Provisions of RERA already provide a robust regulatory mechanism and a draft agreement to sell: Centre in its reply affidavit filed in plea seeking uniform builder buyer agreement

The central government has told Supreme Court that the provisions of Real Estate (Regulation and Development) Act 2016 already contemplates a robust regulatory mechanism and a draft agreement to sell. It has said so in in its counter affidavit filed in a writ petition seeking court’s direction to frame a ‘Model Builder Buyer Agreement

The affidavit filed by the Ministry of Housing and Urban Affairs states that the real estate sector was largely unregulated prior to the RERA regime. It is further stated that the RERA ensures transparency, accountability and financial discipline in the real estate sector.

According the affidavit it mandates for registration of projects before advertising, marketing, booking and selling to the home buyers. The affidavit states that RERA also ensures that the funds collected for construction is used for the purpose thereby protecting the interest of the home buyers. The affidavit also states that RERA seeks to address vital issues of fair transactions, timely delivery, and quality construction through speedy adjudication of disputes.

The affidavit also states that if a developer fails to  complete the project as per terms of agreement for sale, a homebuyer can seek a refund of paid amount along with interest or ask for interest for every month of delay, till the handing over of the possession of the house.

According to the affidavit RERA provides for strict penal provisions of imprisonment in addition to provisions for refund, interest, and penalty in case of non-compliance by developers and allottees. The affidavit states that according to the act it is the duty of the State to notify rules for implementing the provisions of the act and that Section 84(2) of the act specifically mentions the form and particulars of the agreement to sell.

According to the affidavit the government has shared the draft 'agreement for sale' with all States & UTs in 2016 after the enactment of RERA. The affidavit further states that a letter dated 4th November 2016 was send by the government to the Chief Secretaries of all the States & Union Territories (UTs) and that Chandigarh’s draft agreement to sell was uploaded in the Ministry’s website for their reference. The affidavit states that the government has been following up with the States and UTs regarding the implementation of the agreement.

The affidavit states that the prayer against the government is infructuous as there is a robust regulatory mechanism and draft 'agreement for sale.' Under RERA which seeks to balance the rights and interest of homebuyers and promoters in an accountable and transparent manner.

Case title: Ashwini Upadhyay Vs Union of India