RERA,2017
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This article is written by Divya Shikhar Srivastava, a student of Gujarat National Law University.

Abstract

Accentuation of conflicts concerning land acquisitions is an assuming alarming situation. It is in part because of the acceptance related to deficit that has come to existence in the peasantry as the guarantees accorded to them on earlier activities (for rehabilitation and agreement in cases of displacement) because of land acquisition have not been fulfilled yet; on top of it, the repayment quantity has been paltry and abnormal. They had been denied advantages of the meant use of their land as the acquisition authorities, influenced by means of the industry, have been widening the idea of public cause indiscriminately and enriching it at the price of the peasants. In such an environment RERA, 2017 was passed which seeks to bring clarity and fair practices that would protect the interests of buyers and also impose penalties on errant builders.

Introduction to the Issue

In the recent times, there has been a need felt for a regulatory body to deal with the problem of unfair and unregulated practices in construction and infrastructure sector so as to protect the interest of both the buyers and the diligent builders who take up fair practices of dealing. In answer to this raging need, the Government of India passed the Real Estate Regulatory Act, 2017 in the parliament. It is to be noted that RERA, 2017 along with answering to the problems of home buyers, also helps in boosting the real estate sector.

In the last 10 years, many initiatives have seen delays of long periods as much as of 7 years, some projects ran into obstacles even before a brick was laid.  The motives of RERA, 2017 encompass diversion of budget to different initiatives, adjustments in guidelines through government, the surrounding ministry, countrywide inexperienced tribunal and different bodies like the ones involved in the infrastructure development and government transport. 

What is RERA, 2017?

The Real Estate (Regulation and Development) Act, 2017 is an Act of the Parliament of India which provides for the establishment of a Real Estate Regulatory Authority (RERA) in each state for regulating the real estate sector and also to adjudicate through the regulations in its corpus lex. Problems that were in existence before RERA are as follows:-

  • Builders used to decamp and abscond after taking the money from the buyers.
  • Projects were abandoned after their construction.
  • There were long term delays up to 3-5 years.
  • Changes were made in the building without informing the buyer about it.
  • Dishonouring of many T&C that was laid down without any provision for compensation and no explanation for such thing to happen.
  • Poor quality of project execution.
  • Sometimes the builder failed to provide buyers with Occupancy certificates and Completion certificates.

Following rules and regulation now have to be followed under RERA, 2017 for a builder to start and carry on the construction:-

  • Compulsory Registration of new and ongoing projects- Every builder in the country is now required to register their new and the current projects with the Regulatory authority.
  • Developers will now have to park 70% of the amount received from buyers in an escrow account to be used only for construction of that property. This will ensure that developers do not divert the money to purchase new land and that there are no delays in the completion of projects.
  • After the registration is completed, the builder has to publish the pertinent details on the website of the regulatory body.
  • If the builder does not provide the property by the date given in the agreement of sale, or in case the registration granted by the regulatory body is revoked, the buyer of the house has the right to withdraw from the project.
  • In case the buyer wants to withdraw from the project, he has the right to receive compensation which is equal to the amount of the money paid initially along with interest.
  • If a buyer does not withdraw from the project he has to be compensated with interest for every month of delay.
  • If the builder or developer isn’t voluntarily compensating you, you have the right to document a complaint before the Regulatory Authority. Every state Regulatory Authority is expected to hire an officer who performs the functions of a judge. He will conduct an inquiry and bypass an order once he has decided whether or not you’re honestly presupposed to get the compensation.
  • You no longer need to compulsorily rent a legal professional to represent yourself. You can appear yourself or maybe lease a chartered accountant or fee accountant or company
  • If not satisfied with the decision of Appellate Tribunal, an appeal can be filed within 60 days. Each state has to have such a tribunal.

The new law envisions that it will dispose of complaints within 60 days from the date of the filing of the plaint. However, legally it can take more time than that in case there are some procedural problems involved. The RERA Act recommends and offers the framework for formulating a powerful Regulatory Authority within the real property sector.[1] The RERA Act additionally affords an effective decision mechanism for resolving disputes between domestic customers and promoters, through the appointment of Adjudication officials and constitution of the Appellate Tribunal at the state degree.[2] All disputes need to be resolved within a period of 60 days from the day of criticism. The home buyers and promoters cannot approach the high court, before acquiring the decision and judgment from the Appellate Tribunal constituted under the RERA Act.[3] As in keeping with the provisions of the RERA Act, civil instances cannot be filed by way of Promoters and customers in any of the decrease courts.[4]

Impact of RERA on Land Acquisition and Resettlement

Fewer project launches

The number of projects launched by builders will reduce considerably. However, it will benefit the promoters/builders known for their timely delivery of the projects. They will only benefit from RERA as there will be less rivalry in the market for them.[5]

