Homebuyers pen letter to PM: After 10 yrs, objectives of RERA ‘far from being achieved’

Why in the News

Ten years of the Real Estate (Regulation and Development) Act, 2016 (RERA) have brought a growing number of housing projects under registration, but its goal of protecting homebuyers remains “far from being achieved”. The Forum for People’s Collective Efforts (FPCE), one of the campaigners behind the law, has written to the Prime Minister seeking a split in the regulator’s mandate.

What is RERA, and what was it meant to fix?

1. What it is: RERA set up the Real Estate Regulatory Authority in 2016 to oversee housing projects and their builders, called promoters. It works like a referee between homebuyer and builder.
2. Why it was introduced: It was meant to end malpractices such as the misuse of homebuyers’ money, one sided buyer seller agreements and project delays.
3. What it achieved: The law has brought a large number of projects under registration and made builders meet important disclosure requirements.
4. What went wrong: The forum says the malpractices continue, and homebuyers still struggle to obtain effective remedies.
5. The takeaway: A family that has put its lifetime savings into a flat needs a completed home and enforceable rights, not merely a project registration number.

Why does the forum blame RERA’s design?

1. Conflicting mandate: The forum names the primary cause as the Authority’s two conflicting jobs, promoting the sector and protecting homebuyers.
2. Why the conflict matters: A body charged with helping the sector grow has less reason to act hard against builders, so protection of buyers becomes the weaker task.
3. Weak scrutiny at registration: The forum repeatedly told ministry officials at Central Advisory Council (CAC) meetings that projects were registered without proper checks of documents, promoter declarations or agreements for sale.
4. Wrong measure of success: The FPCE president wrote that counting registrations and disclosures cannot prove success when builders keep violating the law.

What overhaul does the forum propose?

1. Promotion with the Housing Ministry: The Housing Ministry would continue to look after the promotion of the real estate sector.
2. Protection with Consumer Affairs: The Department of Consumer Affairs would take sole responsibility for protecting homebuyers’ interests.
3. One job per authority: Each department would then answer for one goal only, removing the clash the forum sees inside a single regulator.

Challenges

1. Registration without checks: Registering projects without verifying documents lets a flawed project carry an official registration number.
2. Remedies out of reach: Buyers facing delays or misuse of money still struggle to obtain effective remedies, so the law’s protection is hard to enforce.
3. Overlapping authorities: Splitting promotion and protection across two departments could leave builders answering to two bodies with overlapping demands.

Way Forward

1. Scrutiny before registration: Regulators should verify documents, promoter declarations and agreements for sale before registering a project.
2. Examine the mandate split: The Union government should examine the proposal to give the Department of Consumer Affairs sole charge of homebuyer protection.
3. Outcome based review: RERA’s record should be judged by homes delivered on time and complaints resolved, not by projects registered.

Conclusion

RERA has worked as a registration system but not yet as a protection system, because one regulator is asked both to promote and to police the sector. Whether the Centre acts on the call to separate those roles will decide if the law’s second decade delivers homes rather than registration numbers.

Back2Basics: Real Estate Regulatory Authorities

1. State regulators: Each State notifies its own Real Estate Regulatory Authority under the Act. There is no single national regulator.
2. Scope: The Authorities regulate ongoing and new projects. In most States the law does not apply retrospectively to fully completed projects.
3. Dispute route: Complaints go to the State Authority and its Adjudicating Officer, with appeals to the State level Real Estate Appellate Tribunal.

Matching Previous Year Question

“No direct PYQ traced in the provided files. Thematic PYQ: [2015, GS2, 12.5 marks] For achieving the desired objectives, it is necessary to ensure that the regulatory institutions remain independent and autonomous. Discuss in the light of the experiences in recent past.”