If Consumer Forums Were So Effective, We Wouldn’t Have Needed RERA

As Real Estate Regulation & Development Act (RERA ) completes 7 years, Union Housing & Urban Affairs Minister, Hardeep Singh Puri talks about RERA’s successful journey and  few challenges that are  still  being tackled to revamp RERA  as a fool-proof and formidable tool to protect the interests of home buyers for which this act  was essentially enacted . Torbit  Realty Editor, Vinod Behl  presents the select excerpts of Puri’s more than an  hour-long interaction with the stakeholders at the recent 4th meeting of the Central Advisory Council of RERA  held under his chairmanship.

On RERA’s Journey So Far

No matter what yardstick you use to measure the distance travelled by RERA, enacted by Parliament in March 2016, I think the assessment will be that a lot has been done . But as we take and draw satisfaction from what has been achieved , I think all of us agree that some more distance needs to be  travelled.

When I joined the Housing and Urban Affairs Ministry on September 3, 2017, RERA was already enacted. But by all accounts I had the impression that a large concerted effort was underway to subvert or completely derail RERA. It took the form of challenges in the courts which we surmounted. The journey we traversed from then to now  is a reflection of all the collective efforts and the spirit of goodwill  and cooperation that has been forthcoming.

However, some serious issues need to be addressed . Making decisions is easy but when you start implementing them, you come across physical and identifiable roadblocks and some invisible ones. After we won the legal battle, there was an impression that we would amend or tweak RERA . But during the last six years I have been at the Ministry, I and my colleagues have not allowed any tweaking/undermining of RERA to take place. But that doesn’t answer the basic question that state governments have to be brought on board. One state government in particular-West Bengal raised the issue before the apex court. Now that the apex court has given a  decision favourable to RERA, we need to review and reinforce our efforts to make sure that the West Bengal government comes on board.

On the Problem of Stalled Legacy Projects 

Clearly, we need focused implementation to tackle this problem.  RERA can take the decisions but the implementation finally comes down to the level of district magistrates  etc. I do not believe they want to undermine it but the fact is that district magistrates take up these issues along with the other work assigned to them. But we are pushing them and we are even contemplating sending communication to chief secretaries of the states to see what can be done to tackle it. But we have to be cautious that if it is not done, a lot of people who need redressal of their grievances do not take to consumer courts which is a normal human tendency

All of us need to make sure that our decision making is fair and objective and it delivers justice and is seen to be doing that. This is at a very healthy and mature stage. No one is questioning RERA anymore. But there are vested interests and we have been able to battle these vested interests up to a point. This is the last mile.

Recently, our Ministry had constituted an expert panel headed by former Niti Ayog Chairman, Amitabh Kant to examine stalled real estate projects holistically and suggest options to deliver these projects to home buyers. I would recommend that the panel expeditiously make their  recommendations and all stakeholders should carry out their share of responsibility without delay so that these projects could be completed soon and homes handed over to buyers who have been waiting for a very long time.

On Maharashtra RERA Giving Project Extensions to Developers

I am aware of that. I think we need to address the Maharashtra problem separately. There are too many cases of not solving the problem and getting an extension. We  will address this issue

On the Efficacy of Escrow Account Provision

Prior to this provision, buyers’ money was used by some developers for land banking.

But the provision of an escrow account under RERA has proved to be a major safeguard against the misuse of home buyers’ money. Nothing prevents us to have more such safeguards through mutual consent which will help home buyers. Today we are in a situation where there is predictability, With valuations going right and inventories coming down, I think we are getting there

On One Nation One License for Brokers

We Have sought the legal opinion of the expert committee formed for this purpose. We have not got any feedback from  the committee so far  to move forward on this issue.

On Deviation  of Model Builder-Buyer Agreement 

We are in a transition stage. Prior to RERA, there were no prescribed norms . Now, we have come into the system. It will take a little more time for the system to settle down. Regarding the complaints of deviation from model buyer-seller agreement, what each state RERA authority should do is to have a test audit done . Looking at agreements if any specific deviations are brought to the notice , we will ask states to look into these cases.

On Forum Shopping by Homebuyers 

Let me just state for the record that the issues pertaining to the real estate sector have been made the subject matter of RERA. Prior to RERA, we had the consumer forum redressal mechanism. If I were an affected party, I would also go for forum shopping. But let us resist the temptation of trying to solve the problem of another forum through another mechanism. If the consumer forum mechanism had been that effective, we would have never needed RERA.  Let us use the forum of RERA  designed through an act of Parliament which is statutory . This is not something my preference or someone else’s preference.

There was a concerted attempt to completely derail the legislation. . We have won the legal challenges. Let us now not try to weaken it by saying that other forums can address the homebuyers’ problems.