With the Allahabad High Court rap to the District Magistrate of Gautam Budh Nagar over non-compliance of Recovery Certificate (RC) issued by the Real Estate Regulatory Authority (RERA), the focus has yet again shifted to the non-execution of RERA orders. The High Court was appalled to note that the RC was kept pending for two and half years. This is not just Gautam Budh Nagar reality that is home to the largest property market of India. RERA orders are being kept in suspension at the administrative level across the country.
The home buyers have for long alleged that the RERA has failed to provide them substantial relief in the wake of project delay or defaults. Now the Allahabad High Court has also taken cognizance of the issue and has not only questioned reasons of non-execution but also asked for the roadmap as to how RERA Recovery Certificates would be executed.
Advocate Nirmit Srivastav who appeared before the High Court in the given case agrees that even when the RERA judgment is secured in favour of the home buyers, the execution process more often than not defeats the very purpose. I specifically asked him whether this given order would be a warning signal to the District Administration across the country. The lawyer admits that in the absence of any powers to direct the Development Agencies and the District Administration, High Court is the only ray of hope. The question is how many harassed home buyers have the fiscal and legal bandwidth to knock the High Court.
It is hence no wonder that a pan-India survey by Track2Realty finds no less than 82% home buyers don’t find any tangible change on ground post RERA as far as the real estate ec0 system is concerned. 78% Indians have even maintained that their hopes to see RERA as a watchdog and custodian of due diligence has been dashed. Four years after its implementation, RERA still appears to be a work in progress. A section of home buyers have even called RERA as the “Battle of 1857” that could possibly help those who would fight in 1947.
What actually is defeating the purpose for which RERA was set up? Not one or two but there are multiple grey zones to keep RERA as a façade for helping the home buyers. Some of the glaring issues are:
Not a watchdog
RERA was initially envisaged to be a watchdog that could possibly take pre-emptive action against the builder. It was even suggested that RERA should have the power to cross check the credentials of the developer and if he has defaulted twice in the past, he should never get a new license. In a business where the entry barrier is non-existent, that should have also served as the qualitative entry barrier. RERA, as it turned out to be, has emerged as just another widow of litigation for the buyers. RERA only acts upon the complaints filed by the aggrieved home buyers.
No stamp of due diligence
“RERA Approved Project” is something that should have sounded like the sovereign guarantee for the home buyers. An average home buyer without knowledge of what all approvals, sanctions and/or financial viability makes a project complete, should have got the confidence that RERA approved means due diligence is done. Unfortunately, RERA turned out to be like another government agency distributing sanctions without any accountability or liability. Advertising brochures claiming “CREDAI Member” and “RERA Approved” are all the same for the home buyers.
Lack of infrastructure
To be fair with RERA, and it’s officiating members in particular, RERA in most of the States doesn’t even have the necessary infrastructure in place to verify the documents submitted by the builders. The home buyers who check RERA website for their own due diligence maintain that all project details uploaded by developers are scanned with 150 DPI. It is just not readable for the average home buyers. Unless someone files a specific complaint against a specific project, RERA officials don’t have infrastructure support to cross check and reject such uploads.
Connected parties not accountable
The development bodies of the government are not accountable to RERA; nor are they liable for their inaction that delays the project. Similarly, the banks that offer liberal lending without their share of due diligence are in no way accountable to RERA. If the project is stuck, the banks hound the home buyers and not the builders. Unless RERA has some judicial teeth to question the government agencies and the lending institutions, it cannot expedite the given project in case the builder has actually suffered due to procedural delays on part of the agencies.
Liberal in the name of project viability
RERA is not just for Real Estate Regulation but also Development and this dichotomy more often than not tilts RERA members to support the business. With retired bureaucrats serving as the RERA officiating members, in many of the cases the builders have been allowed to get arbitrary execution timelines extensions. Furthermore, despite the fact that RERA Act in principle empowers the home buyers to demand refund in the wake of delays, in reality buyers demand of refund is often turned down if the project is ready by the time the complaint is filed.
Orders being challenged and not executed
The most common grouse of the home buyers is that RERA is not a one-stop judicial solution. It’s orders are challenged by the builders before the Tribunal and then the Higher Courts. Since the average home buyers waiting for the home with dual burden of rent & EMI can’t fight a lengthy & expensive litigation, the builder has the last laugh and the buyers end up with compromise. Furthermore, the District Administration more often than not keeps the RERA orders of RC pending for more than two years. The Allahabad High Court was hence baffled with this inaction and rapped the District Magistrate of Gautam Budh Nagar.
It is hence no wonder that RERA fails to evoke the confidence of the home buyers. Unless RERA is empowered, turns out to be more pro-active, and any challenge to its orders are admitted in the Higher Courts only on technical merit, it is another window of litigation. The harassed home buyers who assumed that RERA would turn out to be the last mile litigation are hence wondering as to whose purpose is the regulatory body serving.
Ravi Sinha
@RaviTrack2Media
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless.
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