RERA Disputes
RERA disputes refer to conflicts or issues arising between homebuyers, builders, developers, or real estate agents, regulated under the Real Estate (Regulation and Development) Act, 2016 (RERA). RERA was introduced to promote transparency, accountability, and efficiency in the real estate sector by regulating real estate projects and protecting homebuyers' interests. RERA provides a legal framework for resolving disputes related to real estate projects, including delays in possession, non-disclosure of project details, or violations of the terms of sale agreements.
Common Types of RERA Disputes:
Delays in Possession:One of the most frequent disputes arises when builders fail to hand over possession of a property within the promised time frame. RERA mandates that builders adhere to the timelines mentioned in their agreements with homebuyers. Any delay can result in penalties, interest payments, or compensation for the buyer.
Non-Registration of Projects:Under RERA, it is mandatory for developers to register their real estate projects with the respective state’s Real Estate Regulatory Authority. Non-registration is a violation of the law, and buyers can take legal action against developers who fail to comply.
Misrepresentation or False Advertising:Developers are required to provide accurate information regarding the project’s layout, plans, approvals, and timelines. Misrepresentation or false advertising about these aspects can lead to disputes, with buyers entitled to seek compensation or cancellation of their agreement under RERA.
Changes in Project Plan without Buyer Consent:RERA prohibits developers from making any changes to the sanctioned plan, layout, or specifications of the project without the consent of at least two-thirds of the allottees. Disputes often arise when developers make changes to the project without seeking buyer approval.
Defects in Construction:If structural defects or poor quality of construction are found within five years of possession, RERA mandates that developers must rectify the defects within 30 days of the complaint, failing which the buyer can claim compensation.
Non-Refund of Booking Amount:Some disputes involve developers refusing to refund the booking amount or delaying refunds when buyers wish to withdraw from the project. RERA provides a remedy for homebuyers to seek refunds along with interest for the delay.
Non-Provision of Promised Amenities:Developers often make promises regarding amenities like swimming pools, gyms, or parking spaces, which may not be delivered as per the agreement. This can lead to disputes under RERA if the promised amenities are not provided or differ from the approved plan.
Failure to Form a Residents’ Welfare Association (RWA):RERA mandates that builders form a Residents’ Welfare Association (RWA) within three months of handing over possession. Disputes may arise when developers fail to establish the RWA or hand over control of the common areas to the buyers.
RERA Legal Framework:
RERA provides a comprehensive framework for handling disputes in real estate projects. Some key provisions of RERA that relate to disputes include:
Mandatory Registration of Real Estate Projects:Developers must register all projects with the state’s Real Estate Regulatory Authority before advertising or selling. Buyers can check the project details online, ensuring transparency.
Disclosure of Project Details:Developers are required to provide full disclosure of project details, including plans, layout, approvals, and timelines. Buyers have the right to access this information through the RERA portal.
Accountability for Delays:RERA holds developers accountable for project delays. In case of delay, the developer must either refund the entire money paid by the buyer along with interest or continue with the project while compensating the buyer with interest for every month of delay.
Advance Payment:Developers cannot accept more than 10% of the property cost as an advance or booking amount before entering into a written agreement for sale with the buyer.
Remedy for Defects in Construction:If structural defects or poor quality construction are identified within five years of possession, the builder is required to fix the issue within 30 days at no extra cost to the buyer.
Formation of RERA Authority and Appellate Tribunal:RERA establishes a Real Estate Regulatory Authority in every state, which functions as a grievance redressal forum for homebuyers and developers. Additionally, the RERA Appellate Tribunal hears appeals against the decisions of the Regulatory Authority.
Filing a Complaint under RERA:
Who Can File a Complaint?:Any aggrieved buyer, developer, or real estate agent can file a complaint under RERA if they believe there has been a violation of the provisions of the Act or the terms of the sale agreement.
Where to File a Complaint?:Complaints can be filed with the respective state’s Real Estate Regulatory Authority (RERA). Most states have an online portal where complaints can be submitted.
How to File a Complaint?:
To file a complaint, the buyer must:Visit the state RERA website and navigate to the complaint registration section.
Provide details of the complaint, including the project’s RERA registration number, details of the dispute, supporting documents, and the relief sought.
Pay the required complaint registration fee, which varies from state to state.
Documents Required:Agreement to Sell or Builder-Buyer Agreement.
Receipts of payment made to the developer.
Proof of project delay or misrepresentation (emails, advertisements, brochures, etc.).
Copies of any communications with the developer regarding the dispute.
Time Limit for Filing a Complaint:While RERA does not specify a strict time limit for filing a complaint, it is advisable to file the complaint as soon as the dispute arises to avoid delays in resolution.
Resolution of Disputes:
Hearing by RERA:Once the complaint is filed, the Real Estate Regulatory Authority will schedule a hearing. Both parties— the complainant (homebuyer) and the respondent (developer)—will be given a chance to present their arguments and submit evidence.
Order by RERA:After reviewing the evidence and hearing both sides, the Regulatory Authority will issue an order. The order may direct the developer to pay compensation, refund the booking amount with interest, or complete the project within a stipulated time.
RERA can also impose penalties on developers for non-compliance, including monetary fines and debarment from future projects.
Appeal to RERA Appellate Tribunal:If either party is dissatisfied with the RERA authority's order, they can appeal to the RERA Appellate Tribunal within 60 days of the order.
Further Appeal to High Court:If a party is not satisfied with the decision of the Appellate Tribunal, they can appeal to the High Court within 60 days of the Tribunal’s decision.
Compensation and Penalties under RERA:
Compensation for Delay:Developers must pay interest on the amount invested by homebuyers for each month of delay in possession. This interest is calculated at a rate equal to the State Bank of India’s highest marginal cost of lending rate (MCLR) + 2%.
Refund of Amount Paid:If the buyer wishes to withdraw from the project due to delays, the developer is required to refund the entire amount paid by the buyer along with interest and compensation.
Penalty for Non-Registration:Developers who fail to register their projects under RERA can be fined up to 10% of the total project cost.
Penalty for False Information:If a developer provides false information or misrepresents the project’s details, RERA can impose penalties of up to 5% of the project cost.
Imprisonment:In extreme cases of non-compliance with RERA orders, developers can face imprisonment for up to three years, or a fine, or both.
Advantages of RERA for Homebuyers:
Transparency:RERA mandates full disclosure of project details, including plans, timelines, and approvals. This protects buyers from being misled by developers.
Accountability:Developers are held accountable for project delays and poor-quality construction. Buyers can seek compensation if developers fail to meet their obligations.
Fair Practices:RERA promotes fair practices in the real estate sector by ensuring that agreements between buyers and developers are honored and any changes to the project are made only with buyer consent.
Easy Access to Redressal:RERA provides a straightforward process for buyers to file complaints and seek resolution. The establishment of the RERA authorities and appellate tribunals ensures that disputes are resolved efficiently.
Conclusion:
RERA has brought significant reforms to the real estate sector in India, ensuring that homebuyers' rights are protected and developers are held accountable. RERA disputes commonly involve delays in possession, non-disclosure of project details, or failure to provide promised amenities. Homebuyers can file complaints under RERA for these issues and seek compensation, refunds, or completion of the project. The RERA framework also provides for penalties and legal action against non-compliant developers, ensuring transparency, fairness, and efficiency in real estate transactions.