Implementation Status of the RERA

Share

Implementation status of the Real Estate (Regulation and Development) Act, 2016 (RERA)

05 May 2017

Introduction

The Parliament of India enacted RERA in 2016 to promote and regulate the real estate sector and to protect the interests of the consumers in that sector. All the sections of RERA have come into force from 1 May 2017, and state governments are required to take steps to implement the provisions.

Main requirements under RERA

RERA provides for various measures that an “appropriate government” can undertake for the regulation of the real estate sector. The primary objective of enacting this law is to protect the interests of the buyers in the sector. RERA defines the term “appropriate government” as (a) state governments for the states, (b) Central Government for the union territories without legislature, (c) government of Puducherry and the Central Ministry of Urban Development for Puducherry and Delhi respectively. The key provisions of RERA are as follows:

  1. .
    The appropriate governments are required to make rules by way of notification for carrying out the provisions of RERA within six months of the commencement of the act.
  2. The appropriate governments need to establish a Real Estate Regulatory Authority (Real Estate Authority) to perform various functions assigned to it under RERA within one year from the date of RERA coming into force. The appropriate governments also need to appoint a chairperson and members of the Real Estate Authority.
  3. The promoters or developers of any proposed real estate projects are required to register their projects in any planning area with the Real Estate Authority. The promoters also need to register their ongoing projects with the Real Estate Authority within three months of the commencement of RERA.
  4. The Real Estate Authority is required to make regulations in relation to its functioning and to carry out the purposes of RERA within three months of its establishment.
  5. The real estate agents engaged in the facilitation of sale or purchase of any plot, apartment or building in a real estate project are required to get themselves registered with the Real Estate Authority.
  6. The promoters or developers of the real estate projects registered with the Real Estate Authority are required to create their web page on the website of the Real Estate Authority, providing information related to the real estate project for public viewing.
  7. The Real Estate Authority is required to appoint an adjudicating officer in consultation with the appropriate governments. Such adjudicating officer will be empowered to adjudicate disputes that are referred to it under RERA.
  8. The appropriate governments will also be required to establish the Real Estate Appellate Tribunal (Appellate Tribunal) within one year from the date of RERA coming into force. Any person aggrieved by the order of the Real Estate Authority or the adjudicating officer may appeal to the Appellate Tribunal.
  9. The appropriate governments also need to appoint a chairperson, who will be a sitting or a retired judge of the High Court, and members of the Appellate Tribunal. There will be at least one judicial member and one administrative/technical member in the

Appellate Tribunal.

The appropriate governments are required to constitute the Real Estate Regulatory Fund wherein all the Government grants received by a Real Estate Authority and fees received under the provisions of the RERA will be credited.

Implementation status of RERA

(a) Framing of rules by the appropriate governments

  • After notification of RERA, the appropriate governments for (i) Andhra Pradesh, (ii) Andaman and Nicobar Islands, (iii) Bihar, (iv) Chandigarh, (v) Chhattisgarh, (vi) Dadra and Nagar Haveli, (vii) Daman and Diu, (viii) Delhi, (ix) Gujarat, (x) Lakshadweep, (xi) Madhya Pradesh, (xii) Maharashtra, (xiii) Odisha, (xiv) Rajasthan, (xv) Uttarakhand and (xvi) Uttar Pradesh have already made rules for the implementation of RERA.
  • Other appropriate governments are still in the process of notifying the rules under RERA.

(b) Establishment of the Real Estate Authority

  • The governments of Madhya Pradesh and Maharashtra have established the Real Estate Authority for their respective states. However, other appropriate governments have not yet established the Real Estate Authority.
  • Under RERA, the appropriate governments are empowered to designate any regulatory authority or any officer of the department dealing with housing as the Real Estate Authority until the establishment of the Real Estate Authority. The following appropriate governments have designated the officers of the regulatory authority or the state urban development and housing department to act as the Real Estate Authority for the time being:
  1. For Delhi, Central Ministry of Urban Development has designated Vice Chairman of the Delhi Development Authority as the Real Estate Authority.
  2. The government of Rajasthan has designated the Additional Chief Secretary to the Government, Department of Urban Development and Housing, as the Real Estate Authority.
  3. The government of Bihar has designated the Principal Secretary, Urban Development and Housing Department of the State, as the Real Estate Authority.
  4. The government of Bihar has designated the Principal Secretary, Urban Development and Housing Department of the State, as the Real Estate Authority.
  5. The government of Punjab has designated the Principal Secretary, Urban Development and Housing Department of the State, as the Real Estate Authority.
  6. The Ministry of Housing and Urban Poverty Alleviation, Central Government, has designated Principal Secretary, Urban Development, Andaman and Nicobar Administration, as the Real Estate Authority.
  7. The government of Puducherry has designated the Secretary to the Government (housing), as the Real Estate Authority.

(c) Registration of real estate projects with the Real Estate Authority

  • Registration of real estate projects with the Real Estate Authority is not possible at present as most of the appropriate governments have not yet established the Real Estate Authority.
  • The appropriate governments were required to establish the Real Estate Authority by 30 April 2017, and the establishment and commencement of the functioning of various Real Estate Authorities can be expected soon.

(d) Framing of regulations by the Real Estate Authority

  • As most of the Real Estate Authorities are not fully established and functional, the regulations are yet to be made by them as required under the provisions of RERA.
  • The Real Estate Authority of Maharashtra has framed its regulations.

(e) Registration of real estate agents with the Real Estate Authority

  • The process of registration of real estate agents with the Real Estate Authority has not yet commenced as the Real Estate Authority in most states and union territories is not functional.

(f) Website of the Real Estate Authority

  • Currently, the websites of the Real Estate Authorities, except for the state of Madhya Pradesh, are not yet functional.

(g) Appointment of the adjudicating officer

  • The adjudicating officers, for adjudication of claims of the buyers against the promoters or developers, have not yet been appointed by the Real Estate Authorities.

(h) Establishment of the Appellate Tribunal

  • The appropriate governments, in most states and union territories, have not yet established the Appellate Tribunal.
  • Under RERA, the appropriate governments are empowered to designate any appellate tribunal, functioning under any law for the time being in force, as the Appellate Tribunal until the establishment of the Appellate Tribunal. The following appropriate governments have designated other tribunals as the Appellate Tribunal for the time being:
  1. The government of Bihar has designated the Bihar Appellate Tribunal as the Appellate Tribunal under RERA.
  2. The Ministry of Housing and Urban Poverty Alleviation, Central Government, has designated Value Added Tax Tribunal as the Appellate Tribunal under RERA.
  3. The government of Haryana has designated the Tribunal constituted under section 12C of the Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Act, 1963, as the Appellate Tribunal under RERA.
  4. The government of Punjab has designated the Education Tribunal, Punjab, as the Appellate Tribunal under RERA.

(i) Constitution of the Real Estate Regulatory Fund

  • The appropriate governments are yet to constitute the Real Estate Regulatory Fund.

Implications

In the absence of notification of rules by the appropriate governments, effective implementation of the RERA is not possible.

Without the establishment and functioning of the Real Estate Authority, the promoters will not be able to register their real estate projects and the information related to these projects will not be available for public viewing.

Real estate agents cannot register themselves until the establishment of the Real Estate Authorities.

The adjudication mechanism for adjudging cases related to compensation to buyers from the promoters in the real estate projects is ineffective until the appointment of adjudicating officers.