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Should Home Buyers Be Restricted to RERA For Grievance Redressal?

Torbit - May 14, 2023 - - 0 |
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A recent remark of the  Union Housing & Urban Affairs Minister Hardeep Puri at the RERA  Advisory Committee meeting about the need to limit aggrieved homebuyers to RERA for seeking redressal of their grievances rather than going  ‘forum shopping’ i.e approaching multiple forums. The government entities were also advised against encouraging homebuyers for using multiple forums including consumer courts. This sparked off a fierce debate. Torbit Realty delves deep into this important issue, seeking the views of different stakeholders. Vinod Behl

No one can dispute that the Real Estate Regulation Act (RERA)  is a landmark reform in the real estate sector which before its implementation in 2017, was totally unregulated with millions of property buyers facing great hardships with regard to the safety of their investment. But RERA has changed all that by protecting the interests of aggrieved home buyers, providing them a single-window solution on a fast track basis. The statistics are self revealing . Over the last four years more than one lakh cases have been disposed off by RERA. This is significant, considering that about 5.50 lakh cases are pending in consumer courts  and a large number of these cases pertain to real estate.

But despite this big relief being  provided by RERA, aggrieved home buyers simply can’t and shouldn’t be limited to only RERA  simply because it is still early years for this law which is like any other law is facing teething problems and continues to evolve with more measures to further  strengthen it in order to protect the interests of consumers. Considering the prevailing deficiencies in RERA, one should not squarely blame desperate home buyers for approaching consumer court or even NCLT. Even developers approach NCLT . Moreover, it is seen that in some RERA courts cases are lingering for a couple of years or even more when RERA Act clearly stipulates redressal within 60 days.  In a large number of cases, rulings of RERA courts remain unimplemented. Then there are a  few RERA  authorities which are functioning in an ad hoc manner. In NCR, Gurgaon and Panchkula benches of HARERA have been without a full time Chairman.

However, it should also be seen that the government has good intentions to revamp RERA  through policy reforms . The government is continuously engaged in overhauling IBC to reduce the burden of  court cases , prolonging justice to home buyers. It may be noted that out of 6200 companies that have gone into bankruptcy, around 21% are real estate companies. The government is also planning to introduce a Model Real Estate Contract between buyers  and sellers with a view to correct the anomaly  of it tilted in favour of builders. Since most of the grievances of home buyers pertain to stuck housing projects , mostly due to builders facing fund crunch, the government has come to the rescue of such aggrieved home buyers by providing last mile funding to stalled projects by floating a Rs 25000 crore SWAMIH Fund which has successfully deployed over Rs 12000 crore to complete  some stuck projects, much to the relief of home buyers.

In the light of this, there is a clear case of supporting HOusing Ministry in Strengthening RERA for the benefit of home buyers. On its part the government needs to take effective steps on priority basis to plug deficiencies in RERA and revamp redressal mechanisms  to balance the interests of developers and home buyers  so that RERA serves its basic purpose of providing speedy  and effective resolution of the problems of home buyers . Once that happens, home buyers will automatically stop approaching multiple forums for the redressal of their grievances.

Rajan Bandelkar , President Naredco

Disincentivizing forum shopping by property consumers will help streamline the dispute resolution process  and reduce the burden on the legal system. RERA has played a pivotal role in ensuring transparency and accountability within the real estate sector. Since its inception, RERA has significantly contributed to the reduction of disputes and grievances among property consumers. The mandatory provision of maintaining  escrow accounts has instilled confidence and trust in buyers, leading to decline in legacy cases. The robust mechanism of RERA has maintained equilibrium between developers and consumers. By bolstering RERA’s effectiveness , we can continue to build a thriving real estate industry.