  • Leeching out of dishonest builders- There are many fly-by-night Builders who trap investors and buyers will be kicked out of the market.
  • Benefit developers with sound financial status- RERA will bring in a financial discipline in the real estate sector. Before RERA came investors will generally move the money received from the buyers or stakeholders in one project and move it to other project or constructions.[6]
  • Increased cost- The timely completion of the project will have its own downside in the form of the increased cost of construction. Timely construction will require more labour work and other factor and non-factor requirements for which the builder will take loans from moneylenders at a high rate of interests and ultimately passed on this increased rate cost of construction onto buyers. “Looking at the current situation of uncertainty, property rates may rise for home buyers. After notification of these sections, the number of project launches will be limited and this will affect the demand-supply equilibrium in the market”.[7]
  • Current construction projects- There will be a huge impact on the current projects due to RERA. Pre-launches are being restricted under RERA, so builders will now find it very difficult to get liquidity. This will lead to a delay in the project due to the liquidity crunch in the market.
  • Increase in tenants- Many home-seekers will now refrain from buying homes. There will be a great increase in renting and leasing the houses since the effects of RERA are uncertain to people.

Sociology of Land resettlement issues

The primary intention of any involuntary resettlement technique is to save you impoverishment and to improve the livelihood of those who resettle. To do this, governments and technical corporations ought to apprehend the economics of dispossession, impoverishment and healing, and plan for an increase in the relocation. Decades of sociological and socio-anthropological studies have generated a massive frame of social understanding like resettlement. This information has been translated into coverage and operational prescriptions which have progressed many involuntary resettlement operations.[8] The development of social research on involuntary settlement has been nothing short of a huge phenomenon during the last two decades. Though the progress has been gradual in the first four decades, it has picked up the ferry during the process. There are 7 principles to explain the resettlement issues. They are as follows[9]:

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  • Social knowledge about processes of involuntary resettlement is more intensive and substantive, ‘thicker’ than ever before. The understanding of displacement’s socio-economic content has been considerably enriched, refined and systematised.
  • Research on resettlement has developed extensively as well: it covers new sectors of the economy that involve forcible relocations (forestry, urban infrastructure, thermal plants, and so forth) and has been expanded to include previously unexplored geographic areas.
  • Resettlement research has multiplied its services and products, moving from academic analysis to operational research, from descriptions to prescriptions.
  • Research has scaled up, crossing the threshold from micro to macro, from case ethnographies on localised instances of resettlement to general – sectoral, national, and international – policy frameworks for resettlement.
  • To overcome the limitations inherent in narratives and ‘soft’ methods, resettlement researchers are crafting more precise measurements and indicators for quantifying the magnitude and consequences of resettlement.
  • New theoretical models, based on the ever-growing bodies of empirical data on resettlement, inform the practical planning of induced resettlement more effectively and generate hypotheses for further research.
  • Resettlers’ growing resistance to, and the political implications of, displacement are topically integrated into resettlement research and theory; resettlers’ participation in the reconstruction process has started to be explored.

Important Land Acquisition and Resettlement Cases decided under RERA

  1. Real Estate Regulation Authority, Punjab Vs. Barnala Builder and Property Consultants

  • Brief Facts- Present complaint was a ‘Suo Moto’ by Punjab RERA Authority alleging the Respondent for Advertisement of their projects in print media and also through visual media, without displaying the displaying the registration Number issued by the authority for the projects, which is a violation of Section 11(2) of the Real Estate (Regulation and Development) Act, 2016.
  • Held– That, authority imposed a penalty of Rs. 50,000/- toward a default on part of the promoter and directed to deposit the penalty amount in the designated bank account operated by the Punjab Real Estate Regulatory Authority with 10 days of receipt of order and to report the compliance with the Authority.[10]
  • Authority– Punjab RERA
  1. Manoj Kumar Vs. Prachir Infrastructure Pvt. Ltd.

  • Brief Facts– The present complaint was filed alleging the respondent that the respondent is violating the norms of Municipal Corporation Hosangabad and constructing a residential and commercial complex adjacent to his house in the name of Pink Avenue Apartment. The complainant further contended that the construction work should be done after leaving the gap of 4 feet whereas the respondent is not abiding this norm. The respondent contended that the complainant has himself violated the norms of Municipal Corporation by not even leaving 1 inch of M.O.S. further he has constructed the extended balconies in his house which are again the violation of Municipal Corporation Norms. The complainant himself agreed that he is not the allotted person in the said project. After analysing the presented facts, the authority wants to confirm that is an ongoing project and the marketing for the same is being done. Hence, it is necessary to confirm that construction work done by the respondent is valid or if it is found to be invalid the registration will be liable to be cancelled.
  • Held– The authority directed the Municipal Corporation of Hosangabad to make sure that the construction work is being done by abiding the proper norms and to submit the report within 1 month with the RERA Authority. Further that the question of not leaving the M.O.S by the complainant comes under the jurisdiction of the Municipal Council and it is competent to take actions against the same.[11]
  • Authority– MP RERA (HBD)
  1. Mukti Gupta Vs. S.V.S Builder Pvt. Ltd.

