Government Planning To Strengthen Recovery Mechanism For Homebuyers

Amid rising instances of builders not complying with refund and compensation orders passed by the state real estate regulators to pay to the affected homebuyers, the Union government is set to strengthen the recovery mechanism.

The Real Estate Regulatory Authority (RERA) was formed by the Centre to bring about transparency in the real estate industry.

Regulators have power to order refund and compensation for delay in project completion under the real estate law.

The issue of noncompliance by builders came for discussion at a recently held meeting of a sub-committee headed by Union Housing and Urban Affairs Secretary Manoj Joshi.

The sub-committee has been set up under the Central Advisory Council, which is chaired by Union Housing and Urban Affairs Minister Hardeep Singh Puri, to thrash out issues relating to the implementation of the real estate law, RERA.

The issue of non-recovery of dues from developers/builders was discussed in detail.

The ministry had written to chairpersons of six regulators to examine the issue of non-compliance of orders and suggest the way forward. In response, the regulators of Tamil Nadu, Gujarat and Maharashtra have responded and their suggestions are being examined.

The minutes also mention that the secretary of Uttar Pradesh regulatory authority expressed his concern about the non-compliance of orders passed by RERA. “He suggested that some recovery mechanism may be included in RERA,” it said.

Representing the homebuyers’ side, Abhay Upadhyay of Forum for People's Collective Efforts (FPCE) suggested having a recovery officer in every regulatory authority.

As per the ministry, Joshi has suggested to study data of one RERA wherein the recovery has not been made even though orders have been passed by the regulator.

The ministry is also setting up a committee to examine all the issues related to legacy stalled projects and suggest ways to complete them in a time bound manner.