers in the real estate sector.
● Establishing an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority (RERA).
● To regulate transactions between buyers and promoters of residential real estate projects.
● To establish state level regulatory authorities called Real Estate Regulatory Authorities (RERAs).
● Residential real estate projects with some exceptions need to be registered with RERAs.
● Promoters cannot book or offer these projects for sale without registering them and the Real estate agents dealing in these projects also need to register with RERAs.
● During Registration the promoters must upload details of the project on the website of the RERA. These include the site and layout plan, and schedule for completion of the real estate project.
● Amount collected from buyers for a project must be maintained in a separate bank account and must only be used for construction of that project. The state government can from time to time alter this amount.
● Right to Legal Representation on behalf of Client by Company Secretaries or chartered accountants or cost accountants or legal practitioners.
● Imposes stringent penalties on promoters, real estate agents and also prescribes imprisonment for them.
4. Need of RERA
The real need of RERA was the identification of the possibility of transparency within the Indian market of real estate. It was to ensure that the sector did not have any more instances where the buyer is not clear on availing remedy or is not aware with reference to the steps that a person needs to take in order to avail the following remedies. Thus working upon the idea of the same, the procedural idea has been proposed to standardize all transactions that involve the sector of real estate. Further it also goes on to indicate the buyer and promoter shall receive equal protection under the act, which is considerably the idea of bringing the buyer and seller on a transparent platform. Furthermore the indication by the various courts have been to highlight that this particular bill is of such a nature that it tends to imply a sense of creating orderly and healthy growth of the industry. Moving on to the identification of the crux of the idea of RERA it can also be attributed to an extent to the need of the common person and the small developers. As has been interpreted by the Supreme Court, the need to protect a sense of development within a country is a system where the development is not hindered in lieu of the concentration of rights in one particular entity and there is uniform distribution of respective resources within all. This particular interpretation in terms of RERA can in furtherance point to the fact that through RERA there is a need to ensure that every particular part of the strata receives the benefit of equality and every particular sector receives the benefit of being able to develop. This it makes sure by establishing the act and it tries to bring to light a sense of equality. This should ideally be the interpretation of the RERA in today’s context although to what extent can one identify the success in the interpretation is yet to be observed However in furtherance of the same the basic need behind RERA is given above and ideally the problems that RERA proposes are given above. It is thus the basic need that RERA is here to serve.
5. Objectives of RERA
The objects and reasons for which the Act has been framed are:
● To ensure accountability towards Allottees and protect their interest.
● To infuse transparency, ensure fair-play and reduce frauds & delays.
● To introduce professionalism and pan India standardization.
● To establish symmetry of information between the promoter and Allottees.
● To impose certain responsibilities on both promoters and Allottees.
● To establish a regulatory oversight mechanism to enforce contracts.
● To establish a fast- track dispute resolution mechanism.
● To promote good governance in this sector this creates investors Confidence.
6. Laws governing Real Estate Sector before RERA
There are various National and local Laws which can indirectly or indirectly deal with Real Estate Sector in India some of them are:
● The Indian Contract Act, 1872.
● The Transfer of Property Act, 1882.
● The Urban Land (Ceiling & Regulation) Act, 1976.
● The Indian Registration Act, 1908
● The Consumer Protection Act, 1986.
● The Land Acquisition Act, 1894.
● The Specific Relief Act, 1963.
● The Societies Registration Act, 1860.
● The Indian Stamp Act, 1899.
● The Indian Evidence Act, 1872.
● The Income Tax Act, 1961.
● The Arbitration and Conciliation Act, 1996.
● The Wealth Tax Act, 1961.
● The Benami Property Transaction Act, 1988.
● The Competition Act 2002.
7. Effect or Impact of RERA on Indian Real Estate Sector
● Increased the cost of the project.
● Tight liquidity.
● Rise in the cost of capital.
● Consolidation.
● Increase in time for launching of projects.
