The Maharashtra Real Estate Regulatory Authority (MahaRERA) has sent notices to web portals like Magicbricks.com, 99acres.com, Makaan.com and Housing.com, asking them to explain why they have not registered themselves with the Authority. The notice says if these portals had registered, then they should inform the Authority of their registration numbers. These portals have sought time to reply to the notice. The case, which was initially heard by Dr Vijay Satbir Singh and BD Kapadnis, is now scheduled for next hearing on 29th August.
Mumbai Grahak Panchayat (MGP), a consumers’ body has demanded that all real estate web portals (REWPs) be registered with the MahaRERA since they facilitate sale and purchase of real estate plots and apartments, like any other housing agency. In a letter to MahaRERA Chairman Gautam Chatterjee, MGP has pointed out that such portals widely advertising real estate projects, are not registered with MahaRERA, under section 9 of the Real Estate (Regulation & Development) Act, 2016.
While these portals have claimed that they are not engaged in profit making activity and also do not collect any commission, MGP feels that their activities are like real estate agents (REA). “Such portals are REAs, as defined under section 9 (1) of the RERA 2016 which stipulates that “No real estate agent shall facilitate the sale or purchase of sale of plot, apartment or building, on behalf of any person. However these portals do facilitate the sale /purchase of plots and apartments and hence they are liable to register themselves as “REA,” MGP Chairman Advocate Shirish Deshpande said.
“As per section 2 (1) (ZM) of the RERA, 2016, a "real estate agent", is the one who negotiates or acts, with one person, in a transaction of transfer of his plot/ apartment/ building for sale, with another person and receives remuneration or fees or any other charges, whether as commission or otherwise. The provision includes a person who introduces, prospective buyers and sellers to each other for negotiation for sale or purchase of plot, apartment or building, as the case may be. It includes property dealers, brokers, and middlemen. The definition also includes a person who introduces, through any medium, prospective buyers and sellers to each other for negotiations. The term “any medium” used in this definition certainly includes real estate web portals, Adv Deshpande added.
Besides, rule 17 of MahaRERA clearly states that REA “shall provide assistance to enable the allottee and promoter of real estate project, to exercise their respective rights and fulfil their respective obligations at the time of marketing and selling of plots/ apartment and such portals are precisely performing this function, Adv Deshpande said.
MGP has based its complaint on the definition which specifically includes 'a person who introduces, through any medium, prospective buyers and sellers to each other for negotiation for sale or purchase of a plot, apartment or building'. "The term 'any medium' used in this definition certainly includes real estate web portals," he said.
In addition, the Parliament seeks to establish the accountability of two important players in the field viz. the promoters and the REAs with a view to regulate the real estate sector and thereby avoid any unfair trade practices. “We are of the considered view that all the real estate web portal companies operating in Maharashtra should be treated as REA and be directed by MahaRERA to register in compliance with Sec 9 (1) of RERA within next 60 days,” Adv Deshpande said.
In the meanwhile, MahaRERA has questioned the rationale behind the Union government's decision to treat homebuyers as financial creditors by empowering them to drag their builders to the National Company Law Tribunal (NCLT), saying that the move will dilute the RERA.
MahaRERA chief Gautam Chatterjee said that RERA should be the sole authority to redress consumer grievances in the realty space. “As a regulator, I feel that if the project is registered with the RERA, every problem that a consumer faces has to be resolved by RERA only,” Mr Chatterjee said.
MGP Chairman Deshpande also echoed similar views, saying it would have been better if the government empowered the RERA, since it is an exclusive law to deal with the real estate sector.
On 6 June 2018, President Ram Nath Kovind had promulgated the Insolvency and Bankruptcy Code (Amendment) Ordinance 2018 (IBC) that recognises homebuyers as financial creditors under the insolvency law. IHC seeks to give representation to homebuyers in the committee of creditors and make them an integral part of the resolution/decision-making process.
It is worth noting that Section 18 of RERA affords allottees the right to demand a refund of the entire amount advanced by them (along with interest at the prescribed rate). It also stipulates that the homebuyers be paid interest by the promoter/ developer for every month of delay till possession is handed over.