The Real Estate Regulation & Development Act 2016 (RERA) has, for the first time, empowered consumers and made a beginning in terms of effectively protecting the biggest investment that most Indians make. This is definitely a huge step in the area of real estate but it is still a “work in progress”.
Speaking about the Act at Moneylife Foundation on Saturday, Ms. Varsha Raut, of the Mumbai Grahak Panchayat said, “RERA is a gift to the consumer. Now the ball is in our court and we can make the most out of it by keeping a watchful eye. I think people should not be hasty in purchasing flats right now. Wait for two months (which is the time given for registration under RERA), and if you see any malpractice or anything suspicious then one must not hesitate in approaching the Mumbai Grahak Panchayat or just complaining to MahaRERA.”
There is a huge interest in understanding RERA and Ms Raut addressed a packed hall. Ms Raut, who has been an activist for 30 years, focused on consumer protection issues in the act such as timely completion, delivery, payments, possession and promise vs delivery. She said, “There is a difference between a consumer and a customer. A customer does not necessarily have specific knowledge about her rights, but a consumer is supposed to be aware and should fight for his/her rights. RERA is a proof that the consumer has finally been acknowledged”
Highlighting the features of RERA she said, “The registration requirement under RERA is definitely one of the most important features of the act. An on-going project needs to register within 3 months of the commencement of the act and a new project cannot even advertise, market or sell apartments until it has registered and submitted all documents and permissions that are required to develop the property”.
False or misleading advertisement as well as promising misleading services can lead to revocation of registration. She further explained to the audience of the consequences of revocation on registration.
Briefing the audience about the application process, she said, “personal information of the promoter, the details of all his projects in the past 5 years including the status of these projects, the proforma of the allotment, the sanctioned plan, layout plan and even the specifications of the proposed projects are a few things that are expected from the promoters”.
She further said that the “promoter is responsible to the consumer for all legal obligations and services till the conveyance is granted and handed over to a registered society of flat owners. Until then, the promoter is accountable to the consumer for all incorrect or false statements made to the consumer and may have to return the entire investment with interest (at such rate as may be prescribed) with the compensation.
In case of structural defects, she informed that it was necessary to bring to the notice of the promoter within a period of five years from the date of handling over the possession.
As regards the rights and duties of every allotee, she said that it was the right of every allotee to obtain information about the project i.e., construction schedule, date of completion as well as knowledge about the amenities agreed to be provided. It was the duty of every allotee to make timely payments in the manner specified in the agreement and to participate in the formation of a society and to register for the conveyance deed.
Interestingly, the first regulatory action under MahaRERA was initiated on the basis of Ms Raut’s complaint about a misleading advertisement by real estate brokerage firm Sai Estate Consultant under 'unfair trade practice.' The firm was called for a hearing and a penalty of Rs 1.2 lakhs was imposed on the firm. It has also been asked to rectify hoardings with a sticker that says it is being done under directions from MahaRERA .
“RERA is an act with a long term vision and I know it will be close to our hearts as real estate is a special and important topic for all of us. The fight is not over though and so we must stay vigilant and take action against what is wrong”, an important message from Ms Raut.