How is RERA empowered to help Aggrieved Buyers having invested in

projects which are outside the Purview of RERA

Sarbojit Dutta and Sagar Sohani
Build Smart RE, sales@buildsmartre.com, 8240482399

ABSTRACT

In this paper the authors summarize how the Real Estate Regulatory Authority is empowered to help
Aggrieved Persons who have invested in Real Estate Projects which do not come under RERA. This
paper is an amalgamated result of extensive research on both the Real Estate Regulation and
Development Act, 2016 as well as legal cases which has been brought to RERA/Adjudicating officers in
various states for permanent relief.

1. INTRODUCTION

The Real Estate Regulation and Development Act, 2016 was passed on 25th March, 2016. The
primary reason why the Act was passed was for the regulation and promotion of the Real Estate
sector and to ensure that the sale of plot, apartment or building, as the case may be, or sale of real
estate project, in an efficient and transparent manner and to protect the interest of
consumers in the real estate sector and to establish an adjudicating mechanism for speedy
dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions,
directions or orders of the Real Estate Regulatory Authority and the adjudicating officer and for
matters connected therewith or incidental thereto.

2. CASE STUDIES
a. Case Study 1: The Hindu Article: “Not registered? RERA not the forum for you”, dated
16.12.2017 highlights the fact that home buyers who have bought apartments in over 35
ongoing projects in Bangalore, were affected as RERA Karnataka refused to register their
projects highlighting concerns relating to defective title.
Mr. Mohan- The interim Chairperson said “RERA will act as an effective regulatory
authority for future projects as it will similarly refuse registration for projects with
improper title deeds and other irregularities, rendering them non-starters. But buyers in
ongoing projects are likely to bear the brunt”.
The reason why Mr. Mohan said the above statement was because the Judicial
mechanism under RERA only takes into consideration the projects which have been
registered with the authority which is a huge drawback.
A counter argument provided in the above case was aptly put forward by Mr. M.S.
Shankar, Fight for RERA – Karnataka Chapter “But RERA must proactively make the
names of projects and developers public, warning other home buyers. They must also
write to the government seeking action against developers and refunds for home buyers”.

Suggestion: In the above scenario, although the Authority is not directly authorized at
present to pass any judgement against the Promoters of the project but they can certainly

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 issue warning on their official website or through other mediums against investing in such
defective projects with the name and address of the project clearly mentioned.

b. Case Study 2: Home buyer has invested Rs 8,25,000 in a project in Patna, Bihar during
pre launch in the year 2013 and the following project did not take off at all as the project
was coming under Green Zone of Bihar.
Now, jurisdiction of RERA or Adjudicating officer or the Real Estate Appellate Tribunal
is applicable on projects which are registered with RERA which here is not the case.
Here, the aggrieved buyer has to resort to filing criminal charges in a Civil Court or
before the Consumer Forum.

Suggestion: Provisions can be made that all pending proceedings pertaining to Real
Estate should come under RERA to provide relief to Home Buyers. This can be done
through the following:

● Section 32, Clause (g) authorizes RERA to form Dispute Settlement Forums
where such cases can be arbitrated and speedy redressals can be sought.
● Section 32, Clause (i) directs RERA to provide advice to the Government
bodies. So, RERA should advice the ULBs to make it very clear for the
Prospective Buyers (Aam Aadmi) through any online portal or any such medium
to check whether a Proposed project land is coming under any non development
zone/green zone/selected industrial zone etc.
RERA should also direct the appropriate Government i.e., the ULBs to make
checklists and follow structured modules for Plan sanctioning and Building
approvals. These modules/checklists should be shared with all Empanelled
Architects and Engineers for clarity and consistency.
● Through Section 32, Clause (j) RERA should bring in all the Pending
Proceedings as stated under its jurisdiction and can bring about mutual
settlement through the provision of Section 32, Clause (g) as mentioned above.
This will help restore the trust and faith of Buyers and prospective Investors in
the Real Estate Sector and contribute to a flourishing State Economy.

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 3. CONCLUSION

S.No. Section/ Clause Description

1 Section 71 Interpretation: Permits transfer of matters from the consumer courts

only if it is covered under section 12, 14, 18 and 19. The
complainant can withdraw the pending complaint from the
consumer court and file a fresh application before the authority
established under the Act.
Proposed Amendment: A compulsory transfer of all pending
proceedings to the regulatory authority, in addition to the above
stated sections in the clause.

2 Section 3 (1) & (2) Interpretation: Empowers Authority to support aggrieved buyers
Section 31 only when a project gets registered.
Proposed Amendment: Main Objective of RERA Act is to protect
interest of the consumers, thus scope of RERA needs to expand and
definition of projects coming under its ambit has to be amended in a
manner such that Cancelled projects should also come under the
purview.

3 Section 18 Interpretation: Promoter can be held liable only for future

commitment i.e., only those it may breach after registering with the
authority and overlook the commitments made while signing the
agreement for sale before May 2017.
Proposed Amendment: A provision for compensating buyers on
inconsistency in the previous commitments and the commitments
made while registering under RERA needs to be brought under the
Act.

4 Annexure Interpretation: An allottee can withdraw or cancel a unit at will

(Agreement for irrespective of the builder’s default.The builder will now have to
sale) Section 7 return the amount paid by the buyer within 45 days after forfeiting
(7.6); of Bihar the booking amount.
Real Estate Proposed Amendment: Once the money is deposited in the
(Regulation and designated account, a withdrawal certificate is required to extract
Development) funds. Thus, a specific provision should be made to allow the
Rules,2017 builder to withdraw this amount from the designated account.

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