In the light of RERA (2016), Assistant Prof of School of Real Estate, Reema Bali compares the notified RERA Acts of different states.

16 May 2017

Expert Talk
In the light of RERA (2016), Assistant Prof of School of Real Estate, Reema Bali compares the notified RERA Acts of different states.

Real estate involves the sale, purchase and development of land for residential, commercial and industrial purposes. The real estate sector plays an important role in fulfilling the need and demand for housing and infrastructure in our country.

Different aspects of real estate are regulated by different levels of government. Real estate projects are currently regulated by state governments under their respective state town and country planning or apartment ownership Acts. Typically, town and country planning Acts regulate land use and development. Apartment ownership Acts regulate individual ownership of apartments in buildings with multiple apartments. Approvals for construction of real estate projects are primarily given at the local and state level. Certain approvals are given by the central government. Consumer grievances may be redressed through forums established under the Consumer Protection Act, 1986. Unfair trade practices may be challenged under the Competition Act, 2002.a

While this sector has grown significantly in recent years, it has been largely unregulated, with absence of professionalism and standardization and lack of adequate consumer protection. Though the Consumer Protection Act 1986 is available as a forum to the buyers in the real estate market, the recourse only curative and is not adequate to address all the concerns of buyers and promoters in that sector. The lack of standardization has been a constraint to healthy and orderly growth of industry. In view of the above, it becomes necessary to have a central legislation namely the Real Estate (Regulation and Development) Act, 2016 in the interests of all the stakeholders of the industry. (Grant Thornton, FICCI, 2016)

The Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as “The Real Estate Act” or simply “the Act”) was passed in the Parliament of India on 25th March 2016. Notification No. SO 1544 (E) [F.No. 0-17034/18/2009-H], dated 26th April 2016 provides the 1st day of May 2016 as the date on which the provisions of the said act will come into force. Full implementation of the Act is expected to happen from May 1st 2017. The rest of the sections will come into force from May 1st 2017 along with the sections already in force. (Ministry of Housing and Urban Poverty Alleviation, Govt. of India, 2016).

The passing of this bill at the onset questions the jurisdiction of the Parliament to make and enact laws related to land (as real estate) which is the part of the State List of the Constitution. However it is being seen to only regulate transfer of property and contracts between buyers and sellers in real estate which are both part of the Concurrent List. Some states already have legislations regulating the real estate projects in their jurisdiction. Any law or provisions which are contradictory or different from this Bill, the Bill shall override and prevail over such inconsistent provisions.

Following table shows the states who have notified the provisions under RERA

West Bengal  18 August 2016 (Draft)
Uttar Pradesh 11 October 2016
Madhya Pradesh 22 October 2016
Karnataka 27 October 2016
Gujarat 29 October 2016
Chandigarh 31 October 2016
Daman and Diu 31 October 2016
Andaman and Nicobar 31 October 2016
Lakshadweep 31 October 2016
Andhra Pradesh 27 January 2017
Odisha 25 February 2017
Maharashtra 22 March 2017

PRS Legislative Brief, based on the Real Estate (Regulation and Development) Bill, 2013, which was introduced in the Rajya Sabha on August 14, 2013

While the state governments are drafting their own rules or tweaking the model rules available to them, they are all diluting the safe guards being provided to the consumers under the new rules by excluding the existing residential projects. For example the notified rules of Gujarat and UP have inserted various provisions so as to exclude ongoing real estate projects from the purview of the real estate regulator. Another glaring example of the same dilution is where section 3 of the Central government’s RERA mandates that all promoters of all ongoing projects which have not received completion certificate will have to register with the state-level regulatory authority and provide complete disclosure of project details. In contravention of this crucial section of the Central Act, the Gujarat government has decided to exempt all projects that were launched before November 2016 even if the construction is yet to start on ground.