Despite UP RERA’s Decisions, Relief for Buyers Is a Distant Dream

UP Real Estate Regulatory Authority has held builders accountable, providing some relief to wronged buyers.

Shashi Arora, Sanjay Sharma and Syed Mohammed Anwar had braced themselves for a legal battle, but, thanks to a welcome decision made by the UP Real Estate Regulatory Authority (RERA), they were saved the ordeal.

All three had complained against IVR Prime Developers (Awadi) Pvt Ltd and Ajnara India Limited in the UP RERA because their flats had not been handed over to them on time. Some of the complainants had also demanded interest on the payments made to the builder due to delay in possession.

To Arora, Sharma and Anwar’s relief, UP RERA stated that the builders’ responsibility to the customers will be fixed on the bases of the deadline mentioned in the Builder Buyer Agreement and not the delayed deadline submitted to RERA during the time of registration.

UP RERA Rules in Favour of Buyers

According to the Builder Buyer Agreement, the complainants were to get possession of their flats by January 2018. The builders argued that during the registration with RERA for the project in Phase 1, the deadline given was of December 2019 and hence, the demand for compensation is premature.

RERA, however, ruled that despite the date provided to them by the builders, the date will be deliberated upon by what was promised to the buyers. RERA has asked the builders to pay the compensation, which will be Rs 5/foot as mentioned in the BBA. The decision can affect thousands of buyers in the state.

The rate for compensation is to be calculated by the Marginal Cost of Funds based Lending Rate (MCLR), which is the minimum rate at which the banks give out loans + one percent annual interest rate on the MCLR. UP RERA also said that if the buyer is paying EMI and the possession of the flat is not received, then the builder will have to adjust the EMI of the buyer in the final payment.

Bold Decisions, but Little or No Implementation

Now that UP RERA has given a decision in favour of the buyers, it remains to be seen if it will be implemented by builders on the ground. This is not the first time that RERA has ruled in favour of the buyers.

RERA de-registered three projects by the Unnati Fortune Holdings in Noida. The builder has started projects called Aranya 2,3 and 4 in Sector 119 of Noida. But even after 12 years, nobody has got their home.

After receiving complaints, RERA went for a ground inspection and found that the extent of the fraud was massive. Financial irregularities and double allotments were exposed. UP RERA took the unprecedented step of de-registering the entire project. Now it is in the hands of those who paid for it. They can either take the matter into their own hands or follow the procedure under RERA. What path they take remains to be seen.

Another pro-buyer move of the RERA has been to advertise projects in Noida and Greater Noida where developers have left the buyers in the middle of construction and flouted deadlines.

RERA came into being due to the RERA Act of 1 May 2017. UP RERA was then set up by August 2018. Within a month, they began dealing with complaints. Of the 13,000 complaints received thus far, approximately 7,000 have been disposed of. While they’re doing their bit, the biggest hurdle of the RERA is to ensure its decisions are implemented. Currently, the process is very slow. Unless implementation is effective, for wronged buyers, relief will remain a distant dream.