RERA Authorities – An urgent need for course correction
On 1st May 2020, the Real Estate (Regulation and Development) Act, 2016 (RERA) completed four years since its enactment, and three years since all the provisions of the Act came into force.
Three years is a decent time horizon to reflect on the functioning of an Authority, set up under a regulatory law, at-least to gauze the direction, desire, and determination, with which it has taken on the mantle prescribed for it under the law.
From the homebuyer’s perspective, at the very outset, the feeling is of disgust, disdain and deceit. The conversations amongst homebuyers is RERA, a law enacted to empower buyers has been ingeniously turned around into a law, for the builders – of the builders – by the builders, ably assisted by the Regulatory Authorities. A peek into various social media exchanges would drive home the discomfort through which the homebuyers are grappling in the hands of the builder – authority nexus.
Beginning with the rules under the Act being illegally diluted by some major States (primarily leaving out ongoing projects); delays in establishment of Authorities / Appellate Tribunals / Adjudicating Officers; incomplete hosting of websites with little or no project information; and others, there is now an added burden of dealing with regulatory lethargy.
The most obvious of which are the casual implementation of important provisions of the Act, namely – notifying quarterly project updates; guaranteeing maintenance of 70% project funds in a separate account; ensuring facilities and amenities as promised; safeguarding quality of construction; hearing of consumer grievances; and most importantly execution of orders.
One alibi, being touted by the Authorities is ‘we don’t have enough powers’. This is the most bizarre argument made by any Regulatory Authority across any sector in India. The same powers are available to most regulatory authorities, cutting across sectors, namely – to impose penalties, and to get orders executed for recoveries as arrears of land revenue. In-fact this is also invoked by the judiciary in cases of recoveries from delinquents. The truth is, there is utter lack of interest to truly and forcefully implement the Act.
Conversely, there are other trivial things keeping some Authorities engaged, obviously by arrogating powers not provided under the Act. One Authority came up with an idea of Self-Regulatory Mechanism (SRM) for builders; one wonders, if builders were to self-regulate then why the need for RERA. Furthermore, if self-regulation worked than would the situation have come to such a pass. Another Authority came up with the idea of ‘grading’ real estate projects, obviously to help offtake sales for builders.
All limits of quasi-judicial decorum were crossed when RERA Authorities of all States joined hands to form a pan India Association. Have we ever heard of any association formed by judicial or quasi-judicial bodies?
Recently there was a news report that this Association of Authorities, would pursue Reserve Bank of India (RBI) for loan restructuring for builders. It is strange, if not suspicious, to see Authorities trying to facilitate fund management for builders.
Indiscriminate extension of project registration has become a norm rather than an exception. Recently, under the pretext of covid-19, most Authorities have given six to nine months’ blanket extension to all projects, beyond one year provided under the Act. This was done to purge builders of any liability towards interest, compensation and penalty, for delays.
The homebuyers’ community is losing trust on RERA Authorities, which are facilitating the demise of RERA, longingly sought by builders. However, we hope, the Government and particularly the Prime Minister, will take cognizance of these practices, and take concrete steps to bring the Authorities back on track. One such first step could be an immediate audit, either by the CAG or any other competent authority, of the functions of the Regulatory Authorities vis-à-vis responsibilities specified under the Act.
The time, energy, focus and resources wasted by the Authorities in doing the non-essentials aforesaid, could have been more fruitfully utilized for spirited implementation of RERA.
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