Homebuyers’ Association Urges Govt To Amend Rera, Plug Loopholes In Act

The Forum for People's Collective Efforts (FPCE), a pan-India homebuyers association, has urged the government to amend the Real Estate (Regulation and Development) Act, 2016 to strengthen the consumer protection framework.

In a letter to Union Minister for Housing and Urban Affairs, Mahonar Lal, FPCE president Abhay Upadhyay, who is also the member of the Central Advisory Council of Rera, highlighted critical gaps in the Act, which renders homebuyers at a disadvantage when builders default on their promises of delivering homes on time.

Verify Builders’ History Before Allowing New Projects

In his letter, Upadhyay called for implementing mechanisms to verify the builders’ history in terms of credibility before granting them permission to launch new projects. He said there should be a dedicated section in Rera to address situations when builders and developers don’t fulfil their commitments related to projects.

He also called for provisions to ensure compensation to homebuyers when developers fail to deliver their promised projects, and suggested refund procedures in case of unit cancellations

The body also suggested that the Ministry of Housing issue a standard operating procedure, directing all state Rera authorities to ensure developers deposit sufficient funds as safety, which then should be closely monitored. He said these steps would hold group companies, promoters, shareholders, and brand names accountable in delivering projects to their customers (homebuyers).

If any entity is found providing wrong information, the FPCE should also ensure that they are barred from engaging in real estate activities in all states, he added.

Loophole Allowing Dubious Builders To Launch New Projects

Upadhyay said there is no formal structure to assess a promoter’s past conduct and project history before projects are approved. As of now, Rera does not check whether a builder or developer has settled their past dues with allottees or paid penalties imposed on them. This is a loophole that allows developers with a poor and dangerous track record to continue working and launching projects, leaving more buyers vulnerable. As such, Rera must ensure that developers deliver a declaration confirming their clearance as a green chit to work on new projects. This will not only safeguard buyers but also help prevent fraud.

He further said that unlike the Food Safety and Standards Authority of India (FSSAI) certifications that work in consumer product safety, Rera registrations have failed to become a symbol of trust for homebuyers.