In yet another ruling upholding the rights of homebuyers, the Supreme Court directed real estate company Supertech to refund money to those who wanted to opt out of one of its projects in Noida, Uttar Pradesh. Using strong language, the apex court told the builder that it wasn’t concerned if the latter were to “sink or die” and that it must pay back the homebuyers. This comes after the builder indicated that it wasn’t in a position to make the refunds. But the top court affirmed that the company could not use the excuse of being in bad financial condition to deny the rights of homebuyers.
Supertech is the third real estate company in recent weeks to come under judicial scrutiny for not refunding money to homebuyers. The cases highlight the opaque manner in which the real estate sector has been operating. Money raised by builders for a project is often diverted to other projects. Other questionable practices include selling flats on the basis of ‘super area’ – which substantially exceeds the usable area available to homebuyers. Plus, several builders have sold apartments without the necessary clearances and have violated regulatory norms during construction.
Sometimes the real estate sector has looked like one giant casino, attracting fly-by-night operators and unscrupulous middlemen, punishing genuine homebuyers investing their life’s savings with inordinate delays in project completion and delivery. It was with this in mind that Parliament passed the Real Estate (Regulation & Development) Bill, 2016 in March this year, seeking to protect homebuyers and create a transparent regulatory framework for the sector. Accordingly, all states are to set up real estate regulatory authorities and appellate tribunals. Further, builders are to deposit 70% of the money collected from buyers into a separate account that will be utilised only for construction and payment for land.
The new legislation seeks to boost investor confidence by forcing builders to make their activities open and public. This in turn will provide a fillip to the overall real estate sector, creating jobs and revenues. For far too long builders have taken homebuyers for a ride. They should now view the new real estate legislation as an opportunity to clean up their books, rejig their internal workings to match regulatory requirements, focus on quality and service, and put the customer first.
[Source:-Times Of India]