Initially a lot of work is to be done to get the existing and new project registered. Details such as status of each project which was executed in the last 5 years, promoter details and detailed execution plans etc. needs to be prepared. With the advent of RERA a specialized forums such as the State Real Estate Regulatory Authority and the state Real Estate Appellate Tribunal will be established for the resolution of disputes pertaining to home buying and the aggrieved party will have no recourse to other consumer forums and civil courts on such matters. While the RERA sets the groundwork for fast-tracking dispute resolution, the litmus test for its success will depend on the timely setting up of these new dispute resolution bodies and how these disputes are resolved expeditiously with a degree of finality.
8. Real Estate (Regulatory and Development) Act, 2016 [RERA]
In May 2008 Ministry of Housing and Urban Poverty Alleviation (HUPA) first prepared a Concept Paper on regulation of the real estate sector and a model law for legislation by States/UTs. In 2011 the Conference of Ministers of Housing suggested a central law for regulation of the real estate sector. In July, 2011 the Ministry of Law & Justice suggested central legislation for regulation of the Real Estate Sector. In June, 2013 Union Cabinet approved the Real Estate Bill, 2013. In August, 2013 Real Estate Bill was introduced in Rajya Sabha and was referred to the Standing Committee. In February 2014 the Standing Committee Report was laid on the Tables of both Houses of Parliament. In February 2014 Attorney General upheld the validity of central law for regulation of the Real Estate sector. In April 2015 Union Cabinet approved official amendments based on recommendations of the Standing Committee. In May 2015 Matter referred to the Select Committee of Rajya Sabha. In July 2015 Report of Select Committee laid on tabled in Rajya Sabha. In 2015 Real Estate Bill, 2015 incorporating several modifications based on Select Committee report and stakeholder consultations were approved by the Union Cabinet March 2016. The Real Estate (Regulation & Development) Bill, 2016 passed by Rajya Sabha Real Estate (Regulation and Development) Act, 2016 (RERA). In March 2016 Lok Sabha passed the Bill as passed by Rajya Sabha. On 25 March 2016 the President gave assent to the Bill. On 15th April 2016 (59 Sections) of the Act were notified making them effective from May1. In 2016 enabling preparation of Real Estate Rules, setting up of Regulatory Authorities and other infrastructure, On 19 April 2017 Remaining (32 Sections) of the Act notified making them effective from May 1st this year requiring registration of projects within three months from tomorrow, 1 May, 2017 New era begins for development of real estate sector in an atmosphere of investor confidence Different States and Union Territories have notified their rules on different dates and some of the States are yet to notify the rules. Be it enacted by parliament in the sixty-seventh year of the Republic of India. It extends to the whole of India. It shall come into force on such date as the Central Government may, by notification in the official Gazette. An Act to establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure sale of plots, apartments or buildings, as the case may be or sale of real estate projects in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressed and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating officer and for matters connected therewith or incidental thereto. It aims to protect the rights and interests of consumers and promote uniformity and standardization of business practices and transactions in the real estate sector. It can balance the interests of consumers and promoters by imposing certain responsibilities on both. It seeks to establish symmetry of information between the promoters and purchasers and transparency of contractual conditions which set minimum standards of accountability and a fast-track dispute resolution mechanism.This Act was passed by the Central Government in pursuant to which respective State Governments (“SG”) and Union Territories (‘UT”) are required to notify their own Rules which would be in the lines of the Central Act and accordingly administer their own State Rules. Accordingly, every State governments and Union Territory are to required to promulgate their own Real Estate Rules which would be based on the lines of the central Real Estate (Regulation and Development) Act, 2016 and establish a Real Estate Regulatory Authority (“RERA”) pursuant to the Rules which will administer the respective Real Estate Rules of the State or UT. State Governments and UTs were required to notify and enforce RERA by 1st May 2017 which was the deadline set by the Central Government. But a few State Governments have missed the deadline of 1st May 2017. It is expected that most of the State Governments would meet the second deadline of 31st July 2017 by which the ongoing projects are to be registered with RERA. The RERA Act 2016 has total 92 sections and divided into 10 chapters:
I. The Real Estate Regulatory Authority Section 20 to 40
It can be defined in chapter 5, from [Section 20 to Section 40] of RERA Act, 2016 and in chapter The Appropriate government means the (State government) Shall within a period of one year after coming into force of this act by notification in official gazette establish a Real Estate Regulatory Authority to exercise power conferred on it and perform the function assigned to it under this Act. The authority shall consist of a Chairperson and not less than two whole time members of the authority were appointed by the state government. The Chairperson and members shall hold office for a term not exceeding five year or until they attain the age of sixty five year whichever is earlier. The chairperson and other members of the authority shall be appointed by the state government on the recommendation of a selection committee consisting of chief justice of the High court or his nominee, the chairperson persons having adequate knowledge and professional experience in urban development housing, Real Estate development infrastructure, economics, technical experts from fields of planning, law, commerce, accountancy, industry, management, Social service, public affairs at least twenty years and fifteen year in case of other members. The salary and allowances payable to chairperson is equivalent to the High court judge, the other terms and conditions of services, salary and allowances to other full time members are equivalent to a principal secretary to the state government. The chairperson shall have all the power of general superintendence and directions in the conduct of the affairs of authority.
