In the period of economic boom, demand for residential and commercial real estate is surging at an exceeding pace but unfair trade practices become an unavoidable evil, which led todownward trend in the real estate sector. Amidst plunging sector and exploitation of consumers by the builders in India, it was high time for the Indian government to come up with a legislation to deal with the maladies of real estate sector. With the aim of regulation and promotion of real estate sector and protection of consumers’ interest in an efficient and transparent way, Government enacted the Real

Estate (Regulation and Development) Act, 2016 (“the Act”).

INTRODUCTION TO THE ACT

The Act is applicable to the whole of India except Jammu and Kashmir. It is well aimed to counter targeted and specific problems faced by the real estate sector earlier. The Act obligates creation of the State Real Estate Regulatory Authorities (“RERA”) and their appellate tribunals within a year of its enactment. Now, the procedure will be more transparent as, the projects with more than 500 sq.m. of area, 8 apartments or where completion certificate has not been obtained for the existing projects, will have to be registered with RERA. Also,details of the project and the promoters must also be submitted to the authorities, which will be publicly accessible. Even facilitators of the deal of sale and purchase must compulsorily be registered with RERA. Further, rights of the buyers also have been taken care of. For the same purpose, provision has been made for cancellation of the builder’s license in case of any unfair trade practice. For the purpose of protecting buyers money, provision has been made in the Act as per which, 70% of the amount received from sales is to be deposited in a separate account.On observing the problems faces by the buyers of delay in possession of flats, a provision has been added in the Act, as per which, money paid by the buyers for the project must be refunded if the buyer desires the withdraw himself. The Act further lays down the rights and duties of builder and buyers. The

builder must strictly put up with the sanctioned plan that will help to curb the problem of construction on unapproved layout land to a great extent. The Act authorizes RERA and appellate tribunals have been given the authority to adjudicate upon the matters related to real estate sector within a specified time frame. The same will help in the speedy delivery of justice and will protect the people from tedious process to resolve present earlier.

LACUNA IN THE ACT

Although, the Act is well framed, there exists a missing feature. In the system prevalent earlier, buyers brought disputes either before the consumer forum or competition tribunal (claiming unfair trade practices). Although provision has been made in the Act for transfer of cases from consumer forum to RERA, similar kind of provision is missing for the cases filed in the competition tribunal. Further, the 70% requirement might force the builders to shift to other modes of financing the project, which may, in turn, result in escalation of construction cost. Also, considering the Act as a protraction of the laws for consumer protections, there was no need for creation of the separate Act and the same should have been made a part of the Consumer Protection Act. Even Bentham said, “Single complete law should adequately express will of the legislature.”

CONCLUSION

Overall, by creating transparency, protecting consumers and providing a way for speedier trials, the Act will surely boost the confidence of the buyers and may result in boom in the real estate sector. The provisions of the Act will make the sector lot more organized and only serious builders will remain in the market. However, implementation of policies has always been bigger challenge than the enactment itself and it will be interesting to watch the Act function in the real market in coming few years.

-Dushyant Thakur