With regards to property and real estate, post-independence developments have been sparse. With removal of “right to property” from the fundamental rights, to land acquisition amendments of 2013, to privatization and sub-contracting of municipal contracts and Foreign Direct Investment (FDI) allowance in real estate, it culminated into a Public Private Partnership (PPP) regime. No development post-independence is envisioned to produce greater ripples in the real estate market than the Real Estate (Regulation and Development). Act 2016, and such corresponding rules formulated by the state Govts.
The new Real Estate Act allows strict regulation of the real estate sector of the Indian economy, thus making it more accountable and consumer friendly. This act was a result of continuous demand and grievances of aggrieved consumers and recurring directions given by the Hon’ble Supreme Court in numerous cases related to delay in delivery of projects, skyrocketing inflating prices, false claims and differences in promised and provided housing units to the consumers. In response to all the demands, the Parliament of India resolved to enact the aforesaid mentioned legislation, thereby introducing the desirable time bound delivery mechanism, enforcement regulation through a separate Real estate regulatory authority at State level which also acts as grievance redressal forum for the consumers. Moreover, this legislation introduces the concept of keeping certain amount of deposited fund by the buyers in a separate declared account to avoid such diversion of resources for other projects. In addition to all this, it mandates every developer to get registered on the online website of RERA wherein such details of ongoing projects have to be updated. Also, if handed over real estate unit is found to be substantially different to what was promised, then there is a forum for such grievance redressal.
The historical experience of governance in India tells us that merely legislating a fool-proof legislation does not alter the sector radically. It is the implementation and rule design and culture adopted by the executive that plays the real deal. Since real estate being a State subject, State Govt’s acts as the implementing unit for this legislation in accordance with the rules formulated by it. Prudence tells us that this further has to be decentralised, as handling such grievances and complaints at state level would be impractical. Thus rules formulation should go for more effective decentralisation to municipalities as they are the first point of contract with the real estate. In addition to this, one needs to also check that such regulatory forum does not become new avenues of harassment of developers, as both buyer and the seller must be productive to make the sectoral market a win-win situation. In addition to this, keeping representatives from prominent stakeholders of the sector in the real estate regulatory authority would improve the conciliatory mechanism and be a productive forum for arbitration settlements. Finally, a culture of accountability and transparency has to be instilled in the system of real estate which is currently marred with opaqueness and veil, to make the legislation more effective and deliverable as per desired.