In Rakesh Roshan’s 1995 release, “Karan Arjun”, there were several moments where you see Durga Singh (played by Rakhee), a widowed mother of two young boys Karan & Arjun (played by Salman Khan & Shah Rukh Khan), who were killed by Thakur Durjan Singh (Played by Amrish Puri) saying “Mere Karan Arjun Aayenge (My Sons Karan Arjun will come back)”.
The movie was based around reincarnation and the hope that Karan Arjun will come and take revenge from Thakur Durjan Singh. Karan Arjun do take birth and return to the village as Ajay- Vijay & like all good Hindi films, Ajay -Vijay take the revenge from Thakur Durjan Singh, and everybody lives happily thereafter.
Now you might be wondering why I am talking about a Bollywood movie while I am supposed to be talking about RERA & why it hasn’t achieved the objectives for which it was introduced.
When RERA was about to be introduced, everyone saw it as Karan-Arjun of real state for home-buyers, which would streamline everything and put to a stop to all mal-practices followed by different builders across the country.
To give a backdrop, RERA which stands for Real Estate (Regulation & Development) Act, of 2016 was introduced by the Central Government in May 2016. However, the land is a state subject under the constitution of India, thus the state governments were empowered to form operational rules for real estate projects operating in their state or union territory. The state governments were supposed to notify the rules up to 30th June 2017 when the Act became fully operational. RERA was introduced to safeguard the interests of buyers on various points. The major objectives, for which RERA was introduced, are summarized below-
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| Fig.1 Main Objectives of RERA |
The major provisions which ensured fulfillment of the above-stated objectives are-
- 70% of funds received from buyers by a developer are to be kept in a separate bank account. Further, the collected amount can only be used for development of respective project & withdrawals should be in proportion to the value of work completed. The provision aims to restrict developers from the diversion of funds for procuring more land or expending it on other projects of the same developer.
- Hefty Penalty Imposable; a penalty of 10% of the total project cost and/or prison up to 3 years is included in RERA, which shall be imposable on any builder who contravenes any provision of the Act. The provision was introduced to establish a fear factor amongst the developers & timely completion of projects.
- Buyers Approval for Structural Changes. All of us are aware how builders make structural changes at the time of possession & charge buyers for an additional area without any prior intimation. Post RERA, the builder is supposed to obtain prior approval of at least 2/3 of buyers before making any structural changes in Project.
- RERA is also applicable on projects which were launched before the introduction of RERA & definition of On-Going Projects is given to include all the projects under development phase to whom completion certificate was not issued. The Provision is introduced to ensure timely completion of projects within prescribed timeline & to end the buyers waiting period of endless years to have their own home.
- Defect Liability Period of 5 Years. All developers are to be accountable for a period of 5 years in case of any structural defect in the building & that too free of cost. The provision was introduced to ensure that quality of construction is not of the sub-standard level.
However, as we stand today here, one year after the implementation of RERA, many of the myths which all stakeholders had, stands busted. Some of such myths are-
- RERA will ensure completion of delayed projects. While RERA was supposed to be applicable on all on-going projects for which completion certificate has been obtained by developers, most of the RERA rules as formulated by different state governments have diluted the definition of the on-going project to leave out a large chunk of on-going projects out of the net of RERA.
- RERA will bring an end to arbitrary practices of builders. RERA was introduced to end arbitrary practices followed by builders across the nation, but still, there are 8 states out of 28 states in which RERA was implemented, who have not notified RERA rules.
Further, most of the states while formulating the RERA Rules, have diluted several key provisions, which would have otherwise ensured fulfillment of the objectives for which RERA was introduced.
Given below are some of the interesting facts in relation to the implementation of RERA-
- Out of 28 states (excluding Jammu & Kashmir), 8 states are yet to notify RERA rules.
- 14 states are yet to set up functional web portal.
- Out of 25,000 odd projects being registered all-across India, 62 percent are based in Maharashtra only.
- Only 3 states have appointed permanent regulators under RERA.
“A half-hearted spirit has no power. Tentative efforts lead to tentative outcomes. Average people enter into their endeavors headlong & without care”. – Epictetus
The above quote summarizes the situation in a very precise manner. RERA, which was introduced to end the arbitrary practices followed by the developers, got diluted because of the half-hearted efforts of the State Governments thereby strengthening the fact of the existence of a link between the legislators & the developers. Nevertheless, one should not stop hoping, in the times to come, the legislation will achieve the purpose for which it was introduced.
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