What the RERA Act has to say?
Transparency and accountability have increased in our country’s realty sector after the introduction of the RERA Act. Before the advent of RERA, buyers were not only facing difficulties in many aspects but were also exposed to frauds. Some of the projects were stopped in the middle and all those who had already invested in them lost their profits. Many projects stopped in the middle due to three reasons: Lack of funds, insufficient funds and depression in the sales. If more projects were to get stalled like this, the real sector will collapse. In this backdrop, following the advent of the RERA, a wayout was found to take forward the projects which were stuck in the middle. By 2022, there are 1.75 lakh unfinished flats locked in these stalled projects in seven major cities of the country. The value of these is over Rs.1.5 lakh-crore. It is noteworthy that almost 60 percent of these units are priced below Rs.75 lakh. Of the total units, 1.15 lakh units are in Delhi while 40,000 are in Mumbai.
What is the solution?
If the project gets stopped prematurely, RERA will take measures so that those who have already bought flats in it will not suffer. Section 8 of the RERA Act confers powers in this regard on RERA. The matter will be discussed with the concerned government and a decision will be taken. The rest of the work is completed by the Allottee’s Association (AOA) or the concerned competent authority through mortgaging the project or other investments. Otherwise, RERA will issue a notice to the bank mentioned in the EC or the third party interested in the real estate project.
These include scheduled banks, housing finance companies, insurance companies, non-banking finance companies working as asset finance companies, investment companies, loan companies, investment finance companies, infrastructure debt funds, micro finance institutions, foreign direct investors, private equity funds, There are real estate investment trusts. Generally, RERA directs the AOA to complete them only when the project is at the stage of completion. If the project is at an early stage, it may be difficult for the AOA to take over the project and direct the promoters to refund their money with interest and compensation.
Way forward
The settlement committee consists of one member from the promoters’ association and one member from the consumers’ association. Also those who have adequate professional experience in real estate sector or Chartered Accountant, Architect, Engineer, Lawyer will be appointed on the committee. Together they create a blueprint for completing the project. This will last for four months. After preparing a blue print with complete details regarding completion of the project, it is submitted to RERA. Once it is inspected and approved, the construction work will begin. AOA will update monthly details regarding the progress of works.