II. Central Advisory Council for Real Estate Housing Section 41 & 42
It can be defined in chapter 4 in Section 41 & 42 of RERA Act, 2016. The central government may by notification establish a central advisory council it consist of representatives of the Ministry of Finance, ministry of Industry and commerce, ministry of consumers affairs, corporate affairs, law and justice, and Ministry of Housing & urban development, NitiAayog, and National Housing Bank and five representatives of state government to be selected by rotation, five representatives of Real Estate Regulatory authority to be selected. The council shall also consist of not more than ten members to represent the interest of real estate industry, consumers, and Real Estate Agent, construction laborers, academic and research bodies in the real estate sector and Non government organization. The Function of the council is to advise and recommend the central government.
III. The Real Estate Appellate Tribunal Section 43 to 58
It can be defined in chapter 7 in section 43 to 58 in RERA Act, 2016. The state government shall within a period of one year from the date of coming into force of this Act by notification establish a Real Estate Appellate Tribunal. The state government may also establish one or more benches of the Appellate Tribunal for various jurisdictions in the state. It shall consist of a chairperson and not less than two whole time members, at least one judicial member and one administrative to technical member. The salary, allowances, and other terms and conditions for chairperson is equal to a High court judge and principal secretary of state government. The chairperson and other members of the tribunal shall hold office not exceeding five years or until not at the age of sixty five years whichever is earlier. The appeal against the order of the real estate regulatory authority was challenged before the Real estate appellate tribunal. The chairperson and other members of the appellate tribunal may be removed from his office by the state government in consultation with the chief justice of the High Court on grounds of insolvency, and mentally incapable. Qualification to become a chairperson of the tribunal is or has been a judge of High court and qualification for other members is to become hold judicial office in the territory of India for at least fifteen years or has been a member of the Indian legal service or has been an advocate for at least twenty years with experience in dealing with real estate matters, or held the post of additional Secretary of the state.
IV. Offences, Penalties, and Adjudication in Real Estate matters Section 59 to 72
A. Offence-wise Penalties for Promoters
S.N0
Offence
Penalty
1.
Non-registration of a project
10% of the estimated cost of real estate project
2.
Not obeying orders or direction in connection with the above offence
Imprisonment up to 3 years with an or without fine being 10% of the estimated cost of real estate project
3.
Providing false information etc.
5% of the estimated cost of real estate project
4.
Other contravention
5% of the estimated cost of real estate project
5.
Contravention of any order of the RERA
Penalty for every day of defaults which may cumulatively extend up to 5% of the estimated cost of real estate project
6.
Contravention of the orders or direction of the appellate tribunal
Imprisonment up to 3 years with or without fine which may cumulatively up to 5% of estimated cost of real estate project.
B. Offence-wise Penalties for Real Estate Agents
S.N0
Offences
Penalties
1.
Contravention of the applicable provisions of the Act
Rs. 10,000 per day of defaults which may extend up to 5% of the cost of the property whose sale or purchase was facilitated by him
2.
Contravention of the orders or direction of the RERA
Penalty on a daily basis which may cumulatively extend up to 5% of the estimated cost of the property whose sale or purchase was facilitated by the agent
3.
