7 Years of RERA: Building Trust, Transparency & Transformation in Real Estate

The Real Estate (Regulation and Development) Act 2016, commonly known as RERA, has indeed been a significant milestone in the regulation of the real estate sector. Over the past 7 years, RERA has played a crucial role in bringing transparency, accountability, and fairness to the real estate market, benefiting both homebuyers and developers. As we step into the 8 years of its implementation, let’s continue to work towards ensuring the goals of RERA are met and that the real estate sector continues to thrive in a regulated and ethical environment. Following are discussed in this Article –

1. Notable Achievements of RERA over 7 years

2. Pro-active steps / Efforts of RERA Authorities

3. Central Advisory Council Meetings and action plans

4. RERA Workshops by Government of India

5. Detailed Report and Action plans for Stalled Legacy Projects

6. RERA Implementation Status – PAN India

7. Support needed for better implementation and growth of the Real Estate Industry.

Over 7 years RERA has significantly improved the regulatory framework governing the real estate sector in India, leading to greater transparency, accountability, and consumer protection. Its implementation has contributed to the overall growth and development of the real estate market while safeguarding the interests of homebuyers.

The Real Estate (Regulation and Development) Act (RERA) has brought about several notable achievements in India since its implementation –

1. Transparency: RERA mandates that all real estate projects (both residential and commercial) must be registered with the regulatory authority. This requirement ensures that all project details, including approvals, timelines, and financial aspects, are disclosed to potential buyers transparently.

2. Accountability: Developers are required to adhere to strict timelines for project completion as per the commitments made in the registered plans. Any delays or deviations must be adequately justified and compensated to homebuyers, fostering accountability in project execution.

3. Consumer Protection: One of the primary objectives of RERA is to protect the interests of homebuyers. The Act establishes clear guidelines for developers regarding project specifications, quality of construction, and possession timelines, reducing instances of fraud and malpractices.

4. Dispute Resolution: RERA provides for the establishment of Real Estate Regulatory Authorities (RERAs) at the state level to adjudicate disputes between developers and homebuyers quickly and efficiently. This mechanism ensures timely resolution of grievances, enhancing consumer confidence in the real estate market.

5. Promotion of Fair Practices: RERA prohibits unfair trade practices and ensures that developers maintain transparency in advertising and marketing of real estate projects. This has led to a more ethical conduct within the industry, promoting fair competition and fostering trust among stakeholders.

6. Boost to Institutional Financing: With increased transparency and accountability, institutional investors and financial institutions have gained confidence in the real estate sector. This has led to greater availability of financing options for developers, facilitating timely project completion and delivery.

The proactive steps taken by RERA Authorities aim to promote transparency, accountability, and consumer protection in the real estate sector, thereby enhancing investor confidence and fostering sustainable growth, have taken the initiatives over 7 years –

1. Public Awareness Campaigns: RERA authorities conduct public awareness campaigns through various media channels, including newspapers, television, radio, and social media platforms. These campaigns aim to educate consumers about their rights and responsibilities under RERA and raise awareness about the importance of dealing with registered real estate projects and agents.

2. Workshops and Seminars: RERA authorities organize workshops, seminars, and training programs for developers, real estate agents, and homebuyers to familiarize them with the provisions of the Act. These events provide a platform for stakeholders to clarify doubts, share best practices, and understand the compliance requirements under RERA.

3. Online Portals and Help Desks: Many RERA authorities have developed user-friendly online portals and help desks to facilitate registration of real estate projects, filing of complaints, and accessing information related to RERA. These platforms enhance transparency and accessibility, making it easier for stakeholders to interact with the regulatory authority.

4. Capacity Building: RERA authorities invest in capacity building initiatives for their staff members to ensure efficient implementation and enforcement of the Act. Training programs cover various aspects of RERA, including legal provisions, technical standards, financial management, and dispute resolution mechanisms.

5. Monitoring and Compliance Enforcement: RERA authorities monitor the progress of registered real estate projects to ensure compliance with the timelines, quality standards, and financial disclosures specified under the Act. They conduct regular site inspections, review project documents, and take enforcement actions against non-compliant developers to maintain accountability and protect the interests of homebuyers.

