RERA Is Not Just Good For Buyers, It's Great For Developers Too. Here's Why
Updated on February 9, 2017:
Following the reports of some states diluting provisions in the new real estate regulation law, the central government has forwarded such rules to a parliamentary committee for a review. In a reply to a question in Lok Sabha Minister of State for Housing and Urban Poverty Alleviation Rao Inderjit Singh said that the ministry has received representation from consumer groups, complaining that some states have reportedly diluted key provisions of the Act to favour developers.
"These rules have been notified by the states and forwarded to the Committee on Subordinate Legislation of the Rajya Sabha and the Lok Sabha for examination," he said.
The Real Estate (Regulation and Development) Act, 2016, which will help regulate the property market by bringing more transparency into the system, is being seen as a game-changer. A key reform measure, under the new law, real estate developers will have to divulge every small detail of their projects. Any repeat offence could cost developers dear, including a jail term of up to three years and fine or both.
Undoubtedly, it’s a delightful scenario for buyers. But, any right can’t be seen in isolation. A right is always accompanied by a duty. So, to make the law more holistic and transparent in its approach, there is one more dimension to it --- a home buyer too can be jailed, up to one year, if he fails to obey the orders of regulatory authorities or appellate tribunal.
Although buyers have panned the provision, saying that the law which has been framed to address the woes of homebuyers can’t have the provisions to bite them, lawmakers say any rule can’t be made lopsided.
But there are many homebuyers who rule that that the provision to put homebuyers too behind bars would be misused by all-powerful developers’ lobby to further harass buyers.
"This provision would turn out to be a deterrent for buyers who would think twice before moving the regulatory authority," said Mukesh Shah, a home buyer in Noida’s Sector 178.
However, experts point out that such a provision may not be invoked against buyers in most of the cases because largely home buyers would be the aggrieved parties who would be moving court for resolution of grievances against developers. The only case where a developer may move against a home buyer is non-payment of dues. “If someone is a genuine buyer, such an issue would never crop up,” said a real estate expert.
“Any payment default or bounced cheque etc by the buyer would be covered by the relevant provisions of existing laws. But the new Act achieves a balancing act between the rights of both transacting parties,” says lawyer Neha Mishra, currently Head of the Department at REVA University, Bengaluru.
While the bill is largely consumer-friendly, the penalty provision would give an equal footing to both parties, bringing greater accountability into the sector. “Honest buyers, of course, have nothing to fear. The law will give them an additional recourse against errant developers who could get around the existing laws. It is to plug the exploitation of current loopholes by the developers that the law has been framed,” adds Mishra.
Tags: Legal, property, developers, News And Views, makaaniq, RERA, 2016, Real Estate (Regulation and Development) Act, Noida’s Sector 178