5 Years of RERA: Key Takeaways
RERA aimed to transform realty through standardisation, accountability and reassurance. Has it lived up to the promise?
On 1 May 2016, the RERA (Real Estate Regulation and Development) act became law in a landmark move that promised to transform India’s real estate sector. A little over fiver years into its existence is a good time to analyse the extent to which RERA has achieved its stated objectives.
Post enaction the law, all states and Union Territories were mandated to formulate and notify rules within six months, and set up RERA and launch the website within 12 months. These websites are meant to provide home buyers with information such as names and details of under-construction projects, names of developers and promoters, approvals, number and size of apartments, possession date, state RERA number of the project, RERA-registered agents, and so on. The website is also a medium for consumers to file complaints online.
Across India’s 28 states and 8 Union Territories, the implementation in letter and spirit remains uneven. Certain states are still operating with an interim regulatory authority, some are yet to establish an appellate tribunal while yet others have diluted the act at the state level and some states and UTs have not launched the website. Until these states fully rollout RERA, consumers there cannot benefit from the law.
A mechanism to speedily redress grievances and disputes is one of the most important consumer-facing sides of RERA. While latest all-India figures are unavailable, this report claims 67,534 complaints have been disposed of by RERA across the country as of 5 June 2021.
Maharashtra which was the first state to set up a conciliation committee to settle real estate disputes amicably under MahaRERA, reported a success rate of 75% since 2018 for the amicable conciliation of disputes between promoters and allottees, avoiding the need for litigation before RERA courts.
There are numerous reports, however, of unfulfilled complaints due to factors such as uneven application by states, non-execution of orders by developers partly due to insolvency proceedings, and time taken for dispute resolution. Until the law is implemented fully and equally by all states, home-buyers will be forced to turn to multiple authorities, RERA, district and high court.
Compliance and transparency
While the adoption of RERA has significantly weeded out the possibility of fraudulent practices by unscrupulous developers, it also increased compliance by reputable developers, helping them establish credibility among homebuyers. Many smaller developers, however, continue to remain outside the ambit of RERA. Until such time that all developers comply with the stated regulations and states rollout the act efficiently and without substantial watered-down application, overall implementation will remain unsatisfactory.
Transparency and accountability are among the greatest achievements of RERA. Initial apprehensions of real estate developers and other stakeholders soon gave way to RERA becoming the definitive guideline for regulations and standardisation with clear objectives for transparency and accountability. While developers can now be held accountable for their actions, homebuyers have begun to show more faith in the system.