RERA and NCDRC Are Finally Coming to the Aid of Hapless Home-buyers
Six years after the Real Estate (Regulation and Development) Act (RERA) came into existence, a series of decisions is finally working in favour of home-owners. What is interesting, though, is that many positive orders have come from consumer courts rather than the realty regulator. But regulatory action from state regulators has also begun to gather momentum, especially after the pile up of adjudication cases has turned unmanageable because developers have been flouting the stringent safeguards and disclosure rules of RERA with impunity.
It is worth recollecting that RERA got off to a difficult start. It was already among the last of the sector-regulators to see the light of day due to resistance from the powerful builder lobby (comprising many politicians) which had thrived under opaque rules, unaccounted money and a plethora of murky, anti-customer practices. By the time a comprehensive and workable Central legislation was enacted and became fully operational in May 2017, the rot in the system was on the verge of exploding into the public domain in a series of large defaults. It led to bankruptcies of developers being resolved under another brand new law—the Insolvency and Bankruptcy Code.
Although RERA was passed in 2016, it became fully operational only in May 2017—the same year when the Maharashtra Real Estate Regulatory Authority (MahaRERA) came into existence. Since the law was applicable prospectively, it did not help those whose realty investments were already destroyed by defaulting builders.
Large realty companies such as Unitech, Supertech, Housing Development Infrastructure (HDIL), Dewan Housing Finance Ltd (DHFL), Jaypee Infratech and Amrapali group went bust just a year after the Act was passed and others like DS Kulkarni a little after. The collapse of Infrastructure Leasing & Financial Services (IL&FS) in July 2018, and Yes Bank soon after, wrought havoc in the financial system, exacerbating the woes of those who were locked into long-term equated monthly instalments (EMIs) with once-famous builders who had now gone bankrupt.
The past six years have been harrowing for home-buyers, who have had to approach every forum available for justice. Those who bought apartments of builders like Jaypee, Amrapali and Unitech took the fight to the Supreme Court of India (SC), because the newly promulgated bankruptcy Act threatened to leave them without a home, or to force them to keep paying EMIs without the prospect of ever getting an apartment. Others had to battle their way up the consumer court system to reach the national consumer disputes redressal commission (NCDRC). This has recently led to a series of positive orders from the apex consumer court in favour of home-buyers.
At the same time, the regulator is discovering that a disclosure-based regime will not work without tough supervision. This is especially true of Maharashtra. It was the first to set up a strong realty regulator in MahaRERA which got off to an impressive start in 2017. Over the past year, even as the backlog of adjudication cases have risen to nearly 5,000, MahaRERA has found developers flouting provisions of the Act with impunity causing it to step up investigation and regulatory action.
MahaRERA chairman Ajoy Mehta, who is also chairman All India Forum of Real Estate Regulatory Authorities, told me that the high number of adjudication proceedings cannot possibly be resolved in years and the better option was to go to the root cause of disputes. “When I hear adjudication case, I don't look at it as just issuing an order; I get a lot of feedback,” he said. For instance, MahaRERA found that developers were asking for cheques from home-buyers in two or three different bank accounts, or they had a single account for multiple projects which is a complete violation of the law. The regulator also discovered that developers were submitting false certificates, not uploading quarterly progress reports (QPRs), maintaining multiple accounts for the same projects, etc. Then there were projects stalled due to disputes which blocked funds and affected all stakeholders. Builders were also ignoring legally mandated completion deadlines without bothering to seek extension of time.
“This is why we decided to tighten our regulatory oversight and our regulatory wing has now become much bigger than the adjudication wing,” says Mr Mehta. It has led to a series of actions over the past few months which are widely reported by the media. Consider these actions:
  • June 2022: MahaRERA found that the state had over 4,500 ‘abandoned projects’ blocking Rs78,000 crore. Of these, the Mumbai metropolitan region, where real estate rates are among the highest in the world, accounted for 60% of such projects. Further, 2,800 projects, valued at Rs90,000 crore, had lapsed in the previous five years. Although the numbers are small compared to the 34,400 projects registered in that period, the regulator created a special vertical to mediate between stakeholders to resolve disputes and restart the projects, while also examining reports of financial misdeeds. Show-cause notices have also been issued to builders who have failed to adhere to completion deadlines without seeking an extension in time. At the same time, MahaRERA has asked developers’ bodies to join the mediation effort to revive the projects.
  • October 2022: MahaRERA suspended the registration of over 60 developers after the suburban municipal authorities of Kalyan-Dombivli had registered cases against 27 for forging and fabricating registration documents to dupe home-buyers into buying properties.
  • February 2023: MahaRERA has issued notices to 19,539 realty projects for failing to upload mandatory disclosures on its website. These include QPR, financial details certified by chartered accountants and architect’s certificates. It also identified 313 specific housing projects for discrepancies in expenditure statements and completion status.
  • March 2023: A key to financial discipline mandated by RERA is to maintain a separate designated bank account per project. MahaRERA has identified 1,781 projects having violated this requirement and served notices to them seeking details of flats sold, money received and receipts issued. They include some well-known names in the business.
The Uttar Pradesh real estate regulatory authority has also been proactive. It imposed a fine of Rs1.39 crore on 13 developers for non-compliance with its orders. In another action based on its orders, the Lucknow district administration plans to seize the properties of at least 26 builders to recover Rs132 crore paid by buyers who were not delivered homes and shops they had paid for.
NCDRC to the Rescue
While RERA authorities across India have turned active, individual home-buyers continue to look up to the consumer forums for relief and have managed a series of positive rulings in their favour. Here are some of them:
As heartening as these stories may appear, we must remember that each of these consumers has had to battle his/her way to the apex forum and the builder could still appeal to the SC. The creation of a sector regulator as well as individual state regulators was expected to provide swift remedies and do what MahaRERA is attempting—eliminating potential problems at source through stringent regulation and oversight. But that will require a sustained effort by consumer organisations at state levels to ensure their regulators act as effective watchdogs and fulfil their responsibilities.
Note: In 2020, Moneylife Foundation had prepared a comprehensive report on the efficacy of RERA from the consumer viewpoint. We had pointed to patchy adoption by state governments, especially in terms of notifying rules, setting up appellate tribunals and varying legal interpretations of the Act. The report, which provides a comprehensive list of suggestions to help make the Act more effective, can be accessed here:
2 weeks ago
No doubt that the UP RERA Greater Noida has done an excellent job in giving decisions within 3 to 6 months.
But the UP RERA staff takes 6 to 8 months to issue the RC I e an order for recovery of awarded amount to the concerned DM.....Again sorry to say there has been no action or information from the DM or SDM Dadri for 2 years. The file is in the Cold storage at DM.or Tehsildar / S DM office.
UP Rera Members efforts and the claimants hopes are back to square 1. Neither the builder nor the Govt recovery section is of any use.....All are under the builders control, it is my view...

