RERA provides robust regulatory mechanism to protect rights of home buyers: Centre to SC

“There is a robust regulatory mechanism and a draft ‘agreement for sale’ has already been prescribed under the provisions of RERA, which seeks to balance the rights and interest of home buyers and promoters in an accountable and transparent manner,” it said.

It must be brought before the consideration of this court that prior to 2014 Real Estate Sector was largely unregulated.
It must be brought before the consideration of this court that prior to 2014 Real Estate Sector was largely unregulated.

The Centre has told the Supreme Court that there is a robust regulatory mechanism and draft ‘agreement for sale’ has already been prescribed under the provisions of RERA, which seeks to balance the rights and interest of home buyers and promoters in an accountable and transparent manner.

The Centre has filed an affidavit in the top court on a plea seeking direction to to frame model pacts for builders and agent buyers to protect customers and bring in transparency in the realty sector in line with the Real Estate Regulatory Authority (RERA) Act, 2016.

“There is a robust regulatory mechanism and a draft ‘agreement for sale’ has already been prescribed under the provisions of RERA, which seeks to balance the rights and interest of home buyers and promoters in an accountable and transparent manner,” it said.

It said that according to section 84 of RERA, the appropriate government that is state government save in the instances involving its application in the territory of union territories has to notify rules for carrying out the provisions of this Act.

The union government said that it has shared the draft ‘agreement for sale’ in 2016 itself after the enactment of RERA with all the states and union territories and currently, all the states and union territories have notified rules under RERA except Nagaland with which the Centre is in discussion.

“It must be brought before the consideration of this court that prior to 2014 Real Estate Sector was largely unregulated. Under the regulatory regime of RERA, the ongoing projects which have not received the completion certificate; need to get registered under RERA,” it said, adding that RERA ensures transparency, accountability, and financial discipline in the real estate sector.

The affidavit said that RERA mandates for registration of projects before advertising, marketing, booking, selling and the law ensures the timely delivery of real estate projects and the entire fund flow is also subject to strict monitoring by the regulator to avoid diversion of funds, which will also secure the interest of home buyers.

“The RERA seeks to address vital issues of fair transactions, timely delivery, and quality construction through speedy adjudication of disputes, thus empowering the home buyers,” it said.

The Centre said that under the provision of RERA, if the developer fails to complete the project as per terms of agreement for sale, a home buyer can either seek a refund of paid amount along with interest or ask for interest for every month of delay, till the handing over of the possession.

“RERA also provides for strict penal provisions of imprisonment in addition to provisions of refunds, interest, and penalty in case of non-compliance by developers, allottees, and agents,” it said.

On November 8, the top court while hearing the plea filed by advocate Ashwini Upadhyay had said that a model builder-buyer agreement is needed in the real estate sector and the Centre should file its reply on the issue as it is an “important matter in the public interest”.

On October 4, the top court had said it is important for the country to have a model builder-buyer agreement in the real estate sector for consumer protection because developers try to put numerous clauses in it, which common people may not be aware of.

Upadhyay had said that there should be a model agreement prepared by the Centre as some states have it and some don’t, and there is no uniformity in those agreements.

The PIL has sought direction to the Centre to frame model pacts for builders and agent buyers to protect customers and bring in transparency in the realty sector in line with the Real Estate Regulatory Authority (RERA) Act, 2016.

The plea, which was filed in October last year, has also sought a direction to all states to enforce the ‘Model Builder Buyer Agreement’ and ‘Model Agent Buyer Agreement’ and to take steps to avoid “mental, physical and financial injury” to customers.

Due to deliberate excessive delays in possession, real estate customers are not only suffering mental and financial injury but also a brazen violation of their right to life and livelihood stated the PIL filed through advocate Ashwani Kumar Dubey.

“Builders issue revised delivery schedules again and again and adopt arbitrary unfair restrictive trade practices. All this amounts to criminal conspiracy, fraud, cheating, criminal breach of trust, dishonestly inducing delivery of the property, dishonest misappropriation of property, and violation of corporate laws,” said the plea.

It contended that many developers across the country still follow a common practice of pre-launching a project without securing requisite approvals from the authorities and term it “soft launch” or “pre-launch”, thus openly violating the law, but no action has been taken against any builder till date.

It has also sought directions to compensate the buyers for losses incurred due to inordinate delays on the part of promoters-builders and to recover their money.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express Telegram Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.