RERA – A Paradigm Shift in Real Estate and Its Dispute Resolution Mechanism

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Introduction

The Real Estate (Regulation and Development) Act, 2016 (RERA) marked a significant turning point in the Indian real estate sector. Enacted to protect homebuyers and promote transparency and accountability in the industry, RERA has transformed the way real estate projects are developed, marketed, and executed in India. In this blog, we will explore the perspective of RERA and delve into its dispute resolution mechanism, which plays a pivotal role in safeguarding the interests of all stakeholders.

The Perspective of RERA

Before the implementation of RERA, the real estate sector in India was often marred by unscrupulous practices, delays in project completion, and lack of transparency. Homebuyers faced several challenges, including fraudulent marketing, hidden costs, and unreliable delivery timelines. RERA was introduced to address these issues and bring much-needed regulation and structure to the real estate market.

Key Objectives of RERA:

  1. Protection of Homebuyers: RERA aims to safeguard the interests of homebuyers by ensuring that developers adhere to strict guidelines and deliver projects within the promised timelines and specifications.
  2. Transparency and Accountability: RERA mandates developers to disclose all relevant information related to the project, including approvals, layout plans, and delivery timelines, promoting transparency in the sector.
  3. Establishment of Regulatory Authorities: Each state and union territory in India has its own Real Estate Regulatory Authority (RERA) to oversee and regulate real estate projects within its jurisdiction.
  4. Registration of Projects: RERA requires developers to register their projects with the respective regulatory authority, providing homebuyers with easy access to essential project details.
  5. Escrow Account Mechanism: Developers are required to deposit a specified percentage of funds received from homebuyers into a separate escrow account to ensure that the funds are utilized only for the specific project’s development.

RERA Dispute Resolution Mechanism

To ensure prompt and effective resolution of disputes arising between homebuyers and developers, RERA has established a structured dispute resolution mechanism. This mechanism encourages a fair and balanced approach, benefiting both parties involved in the dispute.

  1. Adjudication by RERA Authority: The first level of dispute resolution is carried out by the RERA authority in the respective state or union territory. Homebuyers or developers can file complaints before the authority, which then proceeds to adjudicate the matter based on the evidence and arguments presented.
  2. Establishment of Appellate Tribunals: RERA provides for the establishment of Real Estate Appellate Tribunals (REATs) to hear appeals against the orders of the RERA authority. Parties dissatisfied with the RERA authority’s decision can approach the REAT for a review.
  3. Time-Bound Resolution: One of the critical features of RERA’s dispute resolution mechanism is its time-bound approach. The Act aims to resolve disputes within a specific period, ensuring timely justice for all parties.
  4. Alternate Dispute Resolution (ADR): RERA also encourages the use of Alternate Dispute Resolution methods, such as mediation and conciliation, to resolve disputes amicably and avoid lengthy court battles.
  5. Enforcement of Orders: The orders passed by the RERA authority and REAT are executable as decrees of a civil court, which enhances their enforceability and efficacy.

Conclusion

RERA has brought about a revolutionary change in the Indian real estate sector, offering comprehensive protection to homebuyers and promoting transparency and accountability among developers. The Act’s robust dispute resolution mechanism ensures that disputes are resolved promptly, enabling fair treatment of all parties involved. As RERA continues to evolve and mature, it has the potential to significantly elevate the confidence of homebuyers in the real estate market and contribute to the sector’s sustainable growth.

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Disclaimer – The content of this document is for information purpose only and does not constitute advice or a legal opinion. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc. before acting on the basis of this write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that the Treelife is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof.

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