Contravention of the orders or direction of the appellate tribunal
Imprisonment up to 1 year without fine which may extend up to 10% of estimated cost of project.
C. Offence-wise Penalties for Allottees
S.N0.
Offences
Penalties
1.
Contravention of any order of the RERA
Penalty for the period during which defaults continues which may cumulatively extend up to 5% of the apartment or building cost
2.
Contravention of the orders or direction of the appellate tribunal
Imprisonment up to 1 year with or without fine for every day during which such defaults continues, which may cumulatively extend up to 5% of the apartments or building cost.
9. Case Laws and Judgments on RERA
I. One-Sided Agreements
i. Belaire Owners’ Association v. DLF Limited, HUDA & Ors [2010]
In this case, the CCI (Competition Commission of India) extensively dealt with the issue of abuse of dominant position and one-sided development agreements. In the case, the CCI made some noteworthy observations pertaining to one sided development agreements:
● That DLF had to malpractice in the agreement.
● That unfair conditions were imposed on the buyer through the Provisional Booking agreement, which is signed by the buyer after having paid substantial costs, thereby, leaving no option to the buyer to object to loop-sided provisions of the agreement.
● DLF’s right to change the layout plan without consent of a consumers, DLF’s unilateral power to make changes in agreement
● There wasevidence of unequal bargaining power between the parties and stated that the impunity with which these clauses have been imposed, the brutal disregard to consumer right that has been displayed in its action of cancelling allotments and forfeiting deposits and the deliberate strategy. Buyers in the dark about the eventual shape, size, and location etc. of the apartment cannot be termed as fair.
DLF was held liable for abuse of dominant position under the Competition Act, 2002 and was slapped with a penalty of Rs. 630 crore. The CCI in the case also directed DLF to suitably modify conditions imposed on its buyers. However, in appeal COMPAT (Competition Appellate Tribunal) stayed CCI’s order regarding modification of the terms of agreement but barred DLF from implementation of the impugned agreement.
ii. Mr.PankajAgrawal Vs DLF Gurgaon Home Developers Private Limited [2010]
This is also an essential judgment of CCI which aids in the defenses available to a buyer aggrieved with one-sided development agreements and change in layout plans by the builder.
● In this case, the CCI the development agreement mentioning about change in its construction plans without giving any option to the apartment buyers and termed it as abusive. CCI opined that just because there was an increase in some towers and decrease in other towers does not balance the effect which the apartment buyer has to go through. CCI stated that for buyers who have booked apartments in the towers where the number of floors have increased, the conduct of the Opposite Party was unfair.
● That when consumers invest in a particular project, they ought to know the final structure of the apartment. It is, therefore, quite clear that the conduct of the Opposite Party in making additions to the number of floors beyond the number intimated to the apartment Allottees amounts to abuse of dominant position.
That demanding additional payments on account of External Development Charges/Infrastructure Development Charges etc. on the increased super area of 2630 sq. ft. also amounted to abuse of dominant position as the buyers were taken by surprise and they had no option but to succumb to the pressures of the Opposite Party.
II. Delay in Delivery of possession of Flats
i. Brig. (Retd.) KamalSood Vs M/S. DLF Universal Ltd. [2014]
It can causing delay due to delay in governmental permissions, such as, approval of zoning plan, layout plan and schematic building plan. This case raised some interesting issues before the National Consumer Dispute Redressal Commission (NCDRC) for instance:
⮚ Can a builder give a advertisement promising delivery of possession of the constructed flat to the consumer within the stipulated time, and, subsequently, on his failure, governmental permissions, such as, approval of zoning plan, layout plan and schematic building plan, were not given, the delay in construction should not be the ground for grant of compensation to the consumer.
⮚ Secondly, whether the consumer should suffer by paying escalation cost due to such delay.
