Rera's Way Forward In 2018!!

One of the major concerns raised by developers is that RERA, while covering ongoing projects, is trying to regulate in a retrospective manner, prompting some developers to challenge the constitutional validity of RERA itself

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The Real Estate (Regulation and Development) Act, 2016 (“RERA”) which came into effect on May 1, 2017 had at its heart the interest of home buyers while balancing the interests of all stakeholders in the real estate space. The onus has thereafter been on enforcement agencies to ensure that RERA is strictly enforced in the same spirit in which it was drafted, which depends on the timely delivery of homes to buyers and not on the amount of penalties and levies imposed or collected from promoters/developers or the amount of interest provided to buyers or how many registrations got canceled.

As per the records shared by the Ministry of Housing and Urban Affairs, about 20,000 projects have been registered under RERA in the past 6 months. While a section of real estate developers has started using the registration under RERA even as a marketing strategy, others appear to be still shying away in view of the penal provisions of RERA.

One of the major concerns raised by developers is that RERA, while covering ongoing projects, is trying to regulate in a retrospective manner, which has also prompted some developers to challenge the constitutional validity of RERA itself.

Upholding the validity of RERA as a beneficial legislation, the High Court of Maharashtra in a recent judgment of D. B. Realty & Another has observed that the act of providing the proposed date for the completion of ongoing projects is a voluntary act by a developer, and as such, the provision gives a fair chance to developers to provide a date of completion of the project which could be different from the date as provided in existing contracts. It also gives teeth and discretion to the Regulator to review the time proposed by a developer (from a perspective of buyer’s benefit) to either grant or reject the proposal of the developer.