Homebuyers Raised To Financial Creditors. Does It Put RERA At A Disadvantage?

The Indian real estate market never really had the luxury of a regulatory body before the Real Estate Regulatory Authority (RERA) was put in place. After 2016, one can claim that he or she has the advantage of heading towards a regulatory body that could enforce certain property-related laws. However, some recent developments have shaken the foundation of RERA.

Ever since the Insolvency and Bankruptcy Code, 2016 (IBC) has declared homebuyers as financial creditors, empowering them enough to be able to drag defaulting builders to court, the Maharastra RERA has found it thwarting its existence. A simple example is that of non-banking services which is under Securities and Exchange Board of India (SEBI) and all concerns are addressed and taken up by the regulator.

Meanwhile, experts are trying to understand the implications of the new ordinance. While some say that it may have already dwarfed the position of RERA, others are of the opinion that there may be loopholes that builders may be just too ready to exploit. Moreover, there would be additional issues that crop up due to the differences in the definition of a ‘consumer’ that could be one who seeks a refund as also, the one who is asking for the project to be delivered. Gautam Chatterjee, chairman, MahaRERA was quoted as saying in an Economic Times report, "As a regulator, I feel that if the project is registered with the RERA, every problem that a consumer faces has to be resolved by RERA only.”

Know where homebuyers stand post this development. Read Homebuyers Are Now Financial Creditors