RERA or Consumer Protection Act: What to Opt as a Customer

Buying a home or a commercial property is one of the most significant investments for any individual. With the growing real estate sector in India, buyers have increasingly faced issues like project delays, poor construction quality, and misrepresentation by developers. When disputes arise, customers often wonder which legal remedy is more suitable — filing a complaint under the Real Estate (Regulation and Development) Act, 2016 (RERA) or approaching a Consumer Forum under the Consumer Protection Act, 2019.

Understanding RERA

RERA was enacted with the objective of bringing transparency, accountability, and efficiency to the real estate sector. It is a special legislation dedicated solely to regulating real estate transactions. The Act protects homebuyers by mandating registration of real estate projects and real estate agents and establishing State-level Real Estate Regulatory Authorities (RERAs) to oversee and resolve disputes.

Key Features of RERA

• Project Registration: Developers must register their projects with the relevant State RERA before marketing or selling units.
• Transparency: Details such as sanctioned plans, project timelines, approvals, and status updates must be publicly disclosed.
• Timely Possession: Developers are bound to complete and deliver the property within the stipulated timeline.
• Quality and Compliance: Promises regarding construction quality, amenities, and specifications are legally enforceable.
• Dedicated Forum: Complaints and disputes are handled by the State RERA Authority and its Appellate Tribunal, which have expertise in real estate matters.

Understanding the Consumer Protection Act

The Consumer Protection Act, 2019, is a general law designed to protect consumer rights across all goods and services, including real estate. It establishes Consumer Disputes Redressal Commissions at District, State, and National levels to hear complaints.

Key Features of the Consumer Protection Act

• Wide Coverage: Applies to complaints related to any goods or services, including property.
• Consumer Rights: Protects consumers against unfair trade practices, deficiency in services, and false/misleading advertisements.
• Compensation: Provides for monetary compensation, refund, removal of defects, or replacement.
• Central Consumer Protection Authority (CCPA): Empowered to conduct investigations, recall defective products, impose penalties, and file class-action suits.
• Three-tier Forum System: Allows complaints to be filed based on the value of the claim—District Commission (up to ₹1 crore), State Commission (₹1 crore to ₹10 crore), and National Commission (above ₹10 crore).

Major Differences Between RERA and Consumer Protection Act

Supreme Court’s Landmark Judgement on RERA and Consumer Forum: M/s Imperia Structures Ltd vs. Anil Patni & Another (2020)

A significant judgement that clarified the relationship between RERA and the Consumer Protection Act is the Supreme Court’s ruling in M/s Imperia Structures Ltd vs. Anil Patni & Another (2020).

The Court held that the provisions of RERA do not bar the homebuyer from approaching Consumer Forums under the Consumer Protection Act. Both remedies are available to the consumer simultaneously or independently. This means the buyer can choose which forum to approach depending on the nature of the dispute and relief sought.

This ruling balances the interests of homebuyers and builders by allowing freedom of choice, ensuring buyers are not forced to limit their options, and encouraging fair litigation.

When to Opt for RERA?

RERA is best suited for disputes that relate strictly to real estate contractual obligations and regulations. Some common scenarios where RERA is the preferred forum are:

1. Delay in Possession: If the builder fails to deliver possession by the agreed date.
2. Unregistered Projects: Projects that have not been registered under RERA can be challenged here.
3. Deviation from Plans: Changes in layout, carpet area, or amenities not consented to by buyers.
4. Defective Construction: Complaints related to substandard quality or non-compliance with approved specifications.
5. Promoter’s Non-Compliance: Any failure by the developer or real estate agent to comply with RERA provisions.
6. Title Disputes: Issues concerning land ownership or clearances related to the project.

RERA provides orders to complete the project, compensate for delays, or rectify defects. It also has penal provisions that include fines and imprisonment in certain cases, making it a strong enforcement mechanism.

When to Approach Consumer Forums?

Consumer Forums under the Consumer Protection Act are a broader platform for redressal that include real estate as part of their ambit. Buyers should consider Consumer Forums when:

1. Seeking Monetary Compensation: For financial losses or damages arising from the developer’s breach.
2. Unfair Trade Practices: Cases involving false advertising, misleading brochures, or unethical sales tactics.
3. Service Deficiencies: Issues like poor after-sales services including plumbing, electrical fittings, or other maintenance problems.
4. Refund Claims: When the builder refuses to refund amounts paid by buyers.
5. Class-Action or Collective Complaints: Where multiple buyers suffer similar grievances.
6. High-Value Claims: For claims exceeding ₹10 crore, the National Consumer Commission is empowered to entertain complaints.

Consumer Forums can award compensation or order refund/replacement but do not have the power to order project completion or penalise with imprisonment.

Advantages of RERA

• Specialised Tribunal: RERA authorities and tribunals understand the technicalities of real estate better.
• Faster Disposal: Statutory timelines ensure quicker resolution.
• Strong Enforcement: Penalties include imprisonment and fines.
• Focused Remedies: Completion orders and rectification are possible.
• Online Process: Filing and tracking is done online.

Advantages of Consumer Forums

• Wider Scope: Handles diverse complaints beyond real estate.
• Monetary Compensation: Broad powers to award damages.
• Suo-moto Action: CCPA can investigate and act on its own.
• Class-Action Suits: Possible under Consumer Protection Act.
• No Project Registration Needed: Can handle complaints even if the project is unregistered under RERA.

Disadvantages or Limitations

How to Decide Which Forum to Approach?

While both forums are available, the choice depends on:

• Nature of Dispute: Contractual and regulatory breaches → RERA; Consumer deficiency and unfair trade practices → Consumer Forum.
• Relief Desired: Completion, possession orders, rectification → RERA; Compensation, refund → Consumer Forum.
• Project Registration Status: If unregistered → Consumer Forum or criminal complaint; If registered → RERA.
• Claim Amount: For very high-value claims, Consumer Forum at the National level may be more appropriate.
• Speed & Convenience: RERA usually offers faster adjudication with online portals.

Conclusion

Both RERA and the Consumer Protection Act provide effective mechanisms to protect homebuyers. RERA, being a specialised law for real estate, offers focused and time-bound remedies primarily related to contractual obligations and project execution. The Consumer Protection Act, meanwhile, grants a wider umbrella for addressing consumer rights violations, monetary compensation, and unfair trade practices.