Real estate act gets court seal

Mumbai: The Bombay high court on Wednesday upheld the constitutional validity of the Real Estate (Regulation and Development) Act (RERA) as it observed that it was crucial to protect the interests of flat buyers across the country.

Noting that there are "enormous problems" in the housing sector, the court also addressed the issue of implementation of the act, saying it must be closely monitored.

Though RERA is a central law, its implementation will depend on the state governments since real estate is a state subject.

A bench of Justices Naresh Patil and Rajesh Ketkar pronounced its judgment on a bunch of petitions by real estate developers and individual plot owners, all challenging the constitutional validity of the act that was brought into effect in May this year.

The bench, however, provided a major relief to developers by permitting the state-level RERA Authority and the Appellate Tribunal to consider delays on a case-to-case basis, and not to cancel such projects or developers' registration in cases where the delay was caused due to "exceptional and compelling circumstances".

"In case the authority is satisfied that there are exceptional and compelling circumstances due to which a developer could not complete the project inspite of the one-year extension granted, then the authority will be entitled to let the developers' registration continue," the court said. It added that such powers shall be exercised on a case-to-case basis and the authority shall consult with the state in such cases if needed.

"RERA is not a law relating to only regulatory control of the promoters (developers), but its objective is to develop the real estate sector, particularly the incomplete projects across the country," the bench said, as it pointed out that it was crucial to protect the interests of flat buyers across the country.

The act, among other things, mandates that all developers or promoters register themselves under a state-level regulatory authority. It allows buyers to claim compensation for delay in possession, and envisages cancellation of a developer's registration.


Back to top icon