6. Collaboration with Stakeholders: RERA authorities collaborate with various stakeholders, including government agencies, industry associations, consumer forums, and legal experts, to address challenges and foster a conducive regulatory environment. Such partnerships help in sharing knowledge, resources, and experiences to improve the effectiveness of RERA implementation.

7. Incentives for Compliance: Some RERA authorities offer incentives or recognition to developers who demonstrate compliance with RERA regulations, such as timely project delivery, adherence to quality standards, and transparent financial practices. These incentives encourage developers to prioritize RERA compliance and build trust among homebuyers.

The Central Advisory Council (CAC) is constituted under the provisions of the Real Estate (Regulation and Development) Act, 2016, to advise the central government on matters related to the implementation of the Act and the real estate sector in general. Section 41 of the Real Estate Regulation & Development Act, 2016 provides for the constitution and composition of the CAC. Central Government has established Central Advisory Council (CAC) vide notification no.  O-17024/429/2017-H dated 20th November 2017.

Here are some of the key actions and functions of the CAC –

1. Policy Recommendations: The CAC advises the central government on policy matters concerning the real estate sector, including regulatory frameworks, procedural reforms, and industry best practices. It provides recommendations to promote transparency, efficiency, and investor confidence in the sector.

2. Guidance on Rules and Regulations: The CAC assists in the formulation and revision of rules, regulations, and guidelines under the RERA Act. It provides inputs on drafting provisions, interpreting legal clauses, and addressing practical challenges in the implementation of the Act at the national level.

3. Monitoring Implementation: The CAC monitors the implementation of the RERA Act across different states and union territories to ensure uniformity and consistency in regulatory enforcement. It reviews the performance of Real Estate Regulatory Authorities (RERAs) and advises on measures to strengthen their capacity and effectiveness.

4. Stakeholder Consultation: The CAC facilitates consultations with various stakeholders, including industry representatives, consumer groups, government agencies, and legal experts. It seeks feedback on the functioning of RERAs, emerging trends in the real estate market, and areas requiring regulatory intervention.

5. Capacity Building: The CAC supports capacity-building initiatives for RERA officials, developers, real estate agents, and homebuyers through training programs, workshops, and knowledge-sharing sessions. It promotes awareness about RERA provisions, compliance requirements, and dispute resolution mechanisms among stakeholders.

6. Research and Analysis: The CAC conducts research and analysis on issues relevant to the real estate sector, such as housing affordability, land acquisition, financing mechanisms, and urban development policies. It provides insights and recommendations to address systemic challenges and promote sustainable growth in the sector.

* minutes of the meeting can be downloaded from – https://mohua.gov.in/cms/notifications.php

RERA Workshops has conducted on all four regions on 2^nd year of implementation of RERA tilted RERA- a New Era of Transparency and Accountability in Real Estate- 2 Years of Implementation – North, South, East and West – details are available and can be downloaded from https://mohua.gov.in/cms/rera-workshops.php

Legacy stalled real estate projects have become a persistent challenge in many regions, casting a shadow over the real estate sector’s growth and impacting both developers and homebuyers alike. These projects, often marred by a combination of financial, regulatory, and operational issues, remain incomplete, leaving behind a trail of unfinished structures and unfulfilled promises. For developers, these stalled projects represent a drain on resources, tied up in investments with uncertain returns, while for homebuyers, they result in delayed possession, financial strain, and anxiety about the fate of their investments. The legacy of stalled projects underscores the need for concerted efforts from regulatory authorities, financial institutions, and industry stakeholders to address underlying issues, expedite resolution mechanisms, and restore confidence in the real estate market. Only through collaborative action and innovative solutions can these stalled projects be revived, ensuring that the sector moves forward with resilience and integrity, leaving behind a legacy of lessons learned and a commitment to better practices for the future.

The Ministry of Housing and Urban Affairs (MoHUA) had constituted a Committee under the Chairmanship of Shri Amitabh Kant, G 20 Sherpa (Ex-CEO, NITI Aayog) vide its Order No. O-17024/1059/2017-Housing Section-MHUPA Part (9)/EFS-9138424 dated – 31.03.2023 to examine all the issues related to legacy stalled Real Estate projects and suggest various ways to complete these legacy stalled projects.

