The Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted in India to regulate the real estate sector and protect the interests of homebuyers.
The Real Estate Regulatory Authority Act, 2016 (hereinafter referred to as RERA Act) intends to provide efficiency and transparency to the real estate market, with one of the key priorities being to defend the interests of purchasers in the real estate sector.
Section 2(b) of the Real estate (regulation and development) act, 2016 (herein after referred to as ‘the act’) defined the meaning of the term ‘advertisement’ as ‘any document described or issued as advertisement through any medium and includes any notice, circular or other documents or publicity in any form, informing persons about a real estate project, or offering for sale of a plot, building or apartment or inviting persons to purchase in any manner such plot, building or apartment or to make advances or deposits for such purposes’.
The real estate sector was unregulated for a long time. If customers experienced delays, they had little redress. Because court disputes may take a long time, most customers were at the discretion of the builders. A proper complaint process has emerged as a result of the implementation of RERA.
Enacting of the RERA Act, 2016 made registration and duties of promoters and real-estate agents compulsory. The reason why the process of registration and duties of the mediator are specified is accountability and regulating promoters and real estate agents through a supervisory body.
Prior to the RERA Act coming into force, the real estate sector in India was mostly unregulated, with no standardization of business operations or transactions. Due to a lack of a legal framework, home buyers/allottees were often confronted with issues such as project delays, price increases, and poor building quality.
The major challenges in the insolvency resolution of real estate companies arise from the peculiarities of this sector, especially since the divergent interests of the allottees of the real estate projects do not align with the scheme of the CIRP.
The parliament in order to regulate this one of the fastest-growing sectors passed “The Real Estate (Regulation and Development) Act, 20164 which came into effect on 1st May 2016.
RERA was implemented to acknowledge and solve discrepancies and issues of home buyers. By establishing rules for the sale of real estate and requiring developers to adhere to certain criteria, it protects the interests of homebuyers.
Section 8 of the RERA is an essential clause that guarantees the protection of homebuyers’ interests in the event that the registration of a real estate project is canceled or expires.
RERA was established to do away with project delays, malpractice, and irregularities in norms and increase transparency and accountability from builders and homebuyers both.
A debt arising from an advance payment given to a corporate debtor for the supply of goods or services would be deemed an operational debt.
Proposed Amendments in a circular issued on 18.01.2023, the Ministry of Corporate Affairs has proposed numerous changes in IBC.
Homebuyers could only engage in the IBC procedure as a class of financial creditor. Individual homebuyer rights were absorbed by homebuyer rights as a class.
Despite the fact that such relief should not have existed, the NCLAT instead attempted an “experiment” to adopt the strange idea of Reverse CIRP, which has no precedent in the Code.
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