Sanjay Dutt, MD, Tata Realty & Infra Limited, Tata Housing Development

Real estate is a very specialised sector having its own unique set of challenges. RERA is well equipped to handle issues faced by home buyers and builders alike. It is critical that disgruntled consumers refrain from knocking on the doors of consumer forums, high courts or other tribunals and channel their cause to RERA. Such an approach will ensure consistency in judicial proceedings, reduce pressure on the already stressed justice system and reduce legal cost of all stakeholders.  Further, the move will ensure that the government’s well intentioned objective of  constituting a focused and sector-specific specialized authority does not get defeated.

Shalin Raina, MD-Residential Cushman & Wakefield

RERA was constituted with the purpose of providing a single forum exclusively focusing on the redressal of grievances of property consumers  as they were facing hardships. It was also meant to boost the confidence of property buyers by providing timely redressal. In that backdrop , RERA is a convenient mechanism for consumersBut then if the government wants homebuyers to approach only RERA for their problems and not explore other avenues like consumer courts, it should ensure robust redressal mechanisms with accountability for  time bound resolution of grievances, will automatically wean away consumers from approaching forums other than RERA.

Dhruv Agarwala , Group CEO, Housing.com, Proptiger.com and Makaan.com

The real estate sector has been a major source of complaints and pending cases in consumer courts across the country. In RERA, homebuyers have a dedicated forum to address their grievances.This has not only resulted in faster resolution of cases but also reduced the burden on other judicial bodies. RERA has successfully resolved a significant number of complaints and has helped the real estate industry in gaining credibility among the homebuyers. It is crucial for people to trust real estate regulatory law and approach RERA for speedy resolution of their issues. By doing so we can ensure a transparent  and trustworthy real estate  market benefiting both buyers and sellers.

Ananta S Raghuvanshi, President Naredco MAHI

I am in complete agreement that realty related grievance redressal must ideally happen in one forum- RERA which has been specially constituted to specifically address the issues of the real estate consumers. RERA has helped fast-track resolution of property disputes as RERA members have deep knowledge of the subject. RERA covers most situations and provides appropriate guidance, saving resources.

Abhay Jain, RERA Advocate

These are still early years for RERA and it needs to evolve in terms of reach of RERA courts and strengthening of redressal mechanisms. Presently, consumer courts are there in every district whereas in many states, there is only one RERA Authority , making it difficult for many aggrieved home buyers to travel long distances for RERA cases. But in due course of time multiplicity of authorities should be avoided and RERA should be encouraged as a single forum to tackle home buyers’ grievances.Like  special matrimonial courts came up for hearing matrimonial disputes which were earlier heard by regular courts.

Prashant Thakur, Senior Director & Head Research, Anarock Group 

The progress report of RERA (as of January 2023 ) entrusted with the responsibility of setting up a grievance redressal system , shows that more than 1 lakh cases have been disposed off since 2019. Maharashtra RERA data as of May 3 2023 reveals that out of 21274 complaints, orders have been passed in 67% of cases.While RERA is active and should be the preferred forum. Though  the law does not dissuade consumers from approaching other courts.. hould be seen that the resolution of property comes from experts at RERA and other courts are not burdened.

Sachin Bhandari, ED & CEO, VTP Realty

RERA has been protecting the interests of real estate consumers and as such the practice of forum shopping by home buyers is uncalled for. Especially as RERA provides a dedicated and speedy adjudicating  mechanism for the redressal of their grievances. Property buyers should stop approaching multiple forums to seek remedy of their grievances.

Deepak Gulati, Aggrieved Home Buyer

 If the option of aggrieved home buyers to approach forums other than RERA, it will benefit builders. I invested my life’s savings in the Greenopolis residential project in Sector 89 Gurgaon in 2012. The builder stopped construction in 2016 and in 2018 I approached HARERA . In 2019, HARERA delivered a favourable order to attach and auction properties of Orris and 3C. However HARERA could neither auction attached property nor  could it provide  houses. In 2020, despite finality of order and pending execution, HARERA gave a separate suo moto order which is soft on builders. Today, the need is to make RERA strong enough so that there is no need to look  for other forums and the government should involve homebuyers in this exercise.

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