AN OVERVIEW OF RERA
Introduction
The RERA Act has been enacted in the year
2016 and was enforced throughout the country in the year 2017. Though it was
drafted with the aid of existing acts such as ‘Maharashtra Flat Owners Act, 1960’, it
was an entirely new perspective towards the real estate legalities. The main
motive was to regulate the involved parties with the law present in the
construction industry. As this was a fresh establishment, the Act was open to
interpretation providing a wide array of legal concepts ranging from technical
to practical difficulties which were unforeseen by the act. RERA has been a
blessing and has opened up a new scope in real estate laws.
After practicing in RERA for 5 + years below are some recommendations: -
1. Compliance
of Agreements: There could be a provision in the RERA Act expressly mentioning
that the various timelines for different kinds of statutory compliances should
be under the prescribed period in the act. Though the Indian Contract Act, 1972
is applicable, this added provision could avoid future disputes and save the
time of parties which is utilized in filing complaints to the authority for
conveyancing, possession dates, etc. Due to the lack of awareness of laws, the
home buyers fail to detect the lop-sidedness of the sale agreements which later
becomes a nuisance in case of disputes. There are instances that many of the
clauses do not match the provisions in the RERA Act and the home buyers sign
the agreements without conducting any basic research.
2. Awareness
in Home Buyers: The home buyers are still of a mind-set that the responsibility of
RERA is only to get the promoters, developers and agents registered in their
database which is accessible to the general public through the web. RERA is an
authority designed to function as a court and has powers to take up matters and
can also pass orders accordingly. RERA can also direct imprisonment and levy
fines on violations of the provisions. At the same time, home buyers shall be
aware that it is their duty to pay all the bills and charges to the promoter in
time as it indirectly causes a delay in the completion of the project and thus
the possession in the longer term.
3. Consistency
throughout the Country: Currently,
there are different Authorities set in different regions in the interest
bifurcate the jurisdictions. As of now, various authorities are interpreting
the act in different manners which may give rise to complications in the
future. There should be just one RERA and no different versions should be
interpreted by different regional authorities. According to the Housing and
Urban Affairs of India Minister Mr. Hardeep Singh Puri, MahaRERA has been
tremendously successful in the implementation of the act. For future stability
and setting benchmarks, there should be consistency in the interpretation of
the act. Detailed guidelines, rules and manuals shall be issued to protect the
Act.
4. More Powers
to the Authority: The Authority passes
orders and judgements involving matters with respect to RERA Act. But the power
of bringing about justice is still the power of courts and not tribunals. The
Authorities and Tribunals are set up only for conclusive solutions based on the
disputes. For the execution of the same, different departments have to be
accessed which could be a lengthy process. Even while applying for various
permissions for the execution of construction, several platforms have to be
approached causing delays in the process making it tedious to get the legal
formalities completed. The RERA Act registered projects shall therefore be the
single-handed window to complete all the legal formalities through the
Authority. This issue can be solved by providing more powers to RERA in
smoothing the overall process.
5. Redevelopment
Projects: Though the Act is specifically enacted for new construction
projects and to eliminate the legal issues faced between the promoter and home
buyers, a redevelopment project is also supposed to be a new project which
could become a part of the RERA Act. The Act does not include any clauses with
respect to redevelopment projects which might include various factors like
arrangement of rental homes for flat owners, tenanted societies and others. As
metro cities like Mumbai are running out of open land areas for development,
re-development projects are in full swing which the RERA Act has not considered
and it shall be the need of the hour. The risks level are going higher in
redevelopment projects as many disputes arise between the society members and
promoters thus leading to a financial loss for both parties.
6. The
solution to Stalled Projects: When
the license of the promoters and developers get revoked or due to any kind of
disputes between the parties, the matter is taken to the authority and the core
project gets neglected. The construction activities get stalled and even after
the redressal is provided, the construction gets ignored in most of the
situations. A provision is required in the act to revive such projects so that
the parcel of land, monies and construction material does not go to waste and
can be reused to provide more options for occupancy to the home buyers.
7. Attractive
Schemes: After enforcement of RERA, promoters and developers have to be a
lot diligent before taking any decision with respect to construction and
promising various dates to RERA as well as to the home buyers. This has
retreated many promoters and developers in investing in new projects and also
has also hampered new innovations and revolutions in the industry. A new
attractive scheme shall be put upon by RERA to keep the promoters confident to
try out their new ventures into the market which in turn shall also boost the
Real Estate Sector indirectly. Every participant is taking defensive decisions
into the industry since enforcement of RERA but the market ought to have
innovations to which, support from RERA is a must. To comply with the declared
dates by the promoters, it is hampering the innovations as the promoters find
too much risk in proposing a new design approach to home buyers.
Conclusion
Overall, RERA has been a boon to the Real Estate administration making
all the norms stricter than the pre-RERA period. The industry has seen
transparency more than ever before and also provides a fit platform for home
buyers to invest in their dream homes. It has brought about discipline in the
market for the parties and including the agents. Few factors like consistency
in the Act throughout the country, modes of execution of orders and judgements,
and application of the Act in different nature of projects shall be amended and
expressly specified accordingly to make the process more refined. As it is a relatively
fresh aspect in the Real Estate, there could be many more grey areas as
mentioned above which the Act needs to specify well in advance. It shall also
be taken care that RERA Act should not contradict Maharashtra Ownership Flats
Act, 1960 (MOFA) in which, the earnest money deposit limit is 10% and 20% of
the total consideration of the home amount respectively. Such contradictions
shall be specified to keep validity of all the clauses in the respective
Acts.
It can be said that RERA Act it is on the right track to meet the motive
of speedy redressal individually to other courts. There has been a remarkable
progress in less than a decade in this field. Although the functioning has been
improving day by day, some refinement and fine tuning is required in the Act
and its execution to take this initiative to perfection. RERA workshops can
also be provided officially to the promoters and agents in the initial phase to
standardize the working of this legal field. Social network has become a strong
medium to reach out to the public and RERA can use various platforms to reach
out to the public which could be through video presentations or written
articles for awareness.
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