Relief for home-buyers

The Haryana Real Estate Regulatory Authority (HRERA) has ruled that builders and promoters of real estate projects must pay customers the assured monetary returns mentioned in the builder-buyer agreement. Hearing a bunch of 26 cases, a HRERA Bench stated that promoters or builders cannot evade paying returns to a customer by contending that the assurance was made before the enforcement of RERA Act (2016) or any other law. This is a significant judgment that should go a long way in securing the interests of home-buyers and investors and protect them from unscrupulous elements. Typically, such builders and promoters lure buyers by promising them a monthly income on the money paid by them as cost of a unit of property. With this ruse, they collect close to 100 per cent cost of a unit and leave buyers in the lurch. No monthly income may be forthcoming, construction may be slow, projects may be delayed and in the worst cases, builders and promoters may simply disappear.

In the four years since HRERA was set up in Gurugram, the majority of complaints it received pertained to delay in giving possession and issuing of refunds. The story is the same in most other construction hubs in the country as the economic downturn of the last several years has been exacerbated by demonetisation and the Covid-19 pandemic, causing delays in construction and completion of projects.

The real estate sector is a major contributor to the growth of economy, but is riddled with malpractices and lacunae. Earlier this month, the Supreme Court lamented that ‘builders can put in any clauses’ and that there was no uniformity in agreements. The court emphasised the need to frame a model builder-buyer agreement under RERA. ‘This is an important issue of consumer protection, which is put on back-foot,’ observed a Bench. Everyone wants a home, but many buyers end up bitter and poorer if they get into the clutches of the wrong kind of builder/promoter. The RERA Act has helped, and HRERA’s new judgment should help in restoring consumer confidence.