The Supreme Court on Monday directed all petitions challenging the validity of the Real Estate (Regulation and Development) Act (RERA) to be heard by the Bombay High Court.
With this order, the proceedings against the Act pending before 21 High Courts got stayed. The Apex Court requested the Bombay High Court to expeditiously deal with all aspects of challenges raised by real estate builders and promoters who have to mandatory register their projects under the Act and even pay penalty for delay in delivery of flats.
The Centre had approached the court with a transfer petition seeking shifting of proceedings against the Act, pending before various High Courts. The Bench of Justices Arun Mishra and M Mohan Shantanagoudar felt that the issue may be decided first by a single High Court, and chose Bombay High Court to be the nodal High Court.
The RERA was implemented in several states from May 1, 2017 and was meant to serve an effective legal safeguard for homebuyers who had no remedy to seek compensation and damages for irregularities committed by the builders. Even there was no accountability on part of the builders to complete the project within stipulated time and hand over possession to consumers.
Keeping these intentions in mind, the RERA conceptualized of a real estate regulatory authority in each state to deal with consumer complaints and work out its redressal. The Act made it mandatory for all ongoing and new housing projects to be registered with the Authority, failing which it would be declared illegal and the developer could be sent to jail.
Another important aspect of RERA required the builder to put the money received from the buyer into a separate bank account relating to that project. By doing this, the Centre intended to stop the malpractice prevalent among builders and real estate promoters to use money from one project to finance its other housing projects.
In addition, there will be a five-year warranty for any structural defects from the date of handing over possession and any changes in the structural or project plan cannot be initiated without writtenconsent from the buyer. In case of delay or deviation in the project, the buyer would be entitled to penalty while the builder was liable to suffer a maximum jail term of three years.