The skewed RERA Act in India and the need for a uniform pro-consumer legislation across the country-Mr.Aditya Upadhyay-A News Reprot

The Government of India’s game changing legislation, Real Estate (Regulation & Development) Act- commonly referred to as RERA Act is a game changing legislation created to bring a set of rules and regulations in the Real Estate Sector. While the fight to bring in transparency, accountability and a strong pro-consumer legislation has been pending for 8 years it must be noted that the strong Builder lobby has tried to either weaken the provisions or to stall the introduction of a bill in parliament and its subsequent passage altogether.

It was blessing in disguise that the bill was referred to Select Committee on 6thMay 2015. The committee visited 5 cities for consultation with stakeholders and sought their suggestions. The committee chaired by Late Shri Anil M Dave and comprised members like Hon’ble Rajeev Chandrasekhar, were known for their consumer-friendly stance. It was only because of members like them that consumer friendly suggestions like

  1. Max period of extension that may be granted to any project will not exceed 12 months.
  2. Structural defect liability extended to 5 years from 2 years.
  3. No change in sanctioned plan – common areas-  etc without written consent of allottees
  4. After execution of Agreement, no charge can be created by the builder on sold apartments and if he creates such charge or hypothecates/mortgages –  then it will not affect the rights and interest of allottees – were inserted in the final RERA. The passage of RERA from both houses of parliament last year raised hopes of millions of home buyers that they will get justice and their suffering will come to an end.

The central Ministry of Housing and Urban Poverty Alleviation notified draft rules for Union Territories without legislatures on 24th June’2016. We, found draft Rules full of glaring loopholes and approached Hon’ble MP Shri Rajeev Chandrasekhar to apprise him of such loopholes and take his help for taking our delegation to Hon’ble Minister Shri Venkaiah Naidu (now Vice President of India) and Shri Rao Inderjit Singh to bring such loopholes to their notice so that it can be taken care of in final notification. Hon’ble MP Shri Rajeev Chandrasekhar was kind enough and not only gave us patient hearing but also took our delegation to meet both the Hon’ble Ministers. This exercise resulted in Housing Ministry coming out with perfect undiluted Real Estate Rules for Union Territories without legislatures which were expected to serve as model Rules for other states.

But once again, the sinister design of builders in connivance with State Governments is at naked display and states are either not implementing RERA properly or diluting their Real Estate Rules to favour developers. As mandated under RERA, all State Governments’ were required to frame their Real Estate Rules within six months and appoint Real Estate Regulator/Appellate Authority within one year from the time Act came into force. But till today only 24 states including Union Territories have notified their final Real Estate Rules, only six states have set up Permanent Regulator and their web site. More than 15 states are still continuing with Interim Regulator which as per RERA should not continue beyond 30th April’2017 and thus all their pronouncements may not stand higher courts scrutiny.

Maharashtra and Uttar Pradesh were among first few states to notify their Real Estate Rules but sadly both states diluted their Rules to favour developers. Maharashtra to facilitate developer’s convenience used Completion Certificate and occupation Certificate interchangeably though both have been clearly defined in RERA,- this has allowed registration of the proposed plan, allowed piece meal registration of project and have defined the Ongoing project. Whereas Uttar Pradesh gave a new definition of “Ongoing Projects” and “Common Areas”- besides not giving clarification with regard to the requirement for Ongoing Projects at the time of registration and there also exist lacunae in its compounding clause. Most of the states like Karnataka, Punjab, Andhra Pradesh, Rajasthan, Haryana, Tamil Nadu, Kerala have given new definition to “Ongoing Projects” only with the intention to exclude as many projects as possible from the ambit of RERA. Telangana has crossed all the boundaries by excluding all projects for which building permissions were issued prior to 01st Jan 2017 which implies that “ongoing projects” have been altogether excluded. Goa has not yet notified their Real Estate Rules and contrary to the provisions of RERA have extended the deadline to register ongoing projects till 31st Oct 2017. West Bengal has taken a different route, rather than implementing RERA and has legislated its own Housing Industry Regulation Act’2017. This may create complications for homebuyers and developers alike in the state of West Bengal since the similar central law is in place and under article 254 of The Constitution, the central legislation will always prevail.

The good part is that Housing Ministry has taken cognisance of such dilution by most of the State Governments and the then Housing Minister has written several letters to state chief ministers warning them of public outcry if the provisions are diluted and requesting them to implement RERA in letter and spirit. The issue of dilution was also taken by us from Fight For RERA, and we have written letters to the Prime Minister, Housing Minister and to Chief Ministers of several states like Gujarat, Maharahstra, Haryana, Karnataka and Uttar Pradesh bringing to their notice dilution in favour of developers and requesting for revocation of such diluted rules. It was heartening that Hon’ble MP Shri Rajeev Chandrasekhar is one of the few members of Parliament that took the issue very seriously and has been constantly intervening in favour of consumers.  He has also written to the Karnataka Chief Minister requesting him to revoke diluted provisions of Karnataka Real Estate Rules.

We, Fight For RERA, also made representations to Committee on Sub Ordinate Legislation (COSL) of both Lok Sabha and Rajya Sabha and I met the Chairman of both Committees and apprised them of the issue personally. COSL. Lok Sabha recently tabled its report in Lok Sabha and have admitted dilutions by states. They have mentioned that the Central Government has the power to either amend or revoke diluted provisions of Real Estate Rules notified by states and have also directed the central Government to ensure that RERA is implemented uniformly and in letter and spirit across India. The assurance by new Chief Minister of Uttar Pradesh Hon’ble Shri Yogi Adityanath that he will notify fresh Real Estate Rules for Uttar Pradesh in line with the central rule is welcome announcement and home buyers are eagerly waiting for the new Uttar Pradesh Rules.

The collusion between developers and State Governments render RERA redundant has affected many home-buyers adversely, many who believed RERA would end their misery are fast losing hope. Like any other central legislation, RERA should also be implemented uniformly and in letter and spirit across India. We have to ensure that cases like Unitech, Jaypee, Aliens, Dreamz, etc become things of past and there is no chance of such recurrence in RERA regime.

We, Homebuyers across India in general and Fight For RERA, in particular, are looking up to our Hon’ble MP Shri Rajeev Chandrasekhar to take up the issue with all the Chief Ministers and also with Hon’ble Prime Minister. Strong RERA will ensure consumer’s confidence back in the real estate industry thereby revive sentiments and contribute towards economic growth. Only transparent and accountable real estate industry with vibrant justice delivery system can ensure achievement of Housing for All mission of our Hon’ble Prime Minister.


One thought on “The skewed RERA Act in India and the need for a uniform pro-consumer legislation across the country-Mr.Aditya Upadhyay-A News Reprot

  1. “ONLY TRANSPARENT AND ACCOUNTABLE REAL ESTATE INDUSTRY WITH VIBRANT JUSTICE DELIVERY SYSTEM can ensure achievement of Housing for All mission of our Hon’ble Prime Minister.” (FONT supplied)

    The marked key observation / the implied underlying message, it appears, takes one – back to the proverbial square one OR to the equally familiar- back to the pavilion, after a duck at that . If so, it will be a sad day when to repent that all that “Fight for RERA”, so valiantly fought, has turned out/proved to be a losing (not lost!) battle !

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