The detailed report and minutes of the meetings of the committee can be downloaded from https://mohua.gov.in/upload/uploadfiles/files/report(1).pdf

PAN INDIA – Real Estate (Regulation & Development) Act, 2016 [RERA]

Implementation Progress Report – (as on 08-04-2024)

* source – https://mohua.gov.in/cms/implementation-status.php

All States/UTs have notified rules under RERA except Nagaland, which is under process to notify the rules.

1. 32 States/UTs have set up Real Estate Regulatory Authority (Regular – 27, Interim – 05). Ladakh, Meghalaya, Nagaland

2. and Sikkim are yet to establish Real Estate Regulatory Authority.

3. 28 States/UTs have set up Real Estate Appellate Tribunal (Regular -24, Interim – 04). Arunachal Pradesh, Jammu &

4. Kashmir, Ladakh, Meghalaya, Mizoram, Nagaland, Sikkim and West Bengal are yet to establish Appellate Tribunal.

5. Regulatory Authorities of 30 States/UTs have operationalized their websites under the provisions of RERA. Arunachal

6. Pradesh and Manipur are yet to operationalize.

7. 26 States/UTs have appointed Adjudicating Officer. 10 States/UTs i.e., Arunachal Pradesh, Bihar, Manipur, Meghalaya,

8. Nagaland, Sikkim, Uttarakhand, West Bengal, Jammu & Kashmir, Ladakh are yet to appoint Adjudicating Officer.

9. 1,24,739 Real Estate Projects and 87,212 Real Estate Agents have registered under RERA across the Country.

10. 1,21,966 Complaints have been disposed-off by the Real Estate Regulatory Authorities across the Country.

Un resolved / Support needed for better growth and certainty to all the stake holders –

1. Non-Registration of Projects and Agents: Despite the statutory requirement, some developers and real estate agents continue to operate without registering their projects or themselves under RERA. This non-compliance undermines the Act’s objectives of transparency, accountability, and consumer protection, necessitating stricter enforcement measures.

2. Consumer Awareness and Redressal Mechanisms: Despite efforts to raise awareness, many consumers remain unaware of their rights and the recourse available under RERA. Strengthening consumer education initiatives and improving accessibility to dispute resolution mechanisms are essential to empower homebuyers and ensure timely redressal of grievances.

3. Enforcing mandatory registration of Agreement of Salein accordance with local laws

4. Clarity on formation of Association of Allottees. Government to provide clear and uniform guidelines on the formation and functioning of the Association of Allottees. Appointment of Competent authority, framing the regulations, Standardized procedures, thresholds, and timelines can help streamline the process and ensure consistency across states.

5. Implementation of Section 17 of the RERA Act 2016– Conveyance of common Areas to the Association of the Allottees. All State Governments to frame the policy and implement how to convey the common Areas to the Association of the Allottees under Group Housing Schemes for the homebuyers to get the better title of the project land.

6. Enforcing financial discipline and strict utilisation of funds collected from the Homebuyers and financial institutions. There shall exist a mechanism to measure the utilisation of funds, periodical audit to ensure the funds are utilised for the projects only.

7. Recommendation and implementation for digitisation of Land Records will lead to more transparency, reduction in litigation, financial burden and lead to good practices under Real Estate Sector

8. Single Window Clearance Approvals will enable the speed and efficient way of delivering the projects by all stakeholders

9. Seamless availability of funds and financial assistance – government and banks should encourage, extend seamless funding to the real estate project will enable the project to be completed within time and available to the market.

10. Filling vacancy of Members, Chairpersons of Authority, Appellate without delay- Government shall fill the vacancy of Members, Chairpersons of Authority, Appellate without delay for continuous and effective functioning of RERA

In conclusion, the implementation of RERA over the past seven years marks a significant milestone in the evolution of the real estate sector in India. While challenges remain in achieving full compliance and addressing systemic issues, RERA has laid a strong foundation for promoting transparency, accountability, and fairness in real estate transactions. Looking ahead, continued collaboration between stakeholders, effective enforcement of regulations, and ongoing reforms will be essential to sustain the positive momentum and realize the full potential of RERA in shaping a vibrant and sustainable real estate market

The author CA.Vinay Thyagaraj, partner at M/s.Venu & Vinay, Chartered Accountants, he can be reached at [email protected]