  • Brief Facts– The present complaint was filed alleging the builder for delayed possession by 56 months and seeking to withdraw from the project along with 14% interest on the amount paid till the date and rent paid because of delayed possession. The authority asked the complainant for clarification on the pendency of the case regarding the same matter with other authority. To which the complainant clarified that she has not filed any other case regarding the same matter.
  • Held– The authority decided that in the present complaint a case has already been filed with a civil court for recovery of money by the complainant and hence she cannot seek the same remedy twice from a different authority.[12]
  • Authority– MP RERA (BPL)
  1. Jayesh Kumar Jain Vs. M/s Nirmal Lifestyle Private Limited

  • Brief Facts– That the present complaint was filed by the complainant alleging that respondent has violated the provisions of section 19(1) of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred as Act) by not uploading documents related to permissions, details about the pending ownership litigation before DRT and that the Punjab National Bank has refused to grant loan to the respondent, on the MAHA RERA website. Hence, seeking the refund of the amount paid till date along with the interest and compensation. The respondent has denied the claim of the complainant by stating that he has obtained all the relevant permissions and approvals which are required for MAHAREAR project registration and has uploaded the same on the website. Further that he would be updating the commencement certificate in a month and that the DRT order is not related to the said project. Further the respondent has also submitted that there was no cause of action for the complainant under section 18 of the Act since the date of possession as per the registered agreement for sale is given to be June 2019 which has not been lapsed. The respondent, during the hearings, has made a statement that he is ready and willing them to refund the amount paid by the complainant within a period of 4 months from the date of cancellation proceedings are completed. Consequently, the respondent has filed a written undertaking to this effect on the record of this Authority.
  • Held– The authority on the understanding of section 18 has decided that there is no violation of section 18 of the Act as the date of possession is June 2019 and hence the complainant is not entitled to seek any relief under this section. Further that the respondent has disclosed all the required information as per the provision of section 4 the Act and hence the claim of the complainant is not maintainable.[13]
  • Authority– MAHA RERA

Concluding Remarks

Establishing of Real Estate Regulatory Act, 2017 is a step towards a more institutionalised way of regulating the Infrastructure and construction market in India. Though RERA’s arrival has come to the picture a short while ago, it has already started bringing reforms in the positive direction. Though there is concern surrounding the implementation and establishment of RERA in the states until now 15 states have implemented RERA with 6 states going online too. But there is a need to fasten the process so that the real estate sector may benefit in the long term.

Regarding the land acquisition issues, darkness still prevails in the matters of government expanding the meaning of public good to another level and no provision or precedent established to limit this public good or define its scope.

Hence, with the arrival of RERA, 2017 future of real estate in India looks bright benefit of which is limited to urban areas whereas there is a long way to go in respect to resolving land acquisition and resettlement issues.

Endnotes

[1]  Section 20(l) of THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2017 (hereafter, RERA, 2017).

[2] Section 43 of RERA, 2017.

[3]  Section 56 of RERA, 2017.

[4] Preamble of RERA, 2017.

[5] Rera-implementation-immediate and long term impact (2017, 5 August), Retrieved from http://www.99acres.com/articles/rera-implementation-immediate-and-long-term-impact.html

[6] Asthana Roli (1996), Involuntary Resettlement: Survey of International Experience, Economic and Political Weekly, Vol. 31, No. 24, pp. 1468-1475.

[7] Ibid.

[8] Cernea Michael M.(1999), Why Economic Analysis Of Resettlement Issue Is Necessary- A Sociologist’s View, Economic and Political Weekly, Vol. 34, No. 3, pp. 2149-2158

[9] Ibid.

[10]  Retrieved from https://centrik.in/rera-case-laws/penalty-on-promoter-for-not-displaying-rera-registration-no/ 2018/PUN/Centrik/5/RERA

[11] (January 2018)Retrieved from https://centrik.in/rera-case-laws/no-claim-two-different-authorities-double-jeopardy/

[12] (February 2018)Retrieved from https://centrik.in/rera-case-laws/no-claim-two-different-authorities-double-jeopardy/, 2018/MP/Centrik/12/BPLRERA

[13] (March 2018) Retrieved from https://centrik.in/rera-case-laws/no-claim-u/s18-if-the-date-of-possession-is-not-lapsed/ (2018/MH/Centrik/38/MAHARERA)


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