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Why RERA scores over consumer courts for home-buyers

By Tinesh Bhasin
December 16, 2018 09:00 IST
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State real estate regulators are the best option for home-buyers when it comes to seeking relief. The cases are disposed much faster, and the individuals don’t need to engage lawyers as the process is simpler, says Tinesh Bhasin.

Illustration: Uttam Ghosh/Rediff.com

Home-buyers and activists attending a workshop on Real Estate (Regulation and Development) Act or RERA in Delhi recently were surprised when one of the state regulators said that consumer courts should not decide matters pertaining to RERA.

 

According to state real estate regulators, consumer forums only award compensation or refund whereas real estate regulators take into account consumer interest as well as how the project will be completed.

The opinion didn’t go down well with the activists and home-buyers.

“They want exclusive jurisdiction on the matter pertaining to real estate, which is not correct,” says Colonel Tejandra Pal Tagi, president, Flat Owners Federation, Ghaziabad, who attended the workshop.

He adds: “RERA is still in the implementation stage in many states whereas consumer forums have a presence in every district.

"Consumers should not be barred from getting relief from an institution that is easily accessible to them.”

State real estate regulators are the best option for home-buyers when it comes to seeking relief to their realty-related problems.

The cases are disposed much faster, and the individuals don’t need to engage lawyers as the process is simpler.

“The real estate regulators should focus on proper implementation of RERA so that it becomes an obvious choice for the home-buyers rather than stopping them from seeking relief under other laws.

"RERA still have many shortcomings, and many aspects of the Act need to be settled,” says Abhay Upadhyay, national convenor at Fight for RERA.

You can approach either one at present: As the law stands today, a consumer has the option to approach either of the two institutions for seeking relief.

Those home-buyers who are already fighting a case in the consumer forum are not allowed to approach RERA and vice versa.

“But if a home-buyer had filed a case in consumer forum before implementation of RERA, he can withdraw the case and approach the regulator,” says Shirish Deshpande, a lawyer and also chairman of Mumbai Grahak Panchayat.

Barring home-buyers is not easy: Lawyers and activist say that consumers must always have a choice as both the Acts have their pros and cons.

The Consumer Protection Act has been in force for over 30 years.

Most of its provisions are settled as cases reached the apex court.

RERA still has a long way to go as none of the cases have yet reached the Supreme Court.

Changing provisions of CPA, is, therefore, not easy. CPA also focuses entirely on the consumer whereas RERA focus on consumer as well as on developers.

In fact, Section 88 of the RERA says that its provisions “shall in addition to, and not in derogation of, the provisions of any other law for the time being in force”.

It means, that home-buyer cannot be stopped from approaching other institutions to seek relief just because he has the option of approaching the state real estate regulator.

Also, many states are yet to implement RERA fully. Some have appointing interim regulator. Some don’t have tribunals. Many are yet to have a functional website. There are still teething trouble with it.

Consumer forum a better option in some cases: Once the project is registered with the real estate regulator, buyers have two options to seek relief against a developer.

They can either approach the real estate regulator or a consumer forum.

For reliefs already provided under the RERA, buyers cannot approach civil courts. Both remedies have their advantages and disadvantages.

If there’s a group of buyers who want quicker relief, consumer forum will make sense than approaching a real estate regulator, according to lawyers.

In RERA, to reach the apex court for finality, a buyer needs to first approach the regulator, then appellate authority and then the high court.

Lawyers say this can be time-consuming and take much more time than approaching a consumer court.

If the total value of all their flats combined is over Rs 1 crore, buyers can approach National Consumer Disputes Redressal Commission directly.

The Supreme Court is the only judicial authority that any party can approach to appeal against NCDRC order.

In cases dealing with project delays, the NCDRC has been active and pro-consumer.

They have passed some great orders and even directed forensic audits of developers’ books.

In RERA, adjudicating officers in different states have been passing the order based on their own interpretation of the law.

Upadhyay points out that in a recent case in Maharashtra RERA, the adjudicating officer said that compensation will be awarded to the home-buyer at an “appropriate” time, without specifying any deadline or defining what would be an “appropriate” time.

Single buyers may approach RERA: For those fighting on their own, approaching consumer forums can get tiring if the cost of the house is below Rs 1 crore.

They need to first approach the state commission and then NCDRC for flat costs between Rs 20 lakh and Rs 1 crore.

For disputes involving an amount below Rs 20 lakh, the individual needs to approach a district forum.

In many states as of now, there is no backlog of cases with regulators. A buyer can expect his case to be heard faster.

Again, if you are alone and reside outside Delhi, where NCDRC is situated, approach real estate regulator. It will save travelling time and engaging senior lawyers. You can also file complaints online with a few regulators.

Other than project delays, RERA also provides relief to buyers if a developer changes a project plan without informing the buyers, if requisite permissions are lacking, or if there were misrepresentations/false promises.

RERA also makes real estate agents accountable for their role in the sale of real estate projects.

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Tinesh Bhasin in Mumbai
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