Understanding the Real Estate Regulatory Authority [RERA Authority]

The real estate sector is an essential part of the Indian economy. It provides homes to millions and drives significant employment. However, until recently, the sector suffered from delays, lack of transparency, and disputes that left buyers vulnerable. Recognising these challenges, the Government of India enacted the Real Estate (Regulation and Development) Act, 2016 (commonly known as RERA).

One of the most crucial features of this Act is the establishment of the Real Estate Regulatory Authority or RERA Authority in each State and Union Territory. This Authority is the cornerstone for implementing the Act’s objectives: bringing transparency, accountability, and fair play to the real estate market.

This article discusses in detail what the RERA Authority is, how it functions, and why it is so important for buyers, promoters, and agents in the real estate sector. We will explore its composition, powers, functions, and the role it plays in promoting a healthy real estate environment in India.

The Genesis and Purpose of the RERA Authority

Before the RERA Act, the real estate market was plagued by several issues. Buyers were often left in the dark about project delays, poor quality of construction, and unfair contract terms. Multiple regulatory authorities and unclear legal remedies created confusion and delays.

The RERA Act aimed to solve these problems by providing:

• A regulatory authority for each State/UT to oversee real estate activities.
• A platform for buyers and promoters to resolve disputes quickly.
• Transparency in project approvals, marketing, and financial dealings.

The RERA Authority is a statutory body created under Section 20 of the Act. It is responsible for ensuring that the provisions of the Act are implemented effectively. Every State or Union Territory is required to establish its own RERA Authority, usually within one year of the Act coming into force.

Establishment and Legal Status of the RERA Authority

Establishment Timeline and Flexibility

As per Section 20(1) of the Act, the appropriate Government (State or UT) must notify and establish the RERA Authority within one year from the date of commencement of the Act.

If it is deemed appropriate, two or more States or Union Territories may choose to establish a single joint Authority. This option helps in pooling resources and expertise where feasible.

Also, a large State may establish more than one RERA Authority to ensure efficient functioning across different regions. For example, Maharashtra has multiple benches in Mumbai, Pune, and Nagpur.

Interim Arrangements

Until the formal establishment of the RERA Authority, the Government can designate an officer—often the Secretary of the Housing Department or a similar senior official—to act as the Regulatory Authority.

All pending applications, complaints, or cases that were under the earlier designated Authority or officer are transferred automatically to the newly established Authority.

Legal Personality

The RERA Authority is a body corporate with perpetual succession and a common seal. This means it can:

• Acquire and dispose of property (both movable and immovable).
• Enter into contracts.
• Sue or be sued in its own name.

This legal status empowers the Authority to operate independently and effectively.

Composition of the RERA Authority

Structure

According to Section 21, the Authority consists of:

• One Chairperson
• At least two whole-time Members

The Government may appoint more Members depending on the size and needs of the State or UT.

Qualifications and Appointment

Section 22 specifies the qualifications required for the Chairperson and Members:

• The Chairperson must have at least 20 years of professional experience in fields such as urban development, housing, real estate development, infrastructure, economics, law, commerce, accountancy, industry, management, social service, or public affairs.
• Members must have at least 15 years of similar experience.
• If the candidate is a government official or a retired government employee, the Chairperson must have held a post equivalent to Additional Secretary in the Central Government. Members must have held the post of Secretary to the State Government or an equivalent post.

The appointments are made by the appropriate Government based on recommendations from a Selection Committee. This Committee includes the Chief Justice of the High Court or their nominee, the Secretary of the Housing Department, and the Law Secretary.

This process ensures that competent and impartial individuals are appointed.

Term and Tenure

As per Section 23, the Chairperson and Members:

• Hold office for a term of up to five years or until the age of 65, whichever is earlier.
• Are not eligible for reappointment, ensuring fresh perspectives over time.

Before appointment, the Government must ensure that the person has no financial or other interest that may affect their impartiality.

Service Conditions and Removal

Salary and Allowances

The Chairperson and Members receive salary and allowances prescribed by the Government. These terms cannot be reduced to their disadvantage during their tenure, ensuring financial independence.

Resignation and Removal

They may resign by giving a written notice of at least three months.

Removal from office is allowed only on specific grounds such as:

• Insolvency
• Conviction for offences involving moral turpitude
• Physical or mental incapacity
• Acquisition of financial or other interests prejudicial to their functions
• Abuse of position to the public’s detriment

Removal on certain grounds requires a formal inquiry by a High Court Judge, ensuring due process and fairness.

