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Developers Want RERA to be First Point of Redressal for Homebuyers
The Economic Times  |  November 15, 2019

Faizan Haidar New Delhi

Property developers in the country are pushing for the Real Estate Regulatory Authority to be the first point for redressal of complaints by homebuyers. With most cases in the National Company Law Tribunal pertaining to real estate, several projects have been stalled and developers and the industry body have called for changes in the law. According to the Confederation of Real Estate Developers Association of India, 65% of the cases in the NCLT are related to real estate projects.

 

“Buyers are unnecessarily dragging cases to the NCLT and that is why we are demanding that RERA should get exclusive rights to deal with complaints related to the sector,” said Jaxay Shah, managing director of Ahmedabad-based Savvy Infrastructures. “We have the National Green Tribunal for environment-related cases and likewise, RERA should be the only agency to deal with complaints.”

 

Shah is also chairman of the Confederation of Real Estate Developers Association of India.

 

Developers are now asking for RERA to be the first point of complaint for homebuyers. At a recent RERA conclave, buyers acknowledged that individuals approaching the NCLT was a problem. “We have been advising the government to create an escalation mechanism and let RERA act and decide first and if you are unhappy, you can go to another available forum. Today, people are going to RERA, NCLT and the consumer forum, which is not ideal,” said Nimish Gupta, MD, South Asia RICS (Royal Institution of Chartered Surveyors), a professional body that represents the interests of all stakeholders in the sector.

 

Developers said the NCLT should take up cases only when there is a minimum number of buyers. While RICS suggested the floor should be property accounting for 10% of the total value of the project or 10% of the number of buyers, developers said it should be two thirds of the buyers. Developers claim that in some cases, a single buyer has moved the NCLT, halting construction of an entire project.

 

“Legally, some amendments need to be carried out in the existing act, but percentage should not be criteria. However, there can be a minimum number of homebuyers since going to NCLT has the ability to derail the entire project,” said Biswajit Dubey, a partner at Cyril Amarchand Mangaldas, a law firm.

 

“Having duality of jurisdiction is not solving the problem. We are not scared of the duality &ndash we are scared that duality is not solving the problem. We are interested to see the project getting completed. Either you ensure duality doesn’t create a problem or you say no, one law will be superior to other,” said Niranjan Hiranandani, president of the National Real Estate Development Council.