A few years back the real estate sector in India was progressing at a rapid pace and numerous investment opportunities were available wherein a significant number of people invested a huge sum of money from their hard-earned income and savings. Lucrative offers and promises made deals by builders looked good and easy on the pocket. But with the passage of time and malpractices by developers and builders such investments started to look dull and the prospect of getting possession of apartments became a distant dream.
Instances of fraud, cheating and delay in possession of apartments by certain builders became common. People invested on the basis of brochures and advertisements and there were occasions when the buyer found that no such project ever existed. The builders took advantage of laxities in Consumer Laws as the cases took years to get decided thereby allowing builders to get away from the clutches of the law for a long time. Due to such consistent issues, a need for an authority arose which could regulate all such real estate projects from the very onset and also increase a sense of security amongst the buyers.
The Central Govt. thus brought in Real Estate (Regulation and Development) Act 2016 with an objective to establish a Regulatory Authority for regulating and promoting real estate sector, bring efficiency and transparency in the sale of plot, flats, protect the interest of consumers in real estate sector and to establish an adjudicating mechanism for the speedy redressal of consumer grievances. The Act provides for establishing Real Estate Regulatory Authority (RERA) which shall have a chairman and minimum 2 full-time members who shall preside over all such matters before the RERA.
Few highlights of the Act are-
1. The Act mandates prior registration of a real estate project and agents with the RERA.
2. The projects which were started prior to the enactment of this Act were also mandated to get themselves registered with RERA within 3 months from the date of commencement of the Act.
3. Only those builders who got completion certificate prior to commencement of this Act were exempted from registration.
4. RERA provides for compensation from a builder on deposits or advances made by a buyer on account misleading advertisements of any project.
5. Agreement to sale is necessary for taking an advance or deposit from a buyer.
6. Builder to rectify structural defects if brought to his notice within five years from the date of possession.
7. Return of amount and compensation to the buyer where the builder fails to complete or give possession of the apartment in accordance with the terms of the agreement or due to discontinuance of his business as a developer.
The Act also lays down certain rights and duties on a buyer such as a buyer shall be entitled to all information related to project and he shall be entitled to claim possession at the relevant time as per the agreement. Failure to give possession by builder shall entitle him for refund and compensation with interest. At the same time, the buyer is under an obligation to make timely payments and shall be liable to pay interest on delayed payments.
The Act also lays down provision for Appellate Authority wherein either party aggrieved by the orders of RERA may challenge the same by way of appeal. Though this is not a very old Act but has come a long way since its inception in helping the buyers by providing them with a platform where they can easily put forth their grievances and get it resolved in a short duration as compared to any other Act or law in force. It has played an active role in containing the practices of builders who use to mislead prospective buyers through lucrative advertisements and those builders who have been delaying possession to the buyers have been made to refund and compensate the respective buyer.