Center likely to strengthen recovery mechanism to rein in errant builders, Real Estate News, ET Real Estate

New Delhi: Amid rising cases of builders not complying with refund and compensation orders passed by state real estate regulators (RERA) to pay affected homebuyers, the government is set to strengthen the recovery mechanism.

The regulators have the power to order refunds and compensation for delay in project completion under the Real Estate Act.

The issue of non-compliance by builders came up for discussion in a recently held meeting of a sub-committee headed by the Union Housing Secretary. Manoj Joshi, The subcommittee has been constituted under central advisory councilWhich is headed by the Union Minister. Hardeep Singh PuriTo address issues related to the implementation of the real estate law, RERA.

“The issue of non-recovery of dues from developers/builders was discussed in detail. Secretary MoHUA was of the opinion that there is a need to strengthen the recovery mechanism under RERA to ensure that refunds/compensation ordered by regulatory authorities are actually paid by developers/builders to homebuyers,” the minutes of the meeting said. Issued by the Ministry of Housing.

The ministry had written to the chairpersons of six regulators to look into the issue of non-compliance of orders and suggest a way forward. In response, the regulator Tamil Nadu, Gujarat And Maharashtra have replied and their suggestions are being examined.

The minutes also mentioned that the Secretary, Uttar Pradesh Regulatory Authority expressed his concern over non-compliance of orders passed by RERA. “He suggested that some recovery mechanism may be incorporated in RERA,” it said.

Representing the homebuyers, Abhay Upadhyay of FPCE suggested that there should be a recovery officer in each regulatory authority.

According to the ministry, Joshi has suggested studying the data of a RERA in which recovery has not been made despite orders being passed by the regulator. The ministry is also setting up a committee to examine all issues related to old stalled projects and suggest ways to complete them in a time-bound manner.