THE RERA COURTS AND CONFLICT RESOLUTION IN INDIA

THE RERA COURTS AND CONFLICT RESOLUTION IN INDIA

The Real Estate (Regulation and Development) Act, 2016 (RERA), has been a game-changer in the Indian real estate sector, providing a robust legal framework to protect the interests of homebuyers and promote transparency and accountability. Among its many features, RERA courts play a pivotal role in conflict resolution. This article explores the various aspects of RERA courts, including their definition, jurisdiction, relevant acts, notable cases, and the detailed procedure involved in resolving disputes. Additionally, it delves into whether Non-Resident Indians (NRIs) fall within the jurisdiction of RERA courts..

I.  WHY RERA?

Indian real estate has been on the verge of collapse since 2012 due to factors such asunemployment, economic crisis, low rental yield, rising inventory, unclear taxation andarbitrage. Uncertain delays or obstacles are a concern for a home buyer investingtheir life savings into a home. Brokers or real estate agents take advantage to contact potential home buyers by lying about the level of development and completion. They provide false information to potential buyers about the property and its resources. Home buyers have long complained that real estate transactions are rigged and drawn out so that developers advantage. RERA and the Government’s Model Code aim to create a fairer and righteous process of buying and selling real estate especially in the primary market. If states do not subordinate the rules and core of the main legislation, RERA will make it easier to buy real estate by imposing the highest level of accountability and transparency.

II.  WHAT PROJECTS ARE COVERED UNDER RERA?(CHAPTER II):

The following types of projects are covered under RERA:

1. Residential apartments and flats 
2. Commercial real estate includes malls, shops, business spaces, etc. 
3. Plotted developments such as venture plots  
4. All ongoing and redevelopment projects that haven’t received a completion certificate

III.  REGISTRATION UNDER RERA:

Section 4 of the RERA Act talks about the application for Registration.A builder cannot sell a unit, site, or building without first registering, according to the RERA. Building registration is necessary in order to sell the building; otherwise,the transaction cannot take place.

On the application of section 3(2) the following real estate projects are exempt from Section 3 of RERA’s registration requirements:

• Where the land size is no greater than 500 square meters or there are no more than 8 (eight) units;
• Where the Promoter has a real estate project that has been completed before the RERA was implemented, and
• When the work is restricted to renovation, repair, or redevelopment and does not involve marketing, promoting, selling, or the new allocation of any apartments, plots, or buildings

IV.  DEFINITION :

RERA courts, also known as Real Estate Regulatory Authority (RERA) tribunals, are quasi-judicial bodies established under the Real Estate (Regulation and Development) Act, 2016. These tribunals are dedicated to adjudicating disputes and grievances related to the real estate sector, ensuring a specialized and expeditious resolution process. RERA courts aim to streamline conflict resolution, providing an alternative to traditional legal avenues.

RERA Act 2016 was introduced to protect the interest of homebuyers, ensure transparency in the real estate sector, and facilitate effective and quick dispute resolution. A major objective behind the implementation of The RERA Act is to boost investments in the real estate sector. Under the provisions of the act, it is mandatory for the builders to submit every detail of their ongoing project, which includes approved plans, alterations that are made to the plan, construction, completion and delivery timeline, revenue collected, etc.

V.  JURISDICTION OF RERA:

The act came into force on 1st  july 2017, and it is not limited to new projects that are to be started after the implication of the RERA Act it also covers ongoing projects during the commencement of the Act and that had not received a completion certificate from the concerned Authority.

A legal question recently arose before the Maharashtra RERA Authority regarding whether the jurisdiction of the RERA Authority is ousted in cases of termination of the agreement prior to the implementation of the RERA Authority.

In CASE OF CHAUTHIPRASAD S. GUPTA V. M/S NAHALCHAND LALOOCHAND PVT. LTD. The home buyer had made a substantial payment to the builder, and a sale agreement was executed. The buyer alleged that the builder terminated the agreement of sale unilaterally through a termination letter without giving any opportunity of being heard by the buyer. It was prayed by the buyer that the builder must be directed to withdraw the termination letter and compensation must be awarded.it was stated in the case that the builder cannot escape their liabilityby alleging the shelter under the non-maintainability of the complaint if the project is registered under the RERA and has not received an occupational/completion certificate yet. Section 3 of the RERA Act. The RERA Authority’s jurisdiction over such projects continues until the project is completed and the promoter’s obligations regarding the project are fully discharged. As a result, the authority determined that the RERA Authority has jurisdiction to hear such cases. To summarize, builders today cannot avoid liability by claiming non-maintenance of the complaint if the project is registered under RERA and has not yet received an Occupational/Completion certificate.

