Status as on- 02/12/2022
Real Estate (Regulation and Development) Act, 2016 popularly known as RERA Act was enacted with the object of bringing efficiency and transparency in the real estate sector, protecting the interest of buyers, establishing the Real Estate Regulatory Authority for regulation and promotion of the real estate sector in an efficient and transparent manner and to establish an adjudicating mechanism for speedy dispute redressal.
Object of the act
The opening statement of objects and reasons which has a material bearing on the subject reads as follows: ‘The real estate sector plays a catalytic role in fulfilling the need and demand for housing and infrastructure in the country. While this sector has grown significantly in recent years, it has been largely unregulated, with the absence of professionalism and standardization and a lack of adequate consumer protection. Though the Consumer Protection Act, of 1986 is available as a forum to buyers in the real estate market, the recourse is only curative and is not adequate to address all the concerns of buyers and promoters in that sector. The lack of standardization has been a constraint to the healthy and orderly growth of the industry. Therefore, the need to regulate the sector has been emphasized in various forums”.
In view of the above concern, The Real Estate (Regulation and Development) Bill 2013, was introduced in the Rajya Sabha in 2013 and having been passed by both the house of the Parliament received the assent of the President on 25th March 2016.
Right to get a refund under section 18 of RERA
Apart from the project being statutorily regulated, certain authenticity has been attached with regard to the timely completion of the project and an obligation has been made upon both developers and home buyers to abide by the terms and conditions of the home buyer’s agreement and statutory compliance to the mandate of the law. Section 18 of the RERA Act puts an obligation on the developer to refund the amount along with compensating the buyer in case of default committed by the developers in delivering possession of the unit or in case the promoter fails to discharge any other obligations mentioned in the act or the rules and regulations made thereunder.
Ingredients of section 18
Section 18 of the Act provides the absolute and statutory right to the buyer to seek a return of amount and compensation in cases;
- Where the promoter has failed to complete or is unable to give possession of an apartment plot or building in accordance with the terms of the agreement of sale or is unable to complete by the date specified in the agreement;
- Where promoter fails to deliver possession on account of discontinuance of his business due to revocation of his project under this act or for any other reasons.
Hence, Section 18 (1) gives two kinds of rights to the buyers i.e. Right to get a Refund along with Interest and the Right to get Compensation.
The Promoter shall compensate the allottee in two cases-
a) Where any loss is caused to the allottee due to defective title of the land on which the project is developed;
b) Where the promoter fails to discharge any other obligations imposed on him under this Act or in accordance with the terms and conditions of the agreement for sale.
Filing of complaint section 31
Section 31- Filing of Complaints with Adjudicatory Authority or the Adjudicating officer – Any aggrieved person may file a complaint with the Authority or the adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder, against any promoter, allottee or real estate agent, as the case may be”.
Hence, the person aggrieved by the reckless and harassing attitude of the promoter can approach the competent authority for seeking a redressal refund and compensation under section 31 of the RERA Act.
The object of Section 18 of the RERA Act is to return the aggrieved allottee, his life savings with interest as computed by the authority. The application of section 18 of the Act is prospective in nature, so all the allottees, those who suffered on account of the promoter’s action who has failed to complete, or are unable to give possession of an apartment plot or building in accordance with the terms of the agreement of sale or is unable to complete by the date specified in the agreement, can seek the relief under section 18, after coming into force of the RERA Act. Moreover, the claim under Sec 18 sub-section (2), vis-à-vis defective title of the land on which the project is being developed shall not be barred by limitation provided under any law for the time being in force.