Author: Yamini Arora, School of law, RNB Global University, Rajasthan
Introduction
Before the Real Estate (Regulation and Development) Act, 2016 (RERA) was passed, buying a home in India was a difficult and risky process. Homebuyers had limited protections and had to rely on older laws like the Indian Contract Act of 1872, the Consumer Protection Act of 1986, and state-specific laws like the Maharashtra Ownership Flats Act (MOFA) of 1963. While these laws helped to some extent, they were outdated and didn’t provide enough protection, leaving buyers vulnerable to unfair practices by developers. The introduction of RERA aimed to address these issues by creating a more transparent and fair system. It required builders and real estate agents to register projects and provide essential information such as timelines, project completion dates, and the legal status of the property before selling. This system of registration made the buying process more transparent and safer for consumers.
However, even with the introduction of RERA, problems remain. which make it harder for homebuyers to get justice in a timely manner. Real estate disputes are also complicated by factors like slow court processes, weak legal infrastructure, unclear property titles, fraudulent practices, and people’s lack of knowledge about their rights.
These challenges often leave homebuyers unable to resolve issues with builders, sometimes even giving up on getting justice. To address these challenges, Alternative Dispute Resolution (ADR) methods, such as mediation, conciliation, and arbitration, can provide quicker and less formal ways of solving disputes. These methods are effective in reducing time and costs involved in the resolution process. Additionally, there are steps that can be taken to improve the legal system, such as simplifying complaint procedures, increasing public awareness, improving enforcement of RERA’s rules across states, and strengthening the legal infrastructure to handle real estate disputes more efficiently. By making these improvements, RERA can be made more effective in protecting homebuyers and ensuring that they receive the compensation and justice they deserve in the real estate sector.
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Miss. Samruddhi S. Divekar, A Review on Dispute Resolution under the Real Estate (Regulation and Development) Act, 2016, (Aug 2021) (IRJET) PAGE 2112
Overview of the Real Estate Act (REA) and Its Dispute Resolution Process
The Real Estate Act (REA) was created to help people who have problems with real estate, like delays or poor construction. It set up two main bodies: the Real Estate Regulatory Authority (RERA) and the Adjudicating Officer (AO) to solve these problems. RERA makes sure that complaints are resolved quickly, and it requires that appeals be settled in 60 days. It also helps oversee and improve the real estate industry. The AO decides if someone should be paid for issues with their property, like late delivery or bad quality. However, having two separate groups (RERA and AO) to handle these complaints can sometimes make things more complicated and slow down the process for consumers
For example, if a consumer has a complaint, they may have to deal with both RERA for regulation and AO for compensation claims. This can cause delays because the two forums may have different procedures and timelines. Even though RERA is supposed to solve appeals within 60 days, some cases might still take longer than expected due to the complexity of the issues involved.
To make buying a home in India easier and faster, RERA, the Appellate Authority (AO), and the Real Estate Appellate Tribunal (REAT) should work together in a single system. This system would help people with their complaints and make sure they get help quickly.
It would save time because instead of going to different places for different problems, everything would be in one system. People wouldn’t need to figure out which office to visit or which form to fill out. They would get all the help they need in one place.
People could see what’s happening with your complaint at any time. This would make it easier to track the progress of your complaint. You wouldn’t be left wondering if your complaint is being worked on. It would be more transparent and clearer.
It would make everything more fair and easier to follow. With everyone working under the same rules and timelines, people would know exactly what to expect and when. This would prevent confusion and make the process smoother for everyone.
Judicial Interpretation
In the case of Unitech Ltd. vs. Union of India (2020), there was a big problem with a company called Unitech Ltd., which builds homes for people. The company promised people that they would get their new homes at a certain time, but they didn’t keep their promise. The people who bought the homes were really upset because they had to wait much longer than they were told. They were waiting for months or even years to get the homes they paid for.
The Supreme Court said that Unitech Ltd. should pay the people compensation. This means the company had to give money to the people for the extra time they had to wait for their homes. The Court made it very clear that when a builder promises to give people homes by a certain time, they have to keep that promise. If they don’t, they have to pay the people money for causing the delay.
This case also helped to show how important the RERA law (Real Estate Regulation and Development Act) is. RERA was made to protect people who buy homes and make sure builders don’t trick them. The Court said that rules like RERA are there to protect homebuyers from being treated unfairly. Builders should not be able to break their promises without facing consequences.
In the end, this case showed that people who buy homes should be treated fairly and that if builders don’t follow the rules, they have to pay for it. It also helped to make sure that homebuyers have the right to get their homes on time or be given compensation for delays. This is a very important decision because it makes sure that people’s rights are protected when they buy something as big and important as a home.
Conclusion
In conclusion, RERA (Real Estate (Regulation and Development) Act, 2016) plays a crucial role in improving transparency and fairness in the real estate sector in India. By setting clear rules and guidelines for builders, RERA ensures that homebuyers are protected from delays, fraud, and unfair practices. It also provides a faster and more effective way to resolve disputes between builders and buyers. With RERA, builders are held accountable for delivering projects on time, addressing defects, and providing accurate information. This law helps make the process of buying and selling property more secure, transparent, and reliable, benefiting both consumers and the real estate industry.
FAQS
How can I file a complaint under RERA?
• Answer: If you have a problem with a builder, you can file a complaint with the RERA authority of your state. The complaint can be related to delays in possession, defective construction, or non-compliance with the agreement. Each state has its own RERA portal where you can register complaints and track their status.
Do I need to pay to register my complaint with RERA?
• Answer: Generally, RERA does not charge a high fee to register complaints, but the fee may vary depending on the state. It is much cheaper compared to going to court.
Is RERA applicable to both residential and commercial properties?
• Answer: Yes, RERA applies to both residential and commercial real estate projects, making it a comprehensive law for the real estate sector.
What documents do builders need to register with RERA?
• Answer: Builders need to provide several documents when registering with RERA, including:
o Project details (including timelines, layout plans, etc.)
o Legal documents related to land ownership and title
o Clearances and approvals from relevant authorities
o A declaration of project completion and defects liability.
What is the penalty for a builder who violates RERA rules?
• Answer: Builders can face penalties for various violations under RERA, such as: o A fine up to 10% of the project cost for failing to register the project. o If they fail to deliver the property on time, they must compensate the buyers. o Builders can also face imprisonment for non-compliance in certain situations.
Do I need a lawyer to file a complaint with RERA?
• Answer: No, you do not need a lawyer to file a complaint with RERA. The process is simple and designed to be user-friendly for consumers. However, you can consult a lawyer if you want legal advice, especially if the matter is complex or if you want to pursue other legal options.
