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Home / Politics / Policy /  More power to the home buyer, thanks to SC's RERA order

The Supreme Court in its judgment last week suggested some changes in the Real Estate Regulatory Authority Act (RERA) to protect the interests of homebuyers. The ruling may force changes in state rules modelled on this Act. Mint explains:

What are the broad contours of the ruling?

The apex court held that RERA is retroactive in its application and covers all projects for which completion certificates were not issued at the time of the Act’s implementation. The ruling has reaffirmed the jurisdiction of RERA on all projects that were ongoing when the law was getting enacted. Many states which diluted RERA provisions may now have to amend the regulations to ensure that all ongoing projects get covered under the Act. State authorities will now have to include and perhaps take action against such projects that have enjoyed exemption from RERA so far.

What else did the court say?

The Supreme Court made it mandatory for developers to deposit at least 30% of the penalty ordered by the regulator before they challenge any RERA order and file an appeal under Section 43(5). In many cases, builders would often challenge a RERA order before a high court, and the resultant long-winded legal procedure would leave homebuyers waiting for a resolution. The ruling could prove to be a deterrent for such builders, who will now have to deposit the full compensation and interest as a pre-condition. Going forward, this may ensure that only genuine appeals by developers are filed.

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Are refunds to the allottee an issue?

The top court ruled that RERA has exclusive jurisdiction to direct refund of the amount, and interest on the refund, or direct payment of interest for delayed delivery of possession, or penalty and interest, to the allottee. But the adjudication for determining compensation and interest lies with the adjudicating authority to expedite the process.

What does it mean for homebuyers?

Homebuyers under the Forum for People’s Collective Efforts (FPCE) and other organizations have long been highlighting the dilutions of RERA regulations in various states, after the RERA Act was notified on 1 May 2016. The ruling will bring relief on various fronts for buyers, including creating a uniform regulatory framework for all projects, and creating better grievance redressal. In cases where RERA has imposed a penalty, buyers will get a faster resolution as builders will have to pay a pre-deposit  before  challenging  an  order.

What does it mean for developers?

The ruling affirmed the interests of homebuyers, to protect their rights, and tells developers to conform to the RERA provisions. Making RERA retroactive means developers will have to apply to the authority for the registration of their projects, that were ongoing during the commencement of the Act and for which the completion certificate was not issued. Builders in general, who in recent years have appealed against RERA orders will have to take a hard look at cases where they really want to challenge the order.

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