Builders Challenge RERA In Court By Saying Its Provisions Are Illegal

Some of the builders have reached out to two high courts to question a few provisions provided in the Real Estate Regulation Act (RERA). These challenged provisions include the one for having all the “ongoing” projects under RERA and laying penalties if such projects are not registered. The builders are pleading that these provisions be removed as the ongoing projects were initiated when the law was not even executed and therefore, it’s illegal.

Previously, the builders had demanded that the incomplete projects should be excluded but that request was suspended by the Central Government as it said that the law was supposed to help the homebuyers who are stuck with incomplete flats for years, even when they had made full payments. As per the law, new and incomplete projects have to be registered with the regulator by 1st August; otherwise the builders will have to pay penalties.

The builders are showing reluctance to this provision as they are facing cash-crunch. Apart from this, the law will also bring clarity, honesty and transparency in the system and the builders will have to give deadlines for delivery of the flats.

The sources of the Housing and Urban Affairs Ministry have said that RERA covers all kinds of projects which did not have a completion certificate by 1st May, 2017 and thus, does not have any retrospective effect.

Builders are challenging the Central Government’s right to implement the law related land, which actually is the concern of the state. Therefore, giving the project details to the regulator will mean violation of right to privacy.

A government official has said that the law has been implemented according to the proper provisions of Concurrent List and it also had the approval of the Law Ministry.

RERA has not been executed for matters of ‘local authority’ or ‘land’. It has been executed to control the contractual and legal responsibilities signed between the developers and homebuyers. The main aim of RERA is to have no disputes in the real estate sector.