Rebuilding trust

Maharashtra Real Estate Regulatory Authority chief Gautam Chatterjee talks to Gautam Kagalawala about the role of the regulator, challenges, friction with IBC and other regulations and stress in the state’s realty sector

The government introduced the Real Estate (Regulation and Development) Act, 2016, as a measure to deal with problems in the real estate sector, such as declining trust among homebuyers, unsold inventory and projects that were stuck. The act was passed by parliament in 2016 and a sector regulator, the Real Estate Regulatory Authority (RERA), was established a year later.

The act introduced a uniformly regulated environment through the registration of real estate projects and quick dispute redressal. The state of Maharashtra has been a frontrunner in this regard, with more than 21,000 project registrations, followed by Gujarat and Uttar Pradesh, with 5,785 and 2,675 registered projects respectively.

However, the rollout of the act has been uneven with low project registration numbers in some states, and others, such as Arunachal Pradesh, Meghalaya and Sikkim, still in the process of notifying the rules under the act.

Gautam Chatterjee, a former bureaucrat, heads RERA in Maharashtra (MahaRERA). Prior to his appointment, Chatterjee was an officer on special duty to the chief minister of Maharashtra. In his career spanning more than 33 years, he has held important positions such as joint director general of foreign trade at the Ministry of Commerce and Industry, joint secretary at the Ministry of Defence and the CEO of the Maharashtra Housing and Area Development Authority.

With RERA recently completing two years, Chatterjee spoke to India Business Law Journal‘s Gautam Kagalwala about the successes and challenges in the implementation of the act, its friction with other laws and what he thinks of homebuyers choosing the National Company Law Tribunal (NCLT) over RERA.

Q: With RERA completing two years, has the regulation achieved many of its objectives in Maharashtra?

RERA is landmark legislation. It’s a central legislation that sets out to remedy the malaise of the sector, which was unregulated. Any new and landmark legislation sets out objectives that fructify over time. The objectives of the act flow from what has been the malaise of the sector. If I put it in a few categories, the most important is the information asymmetry in the sector, the unending wait for the completion of projects in which the homebuyers have put their life savings into and the huge trust deficit between homebuyers and developers.

If you ask about the rollout of the central act in Maharashtra, you can say that the state has been on track over the last three years (since the act was passed in the parliament) and we are trying to implement the act in its letter and spirit.