As far as NCDRC it takes average 5 years to award the matter. BUT unfortunately It is surprising Judgement by itself is nothing untill you file the application for Execution of the Judgements......We fail to understand , Why the Judgements itself are not an Execution Orders for execution after lapse of the date of appeal in the matter, if the Opposite party is not gone for an appeal....It should be the responsibility of the NCDRC Office itself rather than complainants again rehiring the Advocate. Give PROF fee to Adv and file the Order Execution Application and so on which is again a case.. This is definitely an Uncalled and avoidable action to add to torture and harassment and in the interests of the complainant as well as NCDRC...It only suits to a Company..or an cause harassment....and the complainant.
2 weeks ago
I have had three cases with RERA Haryana against Vatika for four yrs now , despite order fr one case in my favour ( two still await order upload ) builder has not bothered to comply nor cares .
Judgments are not complied with - they always go to Execution and after that there’s another convoluted process .

Make matters worse they will take 3 months to load judgments then another 3 months till you file Execution and then another few months for Execution.

Corrupt archaic systems with shameless people in control .
Kamal Garg
2 weeks ago
I think there should be a legal mandate to open only one bank account for each project thereby ensuring that all the money collected is deposited in only one account and if there is any loan facility, it should also be linked with that one bank account only. And secondly, there should be only one head of payment and not multiple heads of payment asked by the builder. And that all such payments to be deposited in the aforementioned one single bank account only.
2 weeks ago
I have had three cases with RERA Haryana against Vatika for four yrs now , despite order fr one case in my favour ( two still await order upload ) builder has not bothered to comply nor cares .
Judgments are not complied with - they always go to Execution and after that there’s another convoluted process .

Make matters worse they will take 3 months to load judgments then another 3 months till you file Execution and then another few months for Execution.

Corrupt archaic systems with shameless people in control .
2 weeks ago
These institutes are just fooling around. I have registered a case with Rera and also had a conciliation session with NARADCO. Builders have no fear of these entities. They choose to not even bother to attend these sessions.
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