Protection of Home buyers: Real Estate Regulation Development Act, 2016

Residential Real Estate sector in the country has been mainly assertive by rising disposable income, a rapid growth in the middle class, low interest rates, fiscal incentives on interest and principal payment of loans, customer expectations and a rise in urbanization and growing nuclear families. The Said sector was said to be highly unregulated and had laws such as Transfer of Property Act, The Land Revenue acts, The Indian Contract act 1872 there was no sufficient legislation for the Consumers in this Sector Residential Real Estate Sector is all about basic necessities of life such food, clothes & Shelter. Home-Buyers invest their hard earned money in Residential Projects and get exploited by the Developers, Promoters and Real Estate agents. Builders and promoters had an uncertain policy about the property which is to be sold to a common man i.e Home buyers, and they used their schemes to fool the Home buyers. There was no clear picture of project, possession, sanctions, legality and rates which lead to frauds and confusions to the consumers. They took the undue advantage because there was no clear legislation to govern this real estate sector. The Consumer Protection act, 1986 and the Indian Contract Act, 1872 were not sufficient enough to protect the Home-buyers.

The parliament passed the Real Estate Regulation Development Act, 2016. The main aim of RERA is to provide relief to the consumers from the malpractices of the builders, promoters & Real estate agents. RERA and the government's model code seek to make property transactions more equal and fair for both sellers and buyers, particularly in the primary market and that RERA would make real estate purchases easier by increasing accountability and transparency, provided that states do not dilute the central act's provisions and spirit. The Act would provide the Indian government with a number of benefits. Now this act establishes an adjudicating mechanism for speedy dispute Redressal and also establishes the appellate tribunal to hear appeals from the decisions, directions or orders of the Real estate regulatory authority which will lessen the burden of the courts. The main advantage of RERA in protection of the Consumers or Investors are: Standardized Carpet Area, Rate Of Interest on Default Reduces the Risk of Builders In case of Insolvency/Bankruptcy, Buyer’s Right in an event of false promise, Advance Payment Buyers Right in case of Delay of possession, Buyers Right in case of Defect after possession Rights of the buyer in case of defect in title, Right to information, Registration of real estate agents & lastly Establishment of Authority for Grievance Redressal.

Though the act is very new it has still made an impact on the real estate sector, As it imposes a number of obligations to the builder that he has to complete before selling it to the consumers. The RERA Act has fulfilled it role and gives efficient protection to the consumers from the hands of the builders and real estate agents and has casted a lot of accountability on them. Thus the RERA act of 2016 is the first act to govern and state about the Real estate agents in this sector. The act has been through and is still going through some rough faces as it faced demonetization, GST and now COVID-19. The implementation of the act poses a big challenge as many more states should notify their rules and establish their regulatory tribunal. RERA has brought some milestone changes regarding the laws in the real estate sector of the country.

Mohammed Aamir Hussain Phato, Advocate

Kamal & Co. Advocates Solicitors