The Real Estate (Regulation and Development) Act, 2016 (RERA) is an earnest attempt to regulate an industry that has long remained unregulated and opaque. In its full form, RERA came into effect in May 2017. But its implementation has not lived up to expectations. Many States are yet to comply with the Act because of a lack of preparedness and social and political challenges. On the bright side, the States that have implemented RERA, such as Maharashtra and Karnataka, have witnessed price rationalisation and recovery in the real estate sector.
The progress
RERA is applicable across the 29 States and seven Union Territories. After nearly two years, as many as 22 States have notified general rules. However, West Bengal has its own law for the sector — West Bengal Housing Industry Regulation Act, 2017. And six North-Eastern States have not notified the general rules. This is because the land belongs to certain communities, though these issues are expected to be resolved at the earliest.
As per data available on December 1, 34,674 projects were registered with RERA across India. Nearly 24 States and UTs have set up web portals for registration. Though the progress is slow in some States, entities can sign up online, where promoter and project details are available.
This has brought in much-needed transparency, and customers can now view the number of projects and real estate agents registered and the status of the projects on the web portal. For instance, in Bihar, only 312 projects have been approved after nearly two years of RERA. Uttarakhand has 155 registered projects. Maharashtra, on the other hand, has registered 18,897 projects.
Though 28 States and the UTs have set up a real estate regulator as per RERA, 13 States only have an interim authority. While the Act does not define a timeline for winding up the interim regulator, setting up a permanent regulatory authority in due course is imperative. States such as Karnataka, Rajasthan, Tamil Nadu and Telangana still have interim regulators as the RERA authority. Since the regulator is responsible for implementation of rules and regulations in the market and ensuring transparency of real estate transactions in the State, having a permanent regulatory authority is critical to monitor the progress of RERA. Interim regulators’ efforts fall short of the intended goal of a dedicated real estate regulator, leaving consumers in the lurch.
Establishment of appellate tribunal
The progress on establishing an appellate tribunal is also disappointing. As per RERA, every State has to establish an appellate tribunal to regulate and sort out grievances, and ensure timely completion of both residential and commercial projects. If a promoter has violated the terms of the agreement or has delayed handing over the projects, a consumer can approach this tribunal and make a complaint. The tribunal is expected to adjudicate cases within two months.
But according to recent data, 14 States — including Chhattisgarh, Goa, Assam, Kerala, Andhra Pradesh and six North-Eastern States — have not established interim or a permanent appellate tribunals. Therefore, the progress of complaints registered and settled is unknown in these regions.
What’s next?
Learning from Maharashtra will help facilitate growth and bring new investments to the real estate market. Since its launch, MahaRERA has ticked all the boxes — ensuring accountability towards property buyers and protecting their interests, bringing in transparency to transactions, reducing delays in project hand-over, and establishing a fast-track dispute mechanism. An individual can view projects online to know the development status and the expected date of completion.
For instance, if you want to check the status of Godrej Properties’ The Trees, the search result will give you the project type (in this case, residential), project status (ongoing), proposed date of completion (June 2021), whether subject to litigation (No), address of the project (Vikhroli East), proposed and sanctioned buildings, FSI details and the number of flats booked.
MahaRERA has gained a reputation for speedy settlement of complaints, thanks to the establishment of a conciliation forum. Of the 5,145 complaints received, orders were passed on 3,217, according to recent statistics available on the MahaRERA website.
Other States need to draw lessons from Maharashtra, to restore the faith of home buyers, particularly in the case of projects under construction. The first step is to get the portal running efficiently and providing timely updates. This is imperative to remove ambiguities in the projects.