4 YEARS OF RERA: THE DOGMA OF HOPE?
By Adv Siddhant Mehta
Four years and counting, ever since the Real Estate Regulatory Authority (RERA) was arrayed,
the real estate sector continues to play a prominent role in backing India’s fiscal progression,
being one of the principal cradles of employment and infrastructural growth. Inopportunely,
due to the lack of directives and stern practices until 2016, the sector had been pigeonholed by
a great deal of lop-sidedness, ever so often generating high – levels of wariness and dread midst
home buyers, bankers and promoters.
RERA was ordained to stimulate transparency and culpability by way of shielding the rights
and interests of the homebuyers, leading to an about-turn in home deals. Nonetheless, the
wholehearted involvement of the Indian states in its nascent stages is worth noting. While, there
lies an obstacle laden path ahead, it is a seemingly incredible feat to garner recognition and
approval given the trepidations during its formative past of contemplative decision making.
Likewise, even though the home buyers had been fretting about the newfound guidelines, they
seem to be bequeathing their trust in the The Real Estate (Regulation and Development) Act,
2016 (Act) by way of invoking proceedings against dishonest builders for rampant delays and
As currently positioned, an approximate of 39,855 projects 1
have been listed under RERA,
owing to the notification of the general rules in 30 states whilst establishing permanent
adjudicating bodies in 20 states. It is reassuring to note the steady decline in some of the most
common protests such as untimely possessions, false declarations and inappropriate
accounting/billing for additional areas and/or amenities provided, due to the fundamental rights
conferred upon the home buyers and the stringent statutory compliances met by the builders.
Conversely, the Maharashtra Real Estate Regulatory Authority (Maha RERA) seems to have
successfully issued orders and/or cleared off 64% of the 6,631 complaints received, as of April
As a result, the Maha RERA has been given more teeth vide the order passed by the Bombay
High Court in August 2018, wherein the authority’s power had been boosted to deal with
grievances of unregistered projects.3
Since its inception, RERA has endeavored to cultivate the practice to urge and make
builders/promoters compliant with the Act, despite which builders would neither make
payments nor attend hearings. However, 2 years down the line, things have reformed with
builders being reprimanded by the concerned RERA authorities for being in breach of the
RERA guidelines. As a matter of fact, builders are now broadcasting the RERA listing and aggressively registering their ventures to draw attention towards the home – buyers and
The real estate sector is living through consolidation as the disorganized builders are finding it
hard to comply with the stringent norms under RERA. It is abundantly clear that only upright
builders/promoters will make ends meet with the impending wave of progress in the sector.
Amongst other compliances, builders are now supposed to deliver an affirmation to the home
– buyers declaring the legitimate legal title to the land, alongside authentic documents as proof.
RERA has even gone a step ahead in the process of safeguarding the interest of home buyers
by advocating an equally poised model (builder – buyer) agreement for sale, which can be
prepared and regulated in consonance with the respective state rules. Whereinafter, the
existence of some penal provisions mandating a certain sense of credibility amongst the
builders together with norms relating to disclosures, has facilitated transparency.
It is laudable, to acknowledge the Government’s twin tower intervention of the Act and
demonetization, that brought about the much desired jolt to the realty sector. So much so, that
cash induced dealings vanished into oblivion, provisions were introduced to protect the interest
of home buyers, developers were barred from using monies in a fungible manner and the Apex
Court became the messiah of the masses by belting orders against rowdy developers.
The significant creeds of RERA that enkindled with home-buyers and all parties associated
i. The right to inspect the clarity and marketability of the land title
ii. Reflection of associated litigations on the portals
iii. Background and portfolio of the developers
iv. Registration of projects only on the procurement of all necessary sanctions
v. Transparency of the invested monies vide creation of escrow accounts
vi. Provision of a model agreement for sale
vii. Apprising the home buyers about the latest approvals vide web portals
viii. Stringent timelines pertaining to the completion of the projects
ix. Heavy consequences for non-compliance of the norms (penalties upto 10% of the
x. Customer centricity and transparency
xi. Certificates from developer proving the quality of construction
xii. The power vested in the home buyers to remove developers from the project
xiii. The ability and right of the home buyers to pay in accordance with a project’s progress
Even so, it is equally essential for the builders to have the funds and other prerequisite reserves
to be able to complete any venture. It would be in stark contrast to the previous commercial
scenario where a huge chunk of the monetary backing was principally reliant on incremental
deals without any strict deadlines. Likewise, it is pertinent for the states to set-up a structure for the comfort of carrying out
development in the real estate sector and improve demand, assuming the sector’s involvement
to the total economy in terms of service providers and the demand of intake it brings forth to
supplementary zones like steel, cement, etc. Hence, administrative inclination and
organisational competence will continue to be fundamental aspects on the road to enactment.
On the flipside, there are manifestations where the provision of the Act have been diluted by
the States which go against the dictum of RERA, predominantly with respect to “ongoing
projects”. The watering down of the explanation of what institutes an ‘on-going project’
continues to be a sizeable worry. More than a few States decided to modify this definition in
such a manner that various incomplete projects may be excused from the ambit of RERA.
Coincidently, the intention of the Apex Court and the Act are on the same footing to permeate
self-assurance in the realty sector by warranting that the projects are scrutinised and finalized
in a judicious way by complying with all the rules and guidelines.
Correspondingly, regulations pertaining to imprisonment for not following the orders of the
RERA authorities have been concocted by furnishing for compounding of breaches and hefty
consequences on the defaulter.
In pursuance to the dilutions, the Bombay High Court upheld the constitutional legitimacy of
RERA and its applicability to ongoing projects across States in Neelkamal Realtors Suburban
Pvt. Ltd. And anr Vs. Union of India4
. The 2017 order came subsequent to the Apex Court’s
ruling asking the Bombay High Court to set the track on analogous encounters in other courts.
The ruling, offered respite to developers too, it extended RERA’s authority to allow more time
as a concession to developers for the timely completion of a project. Such bonus time is
intended to be only granted in compelling situations, depending on a case to case basis.
Auxiliary to all the aforementioned enrichments and apprehensions, one region of development
that can help the Act in becoming more relevant is if the standing State RERA authorities
(inclusive of other Committees and tribunals) are endowed further and this law is prescribed in
an evenhanded fashion, the legislation shall meritoriously function as an ombudsman to watch
over and accelerate the operations of pendent ongoing developments. This process may
possibly effect a rate of lessened pressure on the legal fraternity to individually handle these
developments and projects on an advanced footing.
In conclusion, going ahead, the nationwide orientation of the central and state rules will act as
a channel to propagate uniformity. Presently, the deviance between the central and state rules
is hampering the capacity of the builders to come up with projects across the nation.
Streamlining of the rules will not just aid the builders to maneuver their resources on the road
to organization and expansion, but also reinforce the home buyer’s assurance in the course.
Views are personal.