Gujarat RERA model to ease refunds to buyers

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Gujarat has become a model to the Centre to provide relief to aggrieved homebuyers waiting for errant housing development companies not complying with the directive to return money to their customers, The Economic Times has reported. The ministry of Housing and Urban Affairs has shot off an advisory to real estate regulatory authorities (RERA) of states and Union territories urging them to draw up a mechanism to recover funds on the model adopted by the Gujarat Real Estate Regulatory Authority.

The ministry has also asked the respective authorities to appoint a recovery officer to facilitate the process. Suffering homebuyers have red-flagged concerns that developers who have failed to deliver dwelling units are also not obeying directives to pay the trapped customers.

Though the Real Estate (Regulation & Development) Act, 2016 helped streamline the unregulated real estate space, non-compliance of payment of dues remained a sore point. Earlier the ministry had urged six RERA bodies from the states of Karnataka, Tamil Nadu, Uttar Pradesh, Maharashtra, Haryana and Gujarat to suggest ways to ensure timely compliance of the refund orders.

Following its step, the RERA authorities of Gujarat, Maharashtra and Tamil Nadu offered their suggestions. After receiving the suggestions, the ministry said in a meeting of a sub-committee formed under the Central Advisory Council (CAC) that it has asked state authorities to follow the model practised in Gujarat.

“It is a major concern that home buyers across India are facing challenges in getting their refund orders enforced. We gave our report after studying the Gujarat model of recovery to the ministry for its consideration. It’s a very positive step that the ministry has written to all states suggesting the Gujarat model as a way forward for effective recovery,” Abhay Upadhya told the newspaper. Upadhyay is the president of pan-India homebuyers body Forum for People’s Collective Efforts (FPCE).

Upadhyay mentioned that the collective hopes that state-specific RERA authorities would follow the model suggested by the Union ministry and would pave the way for aggrieved homebuyers to get refunds within a time limit. He also emphasised how crucial this eventual step is in building confidence of the hapless customers on the constructive impact of RERA on the real estate sector.

In the meeting held recently, MS Shankar, who is the general secretary of FPCE underscored the fact that RERA authorities are more interested towards promoting the growth of the realty sector as envisaged in section 32 of RERA. Shankar also said that RERA authorities don’t have functional responsibilities and can only make recommendations to the state government.

Shankar emphasised that besides promoting the cause of the real estate industry, the regulatory authorities have to focus on the protection of the interest of homebuyers. The homebuyers are left at the mercy of the developers and RERA authorities have to ensure that malpractices have to be eliminated.

Shankar also mentioned that there is no data on the websites of realty authorities. The gap typically occurs in providing names of completed projects and projects that have been awarded completion certificates, etc.