Important for : GS Prelims — Polity & Governance
Constitutional & Legislative Basis
To regulate the contractual relationship between homebuyers and promoters and ensure transparency & accountability in the real estate sector Real Estate (Regulation and Development) Act, 2016 (RERA) was implemented by Parliament though ‘Land’ and ‘Colonization’ (Entry 18, List-II) are State subjects this was enacted under Entries 6, 7 & 46 of List-III (Concurrent List), Seventh Schedule by the parliament.
Regulatory Provisions
- Mandatory registration of projects with the Regulatory Authority before advertisement, marketing, booking or sale.
- Penalty up to 10% of estimated project cost for non-registration/contravention.
- Promoters must deposit 70% of homebuyer funds in a separate (escrow) bank account, usable only for land cost & construction.
- Mandatory disclosure of project details & approvals to buyers.
Dispute Resolution Mechanism
- Fast-track disposal of disputes within 60 days.
- Section 40: recovery of unpaid interest/penalty/compensation as arrears of land revenue.
- Three-tier enforcement: Adjudicating Officer -> Regulatory Authority -> Appellate Tribunal.
Institutional Architecture
- Section 41: Central Advisory Council (CAC), chaired by the Union Minister of Housing & Urban Affairs.
- CAC advises the Central Government on RERA implementation & homebuyer protection.
- State-level Real Estate Regulatory Authorities and Appellate Tribunals implement RERA on the ground.
Conclusion
RERA institutionalises real estate accountability through mandatory registration, escrow-based fund protection, time-bound dispute resolution and a Centre-State regulatory architecture (CAC, State RERAs, Appellate Tribunals).
| Important CTC from this article for UPSC Real Estate (Regulation and Development) Act, 2016 (RERA)Schedules of the Indian Constitution. |