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RERA: LAW OF THE LAND?

The Central government introduced the Real Estate (Regulation and Development), Act 2016 (RERA) as a model act to govern real estate laws in India. Since real estate is a state subject, all states had the flexibility to re-draw and adopt the same since May 1, 2016, when it was introduced with 60 out of 92 sections. RERA fully came into effect nearly one year ago and was expected to herald a new era of an organised real estate sector in India. While RERA compliance in few markets has brought in a lot of transparency, significant work needs to be done at the ground level to ensure complete adherence across the country.

With the exception of Maharashtra, most other states and Union Territories (UTs) have followed a quasi-implementation route. MahaRERA’s proactive implementation of RERA stands out and is setting new precedents every day. Of the total 25,000 projects registered under RERA across India, 62% are in Maharashtra alone.

As per the Central RERA act, the process outlining appointment of a Real Estate Regulatory Authority came into force on May 1, 2016. But even after two years, only 3 states (Maharashtra, Madhya Pradesh and Punjab) have established Permanent Real Estate Regulators. Most states have been buying time on getting a Permanent Regulator in place after handing over the reins to such “Interim” authorities. The administrative nonchalance of interim regulators puts a big question mark on the efficacy with which consumer disputes are addressed, ruled and made available to the public at large.

Recent rulings by MahaRERA have been successful in restoring buyers’ sentiment in under construction projects. Some of these rulings have been delivered within 30 days of being filed and have created a ripple effect through wide media coverage. Maximum consumer complaints were related to delayed possession of flats and extended delivery timelines of projects on RERA websites. Few complaints were settled in favour of developers as well. Since its constitution, MahaRERA has ruled in over 1000 cases with the first ruling coming in less than six months since its inception. However, a large section of consumers facing grievances over residential properties in India continues to run from pillar to post.

Dilution of the Central RERA act by states has delayed the recovery cycle in the residential sector which is undergoing a prolonged slump owing to lack of buyers’ interest in under construction projects. Despite a positive economic outlook, the confidence of buyers is still not back. It is time for the Central government to step in and take non-complaint states to the task. The state governments had ample time to draft their own real estate laws per the ground realities and their liability should not end with setting up interim authorities. The Central RERA should also have its own portal for regular updates on RERA implementation by states. It will go a long way in removing ambiguity about the extent of RERA compliance in each state.

Given the impactful stature of the MahaRERA, the new eco-system hence created has taken care of most problems from the consumers’ perspective and made the process transparent. Other states struggling to implement RERA should learn from Maharashtra’s successful strategy to bring the buyers back to under construction projects.

Sources:.knightfrank

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