Does RERA Apply to Redevelopment?
Redevelopment of old housing societies is booming, but delays can leave residents stranded in temporary accommodations for years. A common question is whether the Real Estate (Regulation and Development) Act, 2016 (RERA) protects them.
The answer is nuanced. Generally, redevelopment projects that involve constructing new flats for sale to third-party buyers must be registered under RERA (unless exempt by size thresholds like being under 500 square meters). However, the way RERA protects original society members versus new buyers differs significantly.
New Buyers vs. Original Society Members
Rights of New Buyers (Sale Component)
For outside buyers purchasing the newly built flats (the sale component), RERA fully applies. These buyers enjoy all standard RERA protections, including the 70% escrow account mandate, strict possession timelines, and the right to claim delay interest or refunds.
Rights of Original Society Members
State tribunals, such as MahaRERA, have often ruled that original residents surrendering their old flats for new ones are technically "co-promoters" or fall outside strict RERA jurisdiction for certain claims. Consequently, original residents might miss out on direct RERA remedies for fixed possession dates or statutory delay penalties.
Instead, the rights of the original members are heavily governed by the Redevelopment Agreement (Development Agreement or DA) signed between the housing society and the builder.
Legal Remedies for Delayed Redevelopment
If a redevelopment project is stalled, society members cannot rely solely on standard RERA clauses. They must utilize a multi-pronged legal approach:
- Enforce the Redevelopment Agreement: The DA must clearly outline the construction timeline, the scope of work, and the penalty for delays (like increased rent compensation). If the builder breaches this contract, the society can take legal action.
- Cooperative Society Registrar: In many states, societies can approach the Registrar of Cooperative Societies to resolve disputes or seek permission to terminate the builder's contract due to non-performance.
- Consumer Courts and Civil Litigation: Original members can approach Consumer Courts claiming "deficiency of service" or file civil suits to claim damages and seek eviction of the defaulting developer from the site.
The 5-Year Defect Liability
One area where RERA offers universal protection is construction quality. RERA provides a five-year defect liability period after possession. If any structural defect or quality issue is discovered within five years of taking possession, the builder is legally obligated to fix it at their own cost within 30 days.