The essential reason behind implementing RERA was to make the framework more transparent between the developers and homebuyers, in such a way that there’s advantage for both the segments. The benefit of the home-buyers are considered the topmost importance and the RERA Act ensure ultimate consumer satisfaction.
Maharashtra’s real estate segment regulator MahaRERA has challenged the reason behind government’s decision with regards to treating homebuyers as financial creditors by giving them power to drag their developers to NCLTs, saying the decision of the government whittles down its powers.
City-based buyer body Mumbai Grahak Panchayat (MGP) likewise supported alike views, saying it would have been better if the administration enabled RERA itself since it is a special law to manage the real estate sector and not to take the IBC course.
Gautam Chatterjee, chief of MahaRERA feels that the RERA ought to be the sole expert to review home buyers grievances in the realty space despite the fact that he has respected the Central government decision to enable homebuyers by giving them the status of financial creditors under the bankruptcy law.
MahaRERA, the primary watchdog to be set up in the nation, has opined that there is no compelling reason to pointlessly make a comprehension or misconception for homebuyers whether to go to the RERA or the National Company Law Tribunal (NCLT) if their builder neglects to finish the project on time.
Mr. Chatterjee stated that as a controller, he feels that if the undertaking is registered with the RERA, each issue that a customer faces must be settled only by RERA.
On June 6, President Ram Nath Kovind had declared the Insolvency Bankruptcy Code (Amendment) Ordinance 2018 that perceives homebuyers as financial creditors under the insolvency law, or the IBC.
This would give them due portrayal in the committee of creditors and make them an essential part of the adjudication or the basic decision making process.
Mr. Chatterjee questioned that despite the fact that the administration should deal with this issue between the housing ministries and corporate issues, since we have a particular law for the real estate sector, for what reason should a general law that is intended for all insolvency issues apply to a particular law?
Referring to the case of non-banking financial services suppliers being exempted from the IBC as there is SEBI to investigate issues in regards to them, he stated, then for what reason should real estate be incorporated if there is as of now RERA to control the segment?
Reverberating similar perspectives, member of MGP Shirish Deshpande stated that they are examining the repercussions of this decision. On its substance, they feel that as opposed to enabling homebuyers to drag developers to the NCLT, for what reason not enable RERA itself since it is a special law to manage the real estate?
He said distinct from the other organizations, in the real estate space, there are two sets of buyers – the individuals who need their cash back in the event that the developers defaults and other people who might wait till the developer finishes the venture, as the homebuyers have already invested their cash.
Deshpande pondered that in case there is an incomplete venture and there is no general group of people formed. At that point you have the home buyers with varied interests. Along these lines, in this circumstance who will represent the buyers.
He further added that MahaRERA and the MGP are intending to approach the authorities responsible to harmonise the whole framework and to persuade them to enable RERA to deal with a wide range of land related issues.
“Once the case is conceded in the NCLT, the most tragic impact is that the very following day the board of directors of that organization gets suspended and all the cases against the developer gets stayed whether they are in RERA, or consumer courts or civil court or any such forum.
He additionally felt that the Act can likewise be abused by a few developers. Along these lines, we need RERA to be the sole authority.
Chatterjee likewise said the MGP and MahaRERA will hold conversations with builder affiliations like Credai and Naredco and in case they agree their view, we would take it to the next level.
The Maharashtra Real Estate Regulatory Authority (MahaRERA) was established after the Real Estate Regulation Act (RERA) came into force. Maharashtra was the main state to set up the authority under the act enacted in 2016.
At last,the purpose and the objective for Enacting Insolvency and Bankruptcy Code is different as Compared to Real Estate Regulation Act (RERA), which explicitly focuses in resolving land sector disputes.
Disclaimer – The readers are expected to take expert opinion before placing reliance on it.