Post-Tenure Restrictions

To avoid conflicts of interest, Section 27 places restrictions on the Chairperson and Members after their tenure ends:

• They cannot accept employment or act on behalf of any person or organisation connected with any work under the Act from the date of cessation of office.
• This restriction does not apply to employment in the Government, local authorities, statutory bodies, or Government companies that are not promoters under the Act.
• They are also barred from giving advice based on confidential information obtained during their tenure.

These provisions help maintain the integrity of the Authority.

Administrative Powers and Staff

Powers of the Chairperson

Section 25 empowers the Chairperson to exercise general supervision and give directions in the conduct of the Authority’s affairs. The Chairperson presides over meetings and oversees administrative matters.

Appointment of Staff

The appropriate Government, in consultation with the Authority, appoints officers and employees necessary for the efficient functioning of the Authority.

The staff work under the general supervision of the Chairperson. Their salaries and service conditions are prescribed by the Government.

Meetings and Decision-Making

• Procedure of Meetings: Section 29 mandates that the Authority holds meetings at times and places as decided. The Authority frames regulations for its meetings, including quorum and voting procedures.
• Presiding Officer: If the Chairperson is absent, the Members present elect one amongst themselves to preside over the meeting.
• Decision-Making: Decisions are made by a majority of votes. In case of a tie, the Chairperson or the presiding Member has a casting vote.
• Timely Disposal: The Authority must dispose of applications or complaints within sixty days from the date of receipt. If it is unable to do so, it must record the reasons for delay in writing.

This provision promotes speedy resolution of disputes.

Jurisdiction and Powers

Filing Complaints

Any aggrieved person, including associations of allottees or consumer associations, can file complaints against promoters, allottees, or real estate agents for violations of the Act or its rules.

The complaint must be filed in the prescribed form, manner, and accompanied by the prescribed fee.

Registration and Regulation

The Authority registers real estate projects and agents. It maintains a website where the public can view:

• Details of registered projects
• Registered agents
• Defaulter lists with reasons for penalisation or registration revocation

Standard Fees

The Authority fixes standard fees payable by promoters, allottees, or agents for services under the Act.

Enforcement

The Authority ensures compliance with the Act, rules, and its own orders or directions. It has powers to impose penalties and interest on defaulting parties.

Investigative Powers

The Authority has the power to:

• Call for information or explanations from promoters, allottees, or agents.
• Appoint persons to inquire into any matter related to real estate projects or dealings.

It has the same powers as a civil court under the Code of Civil Procedure, 1908, including:

• Summoning and enforcing attendance of persons.
• Examining witnesses under oath.
• Ordering discovery and production of documents.
• Issuing commissions for witness examination.

These powers enable the Authority to conduct thorough investigations.

Interim and Binding Orders

Interim Orders

During inquiries, if the Authority is satisfied that a violation has been or is about to be committed, it can issue an interim order restraining any party from continuing the act, without prior notice.

This helps prevent further damage or loss to the complainant.

Binding Directions

The Authority can issue directions to promoters, allottees, or agents as necessary to carry out its functions. These directions are binding on the parties.

Penalties and Dispute Resolution

Penalties

The Authority may impose penalties for contraventions such as:

• Failure to register projects or agents
• False or misleading advertisements
• Non-compliance with orders
• Delay in handing over possession

The penalty can be a fine or interest calculated on the amount collected from allottees.

Reference to Competition Commission

If the Authority finds any anti-competitive practice, such as cartelisation or abuse of dominance, it may refer the matter to the Competition Commission of India.

Rectification of Orders

The Authority can amend its orders to correct any apparent mistakes within two years of the date of the order. However, it cannot alter substantive parts of the order once an appeal has been filed.

Enforcement and Recovery

Recovery of Dues

If a promoter, allottee, or agent fails to pay any interest, penalty, or compensation ordered by the Authority or the adjudicating officer, such amount can be recovered as arrears of land revenue.

Enforcement of Orders

Non-compliance with orders or directions issued by the Authority can be enforced in the manner prescribed by the Government. This gives the Authority teeth to ensure its decisions are respected.

Conclusion

The RERA Authority is the pillar on which India’s modern real estate regulatory framework rests. It has successfully introduced transparency, accountability, and consumer protection that were missing earlier.

By providing a one-stop platform for registration, complaint redressal, and dispute resolution, the Authority brings confidence to buyers and discipline to promoters and agents.