NK SINGH
Real Estate Regulatory Authority, when it came
into existence a year ago, was touted as the light at the end
of the tunnel for those who had been robbed of their lifetime’s earnings
by unscrupulous builders. The lawmakers armed it with enough teeth to
penalise errant developers.
Its primary aim was to protect consumers’ interest by
ensuring accountability of builders, infuse transparency, reduce
frauds and delays and establish regulatory mechanism. The
corollary was to promote growth of a stressed real estate sector by
restoring investors’ confidence.
One year down the line, RERA has belied the
consumers’ hopes. Home buyers are disillusioned. Madhya Pradesh
was among the pioneering States that armed RERA with
enough teeth. However, the regulatory authority’s decisions over the past year
failed to inspire confidence among the consumers.
A study of some cases from Indore is revealing. In 20 cases, RERA asked builders to refund money to
buyers with 10 per cent interest, but none of them complied, including a
particular builder found guilty in 10 cases!
A
65-year-old retired post office employee from Indore paid Rs 19
lakh to a builder against the agreed price of Rs 17.60 lakh
in 2014 for a flat that was never
delivered. Eight months and many hearings later, RERA asked the builder to refund the
money with 10 percent interest. It also imposed a paltry penalty of Rs
5,000. The builder cares two hoots.
Another Indore builder
sold 700 plots in 2008, promising possession within two years. A decade
later, only 250 plots were developed. Thirty investors went to RERA, asking for refunds. RERA refused. It
simply levied a fine of 90 paise per sq feet
for the delay. The builder had been charging a penal interest of
24 percent from buyers for delay.
A petty shopkeeper from Indore took Rs 11 lakh bank loan in 2013 to buy a
flat. He has paid Rs 13 lakh to the bank and the builder, who promised
possession in 2015. The builder remained absent
on eight successive hearings in RERA! Yet, RERA imposed on him a
fine of just Rs 5,000. It also asked him to refund money with 9
percent interest, which he failed to do.
Another example of RERA being
soft on builders is its recent order in a case filed against the
Gammon project at Bhopal. A
buyer complained that although she paid 90
per cent of the sale consideration in 2015 itself, the builder kept
indefinitely delaying the project.
In a declaration filed
before RERA, Gammon itself admitted that its project would
be completed by June 2019. That, however, did not prevent the builder from
demanding full payment plus 20 per cent extra charges from the buyer in 2017 - two
years ahead of promised completion date! It also slapped the buyer with 24
percent interest for the period the builder himself delayed the project.
She demanded delivery of her flat and
interest for the period of delay. RERA ordered "delivery by
December 2017", but failed to instruct the builder to
execute delivery!
RERA also failed to
investigate the “unjust” charges levied by the builder, like Rs one
lakh and Rs 75,000 for providing electricity and water connection
respectively. Normal charges under these heads
are Rs 20,000 to Rs 5,000.
Most
remarkable was the figure of Rs 3.15 crore collected
by Gammon from buyers for forming a society. This service comes
from the Registrar of Firms and Societies at just one-time fee
of Rs 3,500. RERA legalised that
too!
RERA gave a small relief to the
complainant - reducing development charges from Rs 279
to Rs 111 per sq ft.
The relief was, however, not extended to all buyers, but to only
those who go into litigation against the builder.
Can RERA save one buyer and allow the remaining to be
charged unfairly? Same happened in matter of possession - it was
ordered just for this petitioner. If something
is patently unjust, is not it RERA’s duty to put a
blanket order out?
A retired, high-profile public servant
invested her lifetime’s earnings in a project of MP Housing Board at Bhopal. She booked the flat in 2010. Construction started in
2013 and delivery was promised within three years. It is yet to
be completed.
She petitioned RERA,
demanding interest for the delay. After hearing the case for months, and
several postponements, final arguments took place last
January. Even after four months RERA just sits on the order.
With such examples piling up, RERA is fast losing its credibility
among buyers.
Is that the reason why MP RERA is facing censure from other government
authorities? Many of its rules are being curtailed or amended by
administrative heads of departments of Revenue, Registration and Urban
Development.
It seems the lofty and righteous status
that the institution deserved is already lost.
Powers That Be, my column in DB Post of 19 May 2018
nksexpress@gmail.com
Tweets @nksexpress
Thanks for the information. Real Estate describes the built environment without which the businesses and society cannot function. The residential and commercial sub-divisions of the Real estate sector is covered under the Real Estate (Regulation & Development) Act, 2016. The aim of RERA Act is to protect the rights and interests of the consumers and to promote uniformity and standardization of business practices and transactions in the Real Estate sector. It also attempts to balance the interest of buyers and promoters by imposing certain duties on both of them and seeks to establish symmetry of information between buyer and promoter.
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