RERA should be empowered to issue directions to local and government bodies: Stakeholders

The committee constituted by the government to examine the difficulties faced in giving effect to provisions of the Real Estate (Regulation and Development) Act 2016 met on January 3 to discuss issues ranging from empowering regulatory authorities and adjudicating officers to direct even local administration and government authorities, to what constitutes a defect liability period.

Suggestions from developers, RERA authorities and home buyers were received at the meeting held in the Capital. A draft would now be prepared by the ministry of housing and urban affairs and put up for further discussion at the next meeting to be held on January 22, sources said.

It was recommended that the scope of RERA sections 35, 36 and 37 be widened to empower regulatory authorities and adjudicating officers to issue directions to any stakeholders including local administration and government authorities, those present at the meeting said.

It was proposed that the powers provided to consumer forums should be given to RERA authorities too. They should have the power to issue arrest warrants and ensure execution of their orders in a time bound manner to ensure consumers get timely justice, sources said.

The most important issue facing the credibility of RERAs today is giving it the power to implement its own decisions, said Anthony De Sa, Chairman, Real Estate Regulatory Authority, government of Madhya Pradesh.

It should have the power to issue directives to other stakeholders besides allottees and builders such as government agencies and local departments. RERA should be given the powers of a civil court to implement its decisions otherwise it would be dependent on the civil courts and the time taken to implement the order would take far too long, he says.

For example, if the builder defies the directive given by RERA such paying compensation to home buyers, the authority has to refer the matter to the civil court. “If we had the powers of a civil court, we could do it ourselves and not go to civil court. There is therefore a delay in the procedure,” he explains.

Real estate developers represented by Naredco and Credai have suggested to bar the jurisdiction of consumer forum as presently done for civil courts  under section 79 under RERA  Act to avoid conflicts with judgments of RERA authorities  and consumer  forums which are presently both forums  for RERA disputes.

This was opposed by home buyers who were of the opinion that  consumers have the right to decide the forum before which they wish to claim relief. “Rera should be the preferred forum that home buyers should approach  rather than being forced to go to,” said Abhay Upadhyay, President, Forum for People’s Collective Efforts (FPCE).

It was also proposed that presently some cases related to defaulting builders are directly being adjudicated by NCLT. While RERA Act does not presently provide for references of cases of defaulting builders to NCLT, it is suggested that such cases be initially referred to RERA authorities for resolution of dispute within 180 days before invoking the insolvency proceeding. If RERA authorities fail to resolve, the dispute may be referred to NCLT for adjudication, sources said.

Developers have also proposed a bifurcation of the defect liability period and that of workmanship. “We have suggested that the defect liability period should start from the date of completion, occupation certificate instead of possession date as there would be multiple possession dates and that the defect liability period of five years from the date of completion/occupation certificate should be limited to structural defect. As for the defect liability period for workmanship, it is suggested to be for a period of one year from date of completion certificate,” said Niranjan Hiranandani, president, National Real Estate Development Council (NAREDCO).

This bifurcation has been opposed by home buyers. “It should be given to home buyers from the day they get possession of the apartment and not from the date of receiving the completion certificate,” said Upadhyay.

The decision to form the committee comes after four RERA workshops were organised in Pune, Chennai, Delhi and Ranchi where stakeholders, including home buyers, had given suggestions for effective implementation of the Real Estate Regulatory Act (RERA).

The ministry has formed a committee under its joint secretary Shiv Das Meena. The panel will look into the suggestions received at the four workshops held on RERA and then submit its recommendations to the ministry.

Section 91 of RERA provides that in case any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, published in the official Gazette, (within two years of the commencement of the Act) make such provisions not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty.

Issuing a stern warning to states who have tweaked the Central Real Estate Regulatory Act (RERA), union housing and urban affairs minister Hardeep Singh Puri on November 15 had made it clear that the government would not amend any provision of the legislation at any cost and that states resorting to such practices would have to “fall in line, otherwise the consequences would be very harsh”.

Real Estate (Regulation and Development) Act, 2016 (RERA) was passed by the Parliament in March, 2016. As many as 28 states and union territories have notified rules under RERA except Jammu & Kashmir (as RERA is not applicable there), six North Eastern states (Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Sikkim) and West Bengal has enacted its own Act I.e. Housing & Industry Regulation Act (HIRA).

As many as 28 states/UTs have set up Real Estate Regulatory Authority (Regular – 15, Interim – 13). As many as 21 states/UTs have set up Real Estate Appellate Tribunal (Regular -09, Interim – 12). Regulatory Authorities of 23 states/UTs have operationalised their websites under the provisions of RERA. As many as 34,893 real estate projects and 27,073 real estate agents have registered under RERA across the country.