On the issues regarding the jurisdiction of the RERA court, the authorities said that the court will not entertain any case pending in other courts.The court dealt with a similar issue SH. SUKBIR SINGH GREWAL V. M/S MVL LTD. The buyer filed a suit against the builder for delay in handing over possession.The builder claimed that the delay in handing over the possession was due to SEBI’s interim order and the buyer is challenging the order in the SECURITY APPELLATE AUTHORITY (SAT).The authority ordered that the court constituted under RERA cannot hear the matter because the matter is already in the SAT.

VI.  PROCEDURE TO RESOLVE A DISPUTE BY RERA:

Real estate disputes can be a daunting and time-consuming ordeal, often leaving buyers and developers distressed. However, with the advent of the Real Estate (Regulation and Development) Act of 2016 (RERA), India witnessed a significant shift towards more efficient and streamlined dispute resolution mechanisms. As a result, RERA has emerged as a game-changer, providing a faster path to justice for all stakeholders involved. Let’s delve into how RERA has transformed India’s real estate dispute resolution landscape.

Under section 31 of the act The complaint can be filed either online or offline through the RERA portal or by visiting the respective RERA authority of the perticular state. Once the complaint is filed the action takes place within 45 days by the RERA authorities of particular state. Usually it takes five to six hearings todecide the case and conclude it.

RERA often issues notice to the developer within a week after the complaint is filed. Further the arguments are heared and it takes 15-30 days for release of order. This order also has to be posted online on the RERA portal. If the developer fails to honour the order then there are provisions for penality and imprisionment lisied as:

VII. ARE NRI’S INCLUDED IN RERA JURISDICTION:

• WHO ARE NRIs

U/s 6 of the IT Act, 1961, an individual who is an Indian Citizen or is of Indian origin, is considered to be an NRI.

If an individual’s taxable Indian income exceeds Rs 15 Lakh then that individual is considered to be a resident, in case the person:

• Visits India for 120 days or more in the preceding year
• Has been in the country for a period of 365 days or more in the previous 4 years.

According to FOREIGN EXCHANGE MANAGEMENT ACT (FEMA), a non-resident indian (NRI) is a person who lives outside india for more that 182 days. The FEMA  which is overseen by the Reserve Bank of India (RBI) , governs the purchase and acquisitionof immoveable assets in india by non-resident indians.

JURISDICTION FOR NRIs BY RERA IN INDIA:

There is considerable optimism among long distance byers following the passage of the RERA , which created a rebust grievance redressal system that protects the interest of buyers. 

The RERA is godsend for NRI investers who cannot monitor their investments in india. The RERA requires builders to keep 70% of the funds collected in escrow account for each project. When construction of the project progresses,funds are released from the escrow account, preventing monetory miscuse.

Following are the critical laws that one should keep in mind while going through this process:

• EASE OF BUYING 

In FEMA , RBI has made it easier for NRI to purchase properties. Foreign Investment Paper Board approvalis no longer required, unlike in the past.

An Indian Passport is needed to buy a property in the country.

• PROPERTY TYPE

NRI can purchase offices and residential properties in India. However, agricultural land, farmehouse, and platatiuon are not allowed to be purchased. They can own these only through inheritence or gifts.

• POWER OF ATTORNEY

NRI do nothave to physically present to transact real estate. The NRI can also sign a power of attorney with a relative or a known indian resident to handle all real estate trasaction on their behalf, such as registration,sale,etc. Neverthelss , care should be taken to ensure that POA need to be prepared by a legal expert.

VIII. CONCLUSION:

RERA courts have emerged as crucial instruments in reshaping the Indian real estate sector, providing an effective mechanism for conflict resolution. Through their specialized focus on real estate matters, these tribunals contribute to the overall objectives of RERA – transparency, accountability, and protection of homebuyers’ interests. As RERA continues to evolve and adapt to the challenges of the real estate landscape, it stands as a beacon of hope for stakeholders seeking fair and expeditious resolution of disputes. The inclusive jurisdiction of RERA, encompassing NRIs, further reinforces its commitment to providing a level playing field for all participants in the real estate market.

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