[Answered] Do you think that the Real Estate (Regulation and Development) Act is sufficient to address cases like that of the Supertech towers?

Real Estate (Regulation and Development) Act (RERA), 2016 is a central legislation which aims to regulate the real estate sector. About 77% of total assets of an average Indian household are held in real estate. It’s the largest single investment most families make. The demolition of Supertech’s twin towers is a lesson for all stakeholders in the real estate industry that accountability will be fixed if they violate building laws.

Sufficient to address cases like that of the Supertech towers:

• It brings about standardisation of contracts, reduces the information asymmetry between buyers and other stakeholders by making relevant information public and minimises misuse of upfront payments by buyers.
• The RERA Act ensures quality production, timely delivery, balanced agreements, transparency on sale based on carpet area and transparency on utilisation, among other benefits.
• The RERA rule also paves way for promoter’s promise to have a legal standing to it. The promoter has to give a declaration, supported by an affidavit stating the time period within which the project or the specific phase will get completed.

Challenges:

• It can not resolve the corruption at the level of urban bodies. It also suffers from the general weakness in state capacity as each state needs to establish a regulatory body.
• State governments regulated real estate before RERA as land and land improvement are in the State List of Seventh Schedule of the Constitution. RERA has been enacted under Concurrent List. This has increased the tussle between various states and Centre over implementation of RERA.
• A major concern has been delay due to government approvals of real estate projects (like ownership certificate, land use conversion, environmental and pollution NOCs etc).
• State RERA authorities usually may not have enough infrastructures to verify every permission and the lacuna can lead to illegal constructions.

Way forward:

• The state regulatory authorities under the RERA Act should be more empowered to take action against defaulters and protect consumers’ interest.
• Actions like digitise land records available in public domain can help in further providing transparency.