Legal remedies for homebuyers

The Real Estate (Regulation and Development) Act, 2016 (RERA) was passed by parliament and notified by the states to protect the interests of home buyers and ensure that builders maintain transparency about the projects throughout. About 10% of the complaints received by the consumer forums across the country still pertaining to the housing sector point towards roadblocks that continue to hamper full implementation of RERA. The Act requires real estate developers to register their projects with the Real Estate Regulatory Authority in the state in order to book or offer to sell their projects. If the projects are not completed within the stipulated time mentioned in the registration document and sale agreements, or if the registration is suspended or revoked by the regulating authority, then home buyers can withdraw from the project. In the event of a buyer seeking to withdraw due to non-completion of the project in time, RERA empowers the buyer to be compensated the full amount by the defaulting builder without having to file a complaint with the regulating authority. Delays or stalled projects put homebuyers under financial stress, as apart from the payment of the amount for the purchase of the apartment, they are also required to pay EMI on the homebuying loan amount. And for those buyers staying in rented accommodation, the monthly house rent in addition to bank EMIs on home loans make life miserable and make it difficult for most middle-class home buyers to make both ends meet. At the recent meeting of the Central Advisory Council under RERA, Union Minister for Housing and Urban Affairs Hardeep Singh Puri harped on the need for RERA authorities to monitor the timelines for completion of the projects on a regular basis and take prompt action in advance so that projects are completed on time. While it can help expedite the projects, giving more teeth to the regulatory authority against wilful default is critical to ensuring that no projects are stalled due to diversion of funds by builders for personal asset building or for any other unjustified reasons. Under Section 31 of the Act, an aggrieved person may file a complaint with the RERA Authority or the adjudicating officer appointed by it for any violation or contravention of the provisions of the Act, rules, and regulations made thereunder against any promoter, allottee, or real estate agent. Uploading the quarterly progress report in respect of registered real estate projects on the RERA website for public viewing is crucial for achieving the desired transparency envisaged in the Act. The website Assam RERA authority shows that in respect of the majority of the registered projects, including some that were approved about four to five years ago, the quarterly progress reports have not been uploaded, which is a gap that needs to be bridged at the earliest to protect the interests of the buyers in accordance with the provisions of the Act. Section 43 of the Act, 2016, provides that where a penalty has been imposed by the RERA and the same is put to challenge by a promoter by way of appeal before the Real Estate Appellate Tribunal, the promoter must first deposit with the Appellate Tribunal at least 30% of the penalty or such higher percentage as may be determined by the Appellate Tribunal. Secondly, where a challenge is also made to an order asking the promoter to make payment of the total amount to the allottee, including interest and compensation, if any, the promoter has to deposit the said total amount before the appeal is heard. The tribunal invoking this provision in respect of default can send a strong message against violations of the Act and any attempt by a real estate promoter to deceive the buyers by delaying the projects and diverting the funds meant for the projects. The issue of inflationary pressure on real estate projects due to the rising cost of construction materials cannot be ignored, but the RERA authority needs to ensure that additional costs are not arbitrarily passed on to the buyers. Industry estimates show that the cost of raw materials for real estate projects has increased by about 45% and labour costs have also increased by about 25%, which has led real estate developers across the country to raise property prices, forcing many middle-class families to curtail their dreams of buying a spacious house in a big city. For buyers, apart from delays, deviations by the developers from the builder-buyer agreement pertaining to modifications in the building plan, interiors, etc. also cause immense hardship due to a lack of transparency. One suggestion put forward by the associations of home buyers in different cities is that RERA authorities scrutinise the draught builder-buyer agreement clause and check for any discrepancy. Promoters need to acknowledge that the real estate sector cannot grow without the robust participation of home.