The NCDRC observed that the aforesaid practices were unfair trade practice on the part of the builder to collect money from the prospective buyers without obtaining the required permissions such as zoning plan, layout plan and schematic building plan. NCDRC stated that it was the duty of the builder to obtain the requisite permissions or sanctions such as sanction for construction, etc., in the first instance, and, thereafter, recover the consideration money from the purchaser of the flat/buildings.Secondly, in such acase, if there is any express promise that the premises would be delivered within the stipulated time, and, if not done so escalation cost is required to be borne by the builder.
ii. Shri Yogesh Sharma &Anr. Vs M/S Unitech Limited [1993]
The NCDRC in this case observed that the builder ought not to have accepted money and entered into agreement with the buyers without approval of the building plans by GNIDA (Greater Noida Development Authority). If the opposite party chose to accept money from the flat buyers and enter into agreements, undertaking to give possession within a particular time frame, without having possession of the land and without approval of the building plans, it is only itself to blame for a situation in which the construction got delayed on account of the delay in approval of building plans and physical delivery of the land to it on the spot.
iii. VishalArya v. Unitech Limited
In this case, the Complainant was aggrieved by the inordinate delay caused in completion and possession of his flat booked with Unitech. The Complainant in the case had deposited the entire amount of flat with Unitech and according to the Agreement the possession of flat was assured by March, 2009. However, the construction of the flat had not yet even started. Aggrieved by this, the Complainant prayed either for immediate delivery of flat or refund of the entire amount along with interest and litigation charges. In reply, Unitech contended that the delay was caused by force majeure circumstances which were beyond its control. In the case, Commission was of the view that there was a sheer deficiency in the services of Unitech and they were only enjoying the fruits of deposited amount and on account of mental agony suffered by the buyers, the Commission directed Unitech to refund the entire amount along with interest @10% p.a. and also to pay Rs. 2.50 lakh as compensation to the Complainant for mental agony.
In this case, the builder took the defence of shortage of labour etc. due to commonwealth games in 2010 for delay in delivery of project. The NCDRC while rejecting the builder’s response observed that the plea was not acceptable for the reason that Buyer’s Agreement was of the year 2006 to 2010 and if the opposite parties intended to comply with the terms of agreement, they would have raised substantial construction before commonwealth games. NCRDC further remarked that till date, the possession of the apartments had not been handed over to the complainants who clearly indicated the deliberate delay and negligence on the part of the builder and the builder could not be permitted to hide behind a bogus plea of force majeure or exceptions provided in clause 9.b of the Buyer’s Agreement.
III. Compensation payable on account of delay in delivery of Possession
i. Ghaziabad Development Authority v. Balbir Singh [19993]
The Supreme Court held that paying compensation and quantum of compensation in the event of delay in delivery of possession of flat/apartment. The Court stated that “However, the power to and duty to award compensation does not mean that irrespective of facts of the case compensation can be awarded in all matters at a uniform rate of 18% per annum. As seen above what is being awarded is compensation i.e. a recompense for the loss or injury. It therefore necessarily has to be based on a finding of loss or injury and has to correlate with the amount of loss or injury. Thus the Forum or the Commission must determine that there has been deficiency in service which has resulted in loss or injury. No hard and fast rule can be laid down, however a few examples would be where an allotment is made, price is received but possession is not given within the period set out in the brochure.Along with recompensing the loss the Commission/Forum may also compensate for harassment/injury both mental and physical. The aspect of awarding compensation was extensively dealt with by the NCDRC in the Yogesh Sharma case (supra), wherein the Commission observed that no sensible person will volunteer to accept compensation constituting about 2-3% of his investment in case of delay on the part of the contractor, when he is made to pay 18% compound interest if there is delay on his part in making payment. Such a practice constituted unfair trade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder.
ii. Satish Kumar Pandey&Anr. V. Unitech Ltd.,[2014]
It condemned the practice of builder charging compound interest @ 18% per annum in the event of the delay on the part of the buyer in making payment to him but seeks to pay less than 3% per annum of the capital investment, in case he does not honour his part of the contract by defaulting in giving timely possession of the flat to the buyer. Such a practice, in my view, constitutes unfair trade practice within the meaning of Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practice for the purpose of selling the product of the builder. Also read Property Dispute – Builder not giving me refund against cancellation.
