Real estate regulator

Real Estate Regulation Act and its authority are constitutional, rules Bombay High Court

The bench, however, allowed developers some leeway by permitting the Rera authority to consider construction delays on a case-by-case basis.

The Bombay High Court on Wednesday upheld the validity of the Real Estate (Regulation and Development) Act while hearing a batch of petitions that questioned its constitutional authority, PTI reported.

The law, better known as “Rera”, was passed in March 2016 with the aim to bring about transparency, accountability and efficiency in the real estate sector and also protect genuine home buyers.

According to the act, which came into effect in May, all builders have to register their projects with a state-level housing regulatory authority. Buyers can claim compensation if there are delays in possession, and the project and the developer’s registration can be revoked if fraudulent practices are found.

The petitions, filed by real estate developers and individual plot owners, claimed that the act and the creation of the authority were arbitrary and, therefore, unconstitutional.

“Rera is not a law relating to only regulatory control of the promoters, but its objective is to develop the real estate sector, particularly the incomplete projects across the country,” a bench of justices Naresh Patil and Rajesh Ketkar said.

Observing that there were numerous problems in the sector, the court said it was critical to protect the interest of flat buyers across the country. The bench, however, cut the developers some slack by allowing the state-level Rera authority and the appellate tribunal to consider delays on a case-by-case basis.

“In case the authority is satisfied that there are exceptional and compelling circumstances due to which a developer could not complete the project in spite of the one-year extension granted, then the authority will be entitled to let the developers’ registration continue,” it said.

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