A major test looms for our real estate reforms

Source: The post is based on an article “A major test looms for our real estate reforms” published in The Live Mint on 30^th August 2022.

Syllabus: GS 3 – Industries and industrial policies

News: This article discusses about the provisions under Real Estate (Regulation and Development) Act, 2016 and various steps taken by the government in the real estate.

According to an estimate by a realty consultancy firm, the construction of about 240,000 homes remains stalled in the National Capital Region (NCR).

What are the steps taken by the Government in real estate sector?

The Centre set up a special fund to complete stalled affordable housing projects across the country.

The National Buildings Construction Corp Ltd and developers with proven track records also took over unfinished projects.

Real Estate (Regulation and Development) Act, 2016 had a blueprint for the sector’s regulatory architecture.

What are different provisions under Real Estate (Regulation and Development) Act, 2016?

First, All builders had to register their projects with a state’s Real Estate Regulatory Authority (RERA).

Second, they have to be clear on other undertakings and keep the funds pooled from homebuyers of one project in an escrow account so that none of it could be diverted.

Third, they had to abide by clear delivery timelines failing which they had to refund buyers or pay interest on their money for delays.

Fourth, Customers could also approach consumer courts under RERA which was given the power to crack down on builders with fines or prison terms.

The judiciary classified advance paying homebuyers as creditors, letting them to form a group and to drag corrupted builders to bankruptcy courts.