Can RERA complaints be filed in the current environment?

With the strong Builder Lobby growing and looming over the property buyer, earlier viz prior to 2016 there were no standard procedure or norms being followed by the real estate developers, as a result a lot of malpractices were taking place. The Government, in a bid to curb these malpractices and to provide relief to the Home Buyers, introduced RERA

Meaning of RERA:

With the strong Builder Lobby growing and looming over the property buyer, earlier viz prior to 2016 there were no standard procedure or norms being followed by the real estate developers, as a result a lot of malpractices were taking place. The Government, in a bid to curb these malpractices and to provide relief to the Home Buyers, introduced RERA which stands for Real Estate Regulations Act in 2016 to protect the interests of the home buyers. RERA seeks to protect the interests of home buyers as well as to boost investments in the real estate sector. One of the most positive aspects of this Act is that it provides a unified legal regime for the purchase of flats; apartments, etc. It also seeks to standardise the practice across the country. 

The absence of a proper regulator (like the Securities Exchange Board of India for the capital markets) in the real estate sector, was long felt. This Act establishes Real Estate Regulatory Authority in each state and union territory. Its functions include protection of the interests of the stakeholders, accumulation of data at a designated repository as well as the creation of a robust grievance redressal system. To prevent time lags, the authority has been mandated to dispose off applications within a maximum period of 60 days; and the same may be extended only if a reason is recorded for the delay. Further, the Real Estate Appellate Authority (REAT) shall be the appropriate forum for appeals.

It provides a list of regulations to be followed by Builders and at the same time safeguards the rights of the property buyers. RERA has helped create Real Estate Authority and Appellate Tribunals for each state. Therefore, the Home Buyers, can redress their grievances, if any, to these authorities.

Lockdown setback:

With the enactment of this Act the Builder Lobby came under strict control and faced  stringent penalties for any violations made under RERA. However, that was in the normal circumstances where projects were going on with full manpower and without any restrictions over the normal functioning of work in the country.

With India going into a complete lockdown on account of the Corona Virus Pandemic from March 22nd 2020, the real Estate sector has suffered a lot of setbacks in terms of a shutdown of regular construction work  on  major projects. A lot of  construction sites have suspended work completely and severalprojects have been stalled. In this extremely stressful and adverse lockdown situation the Governments of various states are trying to find a way to resolve the manner in dealing with the existing RERA complaints and defaults in timelines, which were originally fixed prior to the lockdown. The Two apex bodies of real estate developers, that is, The Confederation of Real Estate Developers Association of India and the National Real Estate Development Council, have demanded for six months’ extension in view of the Corona Virus Pandemic to meet their deadlines for completion of the projects .

Some of the measures adopted:

Due to the dislocation or stalling of various real estate projects in view of the Corona Virus pandemic, the CREDAI and NAREDCO have requested the authority to extend the completion date on  the projects and have also put through the same to some other state RERAs. The call for social distancing amongst people in general as well as the restrictive measures over movement along with a complete halt over work due to the announcement of the nationwide lockdown  towards the end of the month of March has stopped quite a lot of real Estate projects. Therefore, currently the UP RERA Authority has decided to extend the date for completion of projects by three months  with the date of completion being, between 15 March 2020 and 31st December 2020. The revised registration certificate of such projects are going to be issued and later sent to the concern promoters.

The promoters have also requested for one-time debt restructuring along with  relief from regulatory authorities under  with regards to the extension of deadlines  for completion of  projects in other states as well. These requests are being considered on a Central level and some on a State level as well.A centralised guideline is still awaited on these issues till date. On 2nd April MAHA RERA announced for the extension of completion of the projects which were supposed to complete by 30th March 2020 for 3month, that istill 30th June 2020. There is no single penalty being charged for delaying the project completion. Effectively, the lockdown has also affected the supply chain due to the lack of construction material and workforce.

Relief to Builders:

In order to combat with the loss of time, special guidelines & regulatory measures for all real estate sectors including RERA would be issued soon for assisting with combating the current crisis situation. However, a few states have already announced  some relaxations which has provided much required respite to the Builder.  In addition to the  Builder Lobby,  the construction workers have also been  affected severely  since many of them have not been paid and are hence struggling to make ends meet. Keeping in mind the severity of the current situation, it is important for the Government to keep in mind the welfare of the workers as well as the interests of the Builders while drafting the new guidelines.  Nevertheless, the interests of the Home Buyers can also not be sidelined so as to ensure that no undue advantage can be taken of the situation  to dupe the home buyers/ property purchasers. The Builders have been specifically requested to take care of their labour force since their livelihoods has been hit to a very large extent due to the suspension of major projects.  In the meantime the Government is deliberating on the various guidelines in order to provide the most effective safeguards in this time of extreme stress and crisis.

Procedure for Property buyers:

The Home Buyers have to at this point in time be sensitive to the fact that this is a crisis situation even for the Builders, as they have had to stop work on account of the social distancing norms. Therefore, we cannot implement the extremely stringent deadline which were in place earlier but rather wait for the Government to release the Guidelines and regulatory measures instead. There is now a grace period being provided in and notified in certain states which needs to be made aware amongst the home buyers as well in order to avoid any misleading information. .  Once that timeline is fixed or revised then we will have to take those timelines into account before we initiate any action under RERA.

Even though we have been  hit by a pandemic and the Builders are bound to suffer the onslaught , they cannot take this as the sole excuse to not perform their duties and keeping this in mind it is necessary to reiterate that the rights of the buyers remain the same.  The considerations by the Government are time bound and not a blanket and hence  any delay after undertaking the time relaxation into consideration can be complained about, to the authorities. The Builders shall have to bear in mind that the current pandemic does not absolve them of the liability to deliver the finished product. It can at best considered as a temporary roadblock but nothing further.

Having said that one is yet to see how the story folds out once the authorities resume offices and work is normal.