Mumbai: Take action to avert such mess in future, forum tells union min

The scam involving projects built by Karrm Infrastructure is one of the many instances where home buyers have their money and homes stuck

A Kolkata-based non-profit, Forum for People's Collective Effort (FPCE), working for the protection of consumers and home buyers across India has written to Union Housing Minister Hardeep Singh Puri regarding a recently submitted report on real-estate projects, by a committee led by former NITI Aayog CEO Amitabh Kant. The letter expresses concerns and makes recommendations to prevent the ensuing chaos in the sector.

The non-profit was formed by the core committee members of Fight For RERA (FFR) under Section 8 of the Companies Act, 2013. It aims to be a watchdog for policies, laws, and regulations to ensure consumers' and home buyers' interests are protected.

The plight of home buyers is reflected in scams like the one involving Karrm Infrastructure Private Limited wherein MahaRERA registration was obtained using forged documents.

Abhay Upadhyay, president, FPCE

Abhay Upadhyay, president, FPCE, and member, Central Advisory Council, RERA (Ministry of Housing and Urban Affairs) told mid-day, "The Amitabh Kant-led committee has given recommendations which will certainly help complete stalled projects. At the same time, it should also have addressed the reasons for the sector landing in this mess. The committee has failed to identify wilful defaulting builders who enriched themselves with the hard-earned money of homebuyers and have not recommended blacklisting of such builders."

"We are concerned that we may land in a similar situation of huge stalled projects again and homebuyers will again end up with their hard-earned money stuck," Upadhyay added. "Our recommendations will ensure that trust in the sector is restored and it stays free from such issues forever," Upadhyay said.

Points made

FPCE's letter expresses concern about the effectiveness, integrity, commitment, and enforcement of RERA. To support its concerns, FPCE cites the possibility that there still exist projects that are not registered under RERA and highlights the fact that promoters continue to ignore the quarterly updation of project information, as mandated by RERA. The letter points out that in the case of the latter, regulatory authorities are only issuing notices instead of imposing penalties.

The letter further cites the committee's recommendation for delayed projects being eligible for state- or RERA-led resolutions. The recommendation has included projects that began after RERA's establishment in 2016 as eligible. The letter states, "This clearly suggests that even projects initiated after the implementation of RERA are experiencing delays and issues. This again raises doubts about the effectiveness and functioning of RERA in preventing project delays and ensuring timely completion which was one of the prime objectives of RERA."

FPCE also expressed concern about asking home buyers with pending payments to pay directly to RERA, instead of builders, which FPCE believes reflects a lack of trust in builders and RERA's failure to restore faith in the sector and in builders. "It's very sad and disappointing that the Committee did not recommend blacklisting of such builders who cannot be trusted with the hard-earned money of homebuyers though we had suggested in our representation to the Committee," the letter states.

The letter raises the committee's recommendation of a fresh three-year extension for projects without charging any penalties; and concessions and exemptions for builders without specifying qualifying criteria, which may give builders the idea that all are eligible to them. The committee's report mentions that there are 4.12 lakh stressed dwelling units involving R4.08 lakh crores. However, the letter questions why recommendations have not been made to prevent such dire situations. The recommendations, the letter states, are inadequate to reassure home buyers and safeguard their interests.

FPCE's recommendations

One of the key suggestions by FPCE is to establish a ‘RERA Monitoring Committee' (RMC) primarily composed of homebuyers, distinguished independent individuals, and reputable non-profit organisations. "Notably, this committee should exclude any involvement of builders or their organizations," the letter states. "The RMC's primary role would be to scrutinise the deviations, operational practices, and overall functionality and intent of the RERA Authorities. The RMC could present its findings to the Central Advisory Council during its meetings," the letter explains. Further, FPCE recommends that the same Kant-led committee, or another one, recommend actions to prevent future debacles and protect home buyers.

FPCE has also recommended that the current report by the committee be accompanied by clarifications that concessions and exemptions to builders will be limited to legacy stalled projects, that extensions should be on a case-to-case basis, that builders with projects stalled for more than two years should be blacklisted, and that home buyers in projects that receive extension should be compensated.