The Central Consumer Protection Authority (CCPA), India’s newest regulator, plans to protect wronged homebuyers. While this is good news, it would mean treading on the toes of the existing regulator, Real Estate Regulatory Authority (Rera). How will this play out?
How does CCPA plan to help homebuyers?
It aims to take up a range of issues such as delays in construction and delivery, misleading ads, poor construction and breach of trust or lack of transparency. The regulator plans to do this by collaborating with Rera, and step in when existing mechanisms fail to resolve consumer complaints. CCPA’s engagement and its intervention would offer additional protection to aggrieved homebuyers. While Rera looks into many of these aspects, homebuyers are likely to benefit from CCPA’s wider purview from a consumer standpoint, such as monitoring online property platforms, or failure to offer certain services.
Why are homebuyers hassled in India?
Buying a home is the biggest investment people make in their lifetime. However, homebuyers have been victims of delays and missed promises by developers. Despite the turnaround in the real estate sector and the ongoing boom, buyers are affected by various factors. Misleading ads, lack of transparency and disclosures by developers and property agents, delays in project completion and handover—the list of challenges is endless. Recently, the Forum for People’s Collective Efforts (FPCE) called for targeted guidelines to protect homebuyers and ensure stricter penalties.
Read more: CCPA plans class action against firms selling substandard products
Why do homebuyers need additional protection?
Rera, consumer forums and courts of law have only managed to address some cases affecting homebuyers. An Advertising Standards Council of India (ASCI) report revealed 34% of ads in Maharashtra’s real estate market in April-September violated regulations. However, the penalties imposed on the developers were negligible, and the problem is widespread.
What has Rera’s record been like?
Rera has introduced delivery timelines, registration of projects and transparency in transactions. However, it remains work in progress. There are many instances where Rera has issued orders for recovery of penalty or refund and compensation for buyers, but builders have ignored them. The execution of recovery orders is below average, so homebuyers have had to reach out to other grievance redressal tribunals and forums. Maharashtra Rera has been more pro-active than those in other states.
Read more: Kolkata rising: How India’s cheapest property market is changing
Can CCPA and Rera work in tandem?
Rera is implemented at a state level. CCPA needs to work on individual cases, along with the regulatory authority in that particular state. This is not going to be easy. If CCPA handles complaints on its own, there could be an overlap with Rera. Much of CCPA’s work of protecting consumers overlaps with that of other regulators too, such as in telecom, aviation and food manufacturing. In real estate, two regulatory authorities engaging in a turf war is not something homebuyers would like to see.
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