In the world of real estate, transparency and fairness are paramount, especially when it comes to resolving disputes between homebuyers and developers. Recently, the Forum for People's Collective Efforts (FPCE), a prominent nationwide homebuyers' body, has raised objections to the Maharashtra Real Estate Regulatory Authority (MahaRERA) over its decision to establish a conciliation forum. This forum, designed to amicably settle disputes between property buyers and builders, has come under scrutiny, with FPCE highlighting potential conflicts of interest and legal overreach.
The Core of the Objection: Legal Overreach and Conflict of Interest:
The FPCE’s main contention is that MahaRERA has overstepped its mandate by constituting the conciliation forum. According to the Real Estate (Regulation and Development) Act, 2016 (RERA), the authority is empowered to recommend such forums but not to establish or participate in them directly. The FPCE points out that Section 32(g) of RERA clearly states that dispute settlement forums should be set up by consumer or promoter associations, not by the RERA authorities themselves.
Adding fuel to the fire, the Secretary of MahaRERA is the Chairperson of this forum, further entrenching the conflict of interest. The FPCE argues that this arrangement undermines the impartiality of the forum and creates a situation where the scales could easily tip in favor of developers. This concern is amplified by the fact that the forum’s composition is skewed, with three organizations representing builders against only one representing consumers.
The FPCE’s Appeal: Ensuring Independence and Impartiality:
In a letter addressed to Satinder Pal Singh, the Additional Secretary of the Union Ministry of Housing and Urban Affairs, FPCE President Abhay Upadhyay called for immediate intervention. The FPCE has urged the ministry to issue clear guidelines ensuring that any conciliation forum constituted is independent, impartial, and uniform across the board. The letter emphasizes the need for these forums to be free from the influence of RERA authorities to avoid any potential bias.
The FPCE also suggested that the ministry should investigate the constitution, functioning, and orders passed by the MahaRERA Conciliation Forum to determine if its actions have favored real estate developers at the expense of homebuyers. They have called for a temporary suspension of the forum's activities until comprehensive guidelines are established.
Alternative Dispute Resolution: The Role of Lok Adalats:
In its letter, the FPCE also recommended that Lok Adalats—traditional Indian forums for dispute resolution—should be encouraged over conciliation forums where functional. Lok Adalats have a proven track record of delivering legally binding and credible decisions, making them a preferable alternative to the conciliation forum set up by MahaRERA. The FPCE argues that the legal validity and impartiality of Lok Adalats could offer a more balanced and fair platform for resolving disputes between homebuyers and developers.
Conclusion: A Call for Transparency in Real Estate Dispute Resolution:
The debate over MahaRERA’s conciliation forum highlights a critical issue in India’s real estate sector: the need for transparent and impartial mechanisms to resolve disputes between buyers and builders. The FPCE's objections underscore the importance of ensuring that regulatory authorities do not overstep their boundaries and that any dispute resolution forum remains independent, fair, and free from conflicts of interest.
As the central government considers the FPCE’s appeal, the future of real estate dispute resolution in Maharashtra—and potentially across India—hangs in the balance. Will the ministry step in to ensure that homebuyers' rights are protected, or will the current setup prevail? The real estate community awaits a decisive response.
Comments