Fraudulent Homebuyers To Be Jailed Under RERA

By: | In: Real Estate Act | Create Date: 2017-08-24


It has been two months since the implementation of RERA on May 1st, 2017 that marked the beginning of a new era in real estate sector. Two months post, the dust has lastly settled on Real Estate (Regulations and Development) aka RERA and the builders, developers, and buyers are finding themselves familiar with the rules of this reformative act. It is a consumer-centric act that would empower the buyers and make them the king in the real estate sector. The act would give the buyer the power to keep a keen eye on each and every step of the development process of the projects where they invest. It is a sigh of relief for all the homebuyers felt that real estate India was driven by the dishonest builders and developers; this act has made Indian real estate a more customer-centric market.


While most of the buyers are delighting at this new reform that has made them the king of the real estate market, there is yet another dimension to the act that most of the buyers may still be unaware of. Bursting the bubble of homebuyers delight is the Section 68 of the RERA Act that says that homebuyers may also be faced with a jail term of up to one year if they failed to comply with all the RERA rules. Yes, although RERA is an advantage-buyer act, the Indian government has made sure that the buyers do not make unethical use of this law.


What Does The Act Say?
According to Section 68 of the Real Estate (Regulations and Development) Act, “If any allottee, who fails to comply with, or contravenes any of the orders or directions of the Appellate Tribunal, as the case may be, he shall be punishable with imprisonment for a term which may extend up to one year or with fine for every day during which such default continues, which may cumulatively extend up to ten per cent of the plot, apartment or building cost, as the case may be, or with both.”


The Need For This Clause
While majorly, it is the homebuyers who have felt threatened or cheated by the builders, there are some instances where the builders, especially the smaller ones, have been manhandled by the buyers. The case of Sumit Sehrawat, a 28 years old man living in Old Gurgaon, is the perfect example of homebuyers using unscrupulous means against builders. Sumit Sehrawat, along with his four friends applied for flats in a project in Daruhera. While Sumit brought the flat, his friends gave up on it due to fund crunch. They manhandled the builder when he refused to pay the entire sum back and even threatened him to lodge a false complaint against him.


Such cases are the reason why the government took the extreme step and decided to keep a strong balance in the RERA Act. This clause would ensure that the law is balanced on both the sides and neither the buyer nor the developer would be given undue advantage under this law.


What Do The Realtors Have To Say About This
Many real estate persons have shared their own opinion about the punishment for homebuyers under the RERA. While many believe that the clause was indispensable to have a fair play, others feel that there was no need to add this clause under the customer-centric act. Anuj Puri, Chairman, Anarock Property Consultants, voices in favor of this section and says, “In the past, developers have also had their issues with buyers, and any fair and just legislation must take a balanced view. This is why RERA will also hold buyers accountable.”


On the other hand, Abhay Upadhyay, head Fight for RERA trashes this provision and says, “The clause was not required at all. No country in the world makes rules for specific instances. There may hardly be any cases where a builder has filed a case against a consumer. Since the Act had to be balanced, the clause has been incorporated. In my opinion, it will not be invoked in the next 100 years.”


A genuine buyer would not have to worry about this jail term. On the other hand, the buyers who have been trying to may petty profits on illicit grounds by harassing the builder/developer would have to leave these unscrupulous practices. Well, it has just been two months of this act’s implementation; time will show how much of a use this provision would be.

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