The Ministry of Housing & Urban Affairs (MoHUA) has issued an advisory to states, union territories, and state-specific real estate regulatory authorities (RERA), urging them to establish a recovery mechanism and appoint a recovery officer under their respective recovery laws. This directive is modelled after the approach adopted by the Gujarat Real Estate Regulatory Authority, with the primary objective of ensuring the collection of outstanding payments from defaulting real estate developers. Concerns have been raised by homebuyers regarding the non-compliance or delayed enforcement of recovery orders issued by authorities against defaulting developers.
Previously, the ministry had solicited input from six RERA authorities, including Tamil Nadu, Maharashtra, Gujarat, Uttar Pradesh, Haryana, and Karnataka, seeking suggestions to ensure the effective and timely execution of orders outlined in the Real Estate (Regulation & Development) Act, 2016.
Following this request, the ministry received feedback from real estate regulatory authorities in Tamil Nadu, Gujarat, and Maharashtra. During the second meeting of a sub-committee formed under the Central Advisory Council (CAC), the ministry announced that it has recommended all states to adopt the Gujarat model.
Abhay Upadhya, President of the Forum for People?s Collective Efforts (FPCE), a pan-India homebuyers' body, expressed optimism about the ministry's suggestion, stating that it addresses the challenges faced by homebuyers nationwide in enforcing refund orders. He emphasised that adopting the proposed model could significantly boost confidence in both the effectiveness of RERA and the real estate sector.
During the meeting, FPCE's General Secretary MS Shankar emphasised the need for RERA authorities to prioritise protecting homebuyers' interests and regulating the sector by eliminating prevalent malpractices. He also raised concerns about the lack of available data on the websites of realty authorities, such as lists of completed projects and those with completion certificates.
Manoj Joshi, Secretary of MoHUA and Chairman of the CAC sub-committee, acknowledged the data deficiency as a significant gap, revealing that none of the authorities are maintaining data adequately, as indicated in the minutes of the second meeting of the CAC sub-committee.
The FPCE highlighted its study of the Karnataka Real Estate Authority, revealing that only 25% of recovery certificates (1,212 out of 4,000 cases) had been issued, with no information available on the recovery status of these orders. On a positive note, the minutes reported that UP RERA successfully recovered over Rs 8 billion through 400 recovery certificates from projects launched in 2012, 2013, and 2014.
