RERA versus NCDRC: Who will protect home buyers better?

[] With the Real Estate (Regulation and Development) Act and the National Consumer Disputes Redressal Commission, both available for filing a complaint/case pertaining to real estate disputes, we look at which one would be a better option for property buyers

In recent times, the National Consumer Disputes Redressal Commission (NCDRC) has given several tough rulings against the developers and in favour of home buyers. The Real Estate (Regulation and Development) Act (RERA), on the other hand, has been enacted to address the anomalies in the present legal system. Experts point out that the RERA is a single platform that can entertain all real estate development complaints, unlike the NCDRC and other consumer forums, which can only be approached by consumers seeking relief.

You are reading: RERA versus NCDRC: Who will protect home buyers better?

Whom should aggrieved home buyers approach – RERA or the NCDRC?

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“With the RERA coming into force, a separate designated authority has been created, to deal with all matters relating to any deficiency of services in the real estate development sector. The RERA authority and adjudicating officer, can hear complaints with respect to registered real estate projects, irrespective of the claim amount. An aggrieved person can file a complaint, not only against a developer, but also against a purchaser. The Act also makes real estate agents accountable, for their role in the sale of real estate projects and permits aggrieved persons to file complaints against them,” explains Ameet Hariani, managing partner, Hariani & Co. Consequently, the enactment of the RERA, could definitely reduce the burden on the NCDRC and other consumer courts.

[] What is RERA and how will it impact the real estate industry and home buyers?

As the real estate authority, will be a dedicated court for cases from a particular sector, the speed and rate of disposal of cases could be significantly faster, maintains Digbijoy Bhowmik, head of policy, RICS South Asia. “How well this is achieved, will depend on the speed at which the authority collates cases belonging to a single project, or a group of projects with identical charges and claims. Moreover, unlike the NCDRC, which will now entertain cases only if the claim is over Rs one crore and the plaintiff is a registered association (of aggrieved parties, such as allottees or purchasers), the authority is still capable of receiving individual complaints. This could lead to ‘swamping’, where multiple plaintiffs complain about the same promoter or project. The authority, hence, could face a bit of a heavy workload,” adds Bhowmik.

Crucial differences between the RERA and the Consumer Protection Act

Issue The Real Estate (Regulation and Development) Act, 2016 The Consumer Protection Act, 1986 Which one has the upper hand and why
Applicability Only to real estate projects Any matter of consumer interest (goods/ services) RERA

  • Dedicated court.
  • Higher probability of faster hearing.
  • Better distributed for claims above Rs 1 crore.
Taking cognisance of infractions by any party
  • Can act on complaints or take suo-motu notice
  • Can conduct investigations
  • Can act only on complaints
  • Cannot conduct investigations
Ease of filing a case
  • Specifies forms, apart from documentary evidence
  • Can be filed at the regional or state level
  • Individual claimants can file complaints
  • Application on plain paper, with documentary evidence
  • Can be filed at district, state or national level, based on the claim amount, but as real estate is expensive, it may lead to overloading at the national level
  • Only registered associations of purchasers and allottees can file complaints

  • Ease of filing cases, with similar expected results as that under the Consumer Protection Act, 1986
Success of litigation
  • Can imprison an errant developer up to three years, or prescribe a fine, or both
  • No past precedence, as yet
  • Cannot imprison a developer, but can award a fine.
  • Good past record of litigation
More or less similar but the Consumer Protection Act, 1986, scores better on track record.
Appellate system
  • Real Estate Regulatory Tribunal, for grievances against the order of the Authority
  • Civil courts in case of grievance against the NCDRF – usually a high court of the state or the Supreme Court.
  • In situations where public authorities are involved/ party to the case, such civil courts have passed orders against them too.
Although the RERA, under section 79, bars civil courts from hearing any matter that can be determined by the Authority or Tribunal, this may be legally questionable, as a number of orders issued at the level of a tribunal (for example, the National Green Tribunal) have been both, entertained and overturned by civil courts.

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Table provided by RICS

Ultimately, if the real estate authority (and subsequently, the tribunal, in cases where there is an appeal against an order issued by the authority) can show to the stakeholders that this law has the capability, as well as intent, to penalise errant promoters and/or realtors, or even allottees, it will only boost the faith of people towards the RERA and the real estate sector, as a whole.

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Category: Lifestyle

Debora Berti

Università degli Studi di Firenze, IT

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