IV. Disadvantages due to delay in delivery of possession of Flats
Bhattacharjee Vs Delhi Development Authority [1996]
In this case, the Delhi High Court shed light on the disadvantages of delay in delivery of possession the Court stated that by delay in delivery of possession, the-interest on investment made in the flats, supervision charges, watch and ward administrative overheads expenses go on mounting up. The land cost also keeps on increasing in view of the inflationary tendencies. If possession is not taken over by the Allottees then the cost price escalates and at the same time the flats lying ready depreciate and deteriorate by natural factors. If they are occupied, then they are maintained by the occupants and otherwise inevitable wear and tear for want of maintenance is avoided.
V. Alterations in the project
PankajAgarwal&Anr. Vs DLF Gurgaon Home Developers,
The builder had raised floors without any intimation to the home buyers. On complaint of the alleged act, CCI was of the view that the builder held a position of dominance in the relevant market of services and made a advisory remark that it was the duty of DLF Developers to disclose that it proposed to increase the number of floors and apartments, so that the Allottees could have taken valid objections.
10. Conclusion and Suggestions
The Act intends to increase transparency and accountability in the real estate sector. It provides various mechanisms to facilitate and regulate the transactions in commercial as well as residential projects and ensures timely project completion by the promoters. However this would happen only if there is an efficient implementation by the State Government. Therefore, the most important challenge is to successfully establish the Real Estate Regulatory Authority in all the states within the time span of one year. Apart from the above-mentioned loopholes still there is a huge scope for the amendment. E.g.: The interests of other stakeholders (apart from the Allottees) in the real estate sector are not addressed. In the end the enactment of this Act is a landmark development in the real estate sector. It will promote well-planned urban real estate development and simultaneously protect the interest of innocent consumers who invest their hard earned money. RERA has also had a negative Impact on the profit margin of real estate developers. The idea of RERA to cleanse and standardize the Real Estate Market but this cannot be achieved to its perfection without the considerable thought and further respect to the procedure and keeping in the principles of implementations. Further the RERA as an act has beautiful objectives for the consumer but in terms of the promoter it remains a moot question that is yet to receive any intimate answers. Now the Indian real estate conglomerates are counseled to focus on consumer contentment. The sector is no more controlled by a developer putting purchaser anticipations offstage and carrying on business at his own engaging willpower. Below some suggestions are given how to improve in Indian Real Estate sector or RERA and its implementation:
● States should refrain from introducing exceptions to the definition of ongoing projects.
● Make government agencies accountable for the delay in granting approvals.
● Single-window disbursal system was introduced for all regulatory approvals.
● RERA Provisions for punishments of violations in the form of imprisonment and fine should be kept intact in all state laws.
● Create a uniform payment schedule for home buyers across states.
● State laws must not dilute ‘the proportional withdrawal’ clause for an escrow account.
● Mechanism required monitoring fund transfer from an escrow account for land acquisition.
● Set a timeline for Allottees to communicate opinions on layout changes.
● Clearly define ‘structural defects’ and fix liability on to the developer.
● The central government and state governments must collectively resolve any future conflict out of RERA implementation.
● Clearly define home buyers in the class of creditors to avoid conflict between IBC and RERA.
● Set up IT Infrastructure.
● Create a template for submitting project related information.
● Introduce land title insurance to increase flow of funds in the sector.
● Few sections of this act should be revised for considering customer’s futures as well as builder’s or developer’s convenience.
REFERENCES
I. BOOK
● Law Relating to RERA – Taxman.
II. BARE ACTS
● The Real Estate (Regulation and Development) Act, 2016.
● States and Union Territories Real Estate (Regulation and Development) Rules.
III. RESEARCH REPORTS
● CREDAI on Real Estate.
● FICCI on Real Estate.
● Knight Frank on Indian Real Estate and RERA.
● Care Rating Professional Risk opinion on RERA 2016.
IV. RESEARCH JOURNALS
● Indian Journal of applied Research.
● IOSR- JBM.
● ISSN- IJBMI IJRAR, IRJET.
V. INTERNET
● Wikipedia.
● www.vakil.No.1.Com.
● www.mouha.gov.in .
● www.Academia.edu.in
● www.Projectguru.in.
● www.Makaan.com.
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