September 2019

RERA, A CRITICAL ANALYSIS

K.K. Ramani
Advocate

RERA (or Real Estate Regularity Authority), introduced as a remedy against the rampant malpractices of builders and to safeguard the interests of homebuyers by ensuring the sale of plots, apartments or buildings in an efficient, fair and transparent manner, has had more than two years of operation and it is time to look back and assess the strengths and weaknesses of the legislation in its present form and application. As with any regulatory measure at the nascent stage, particularly in an area like the real estate sector, there were inevitably certain teething problems to be addressed and the effectiveness lies in the way such problems have been dealt with.

 

NOT OPERATIONAL IN ALL STATES

The Central legislation, applicable throughout the country (except the then state of Jammu & Kashmir), did not find an equally enthusiastic response from several states and Union territories which failed to act within the prescribed time in matters of framing rules, setting up the Authorities, creating the website and establishing the Appellate Tribunals in their respective jurisdictions.

 

It is a matter of common knowledge that barring Maharashtra and a few other states, the governments did not abide by the mandate of the Act in framing the Rules in the prescribed time. As conveyed recently by the Centre to the Supreme Court, the process to notify the Rules in Arunachal Pradesh, Meghalaya, Nagaland and Sikkim is still under way. Twenty nine states / UTs have so far set up the Authority and only 22 the Appellate Tribunal. The inaction on the part of several states for a considerably long period of time not only distorted the pan-India nature of the Act, but also deprived the people of those states of the intended benefits, creating unjust differentiation.

 

The Centre needs to be more active in ensuring enforcement of the Act and its timely implementation in the true spirit of the legislation by constant monitoring.

 

LACK OF HARMONY BETWEEN THE ACT AND RULES

RERA, the Central Act, is not uniformly implemented in various states because the rule-making power is vested in the states which have framed rules of varying nature, some even inconsistent with the substantive p

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