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The Forum for People’s Collective Efforts (FPCE), a prominent homebuyers’ association, has called for urgent amendments to the Real Estate (Regulation and Development) Act, 2016 (RERA) to strengthen protections for property buyers. FPCE’s demands focus on introducing mechanisms to verify the track record of builders, ensure compensation for incomplete amenities, and establish uniform refund rules for cancelled units.
In a letter addressed to Union Minister of Housing and Urban Affairs Manohar Lal, FPCE President Abhay Upadhyay, who is also a member of the Central Advisory Council for RERA, highlighted critical gaps in the current legislation that have resulted in widespread injustice for homebuyers across India.
Key Recommendations by FPCE
The association has suggested adding a separate section in RERA to specifically address builders’ failure to deliver promised facilities and amenities. It has also called for the ministry to issue a Standard Operating Procedure (SOP) directing all RERA authorities to require developers to deposit sufficient funds in escrow accounts to complete pending facilities. Regulators would then monitor and enforce the timely completion of these amenities, ensuring buyers receive what they were promised.
A major concern raised by FPCE is the absence of a mechanism to verify a builder’s track record before project registration. Currently, RERA authorities do not check if developers have cleared all dues to allottees of previous projects or settled charges imposed by courts, quasi-judicial bodies, or government authorities. This loophole allows errant developers to continue launching new projects, often repeating past injustices.
Upadhyay proposed that before registering any new project, promoters should submit a declaration confirming that all dues to allottees, as well as penalties or charges imposed by any forum or authority across India, have been cleared. This requirement should cover not only the promoter company but also related group companies with the same brand name or common promoters/shareholders. The FPCE further recommended that false declarations should carry strict legal consequences, including a permanent ban from engaging in real estate across India.
Regulatory Inaction and Need for Intervention
FPCE stressed that gaps in enforcement are compounded by the inaction of several state RERA authorities. Despite having the power to investigate, penalize, and pass binding orders, many regulators remain passive spectators. Upadhyay warned that this lack of action raises questions about regulatory intent and, in some cases, suggests a possible nexus protecting errant developers.
He emphasized that RERA registration numbers have failed to instill confidence among homebuyers, unlike the FSSAI mark for food safety, which consumers trust implicitly. “Builders are brazenly exploiting homebuyers — delaying projects, misappropriating funds, and violating agreements — right under the nose of RERA authorities,” Upadhyay said.
Urgent Call for Policy Action
FPCE’s letter calls on the Union ministry to step in and implement either amendments to the RERA Act or immediate SOPs to all state authorities. These measures are aimed at closing regulatory gaps, ensuring timely project delivery, safeguarding buyers’ investments, and making RERA registration a true symbol of trust.
