Year Of The Consumer
Several policy initiatives on affordable housing, like lowering of tax ... have made homes more affordable
Photo Credit :
Some key developments occurred towards the end of 2017. First, the government took over the embattled real estate firm, Unitech, after the National Company Law Tribunal (NCLT) suspended eight board directors of the debt-ridden Unitech, replacing them with government nominees. Corporate Affairs Ministry sought management control of Unitech for alleged mismanagement and diversion of funds. Unitech has challenged NCLT’s action, but the move may prove a boon for about 20,000 home buyers, struggling to take possession of homes that are long overdue for completion.
Earlier in December, the Bombay High Court ruled that all ongoing/under-construction real estate projects come within the purview of the Real Estate Regulation Act (RERA). The move has further empowered and protected property buyers in what will be the ‘Year of the Consumer’. A couple of thousand home buyers in different Unitech projects are claiming a refund from the Supreme Court. The apex court had directed Unitech to deposit Rs 750 crore by December end as bail for promoters jailed for forgery alleged by aggrieved home buyers.
The Bombay High Court ruling came after some states diluted the provisions of the Centre’s model RERA, pertaining to execution of under-construction projects. The court penalised unscrupulous developers for delays in completing projects. Many builders in different parts of the country had challenged the provisions of RERA that made them retrospectively liable for delays and default on delivery schedules of the past. To the relief of consumers, the Bombay High Court rejected the builders’ contention to quash these provisions and instead upheld the constitutional validity of the application of RERA to ongoing projects.
The enactment of RERA itself has come as a landmark development that has not just regulated real estate, ensuring fair and transparent transactions, but also empowered consumers. On one hand, its preventive and penal mechanism, comes as a deterrent for builders against cheating property buyers and on the other hand, it provides speedy and effective redressal to aggrieved buyers.
Before RERA came into force, home buyers who had invested their life’s savings, were clubbed with ordinary consumers seeking redressal of grievances (related to purchase of items costing a couple of thousand rupees) and they had to fight it out for years in consumer forums and civil courts against the might of builders. But RERA has made a provision for redressal of home buyers’ disputes within six months, entitling them to compensation for delayed delivery of projects.
What’s more, despite RERA coming into force, property consumers, according to NCDRC, can approach consumer forums, independent of the dispute redressal mechanism of RERA. The NCDRC has observed that home buyers cannot be made to wait indefinitely for the possession of flats. It has also said that home buyers are entitled to seek refund of the amount paid by them, along with compensation.
To put grievance redressal on fast track, the NCDRC has ruled that a group of property buyers with similar complaints against builders, can club their cases and directly approach the national forum. What has come as a big relief to property consumers is that not just the lower courts, but the Supreme Court too has turned pro-active in penalising willful default and cheating by realty companies, to protect the interests of consumers.
Demonetisation and the Benami Property Act have sucked black money out of real estate operations to stem the artificial increase in prices. Several policy initiatives on affordable housing, like the lowering of tax on house construction under GST and substantial interest subsidy under the Pradhan Mantri Awas Yojana for LIG and MIG housing, have made homes more affordable.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.