BHUBANESWAR: The Supreme Court has issued important directives to enhance the functionality of real estate regulatory authorities throughout India, including the Odisha Real Estate Regulatory Authority (ORERA).
The ruling in the case of Mansi Brar Fernandes vs Shubha Sharma and others, delivered on September 12, requires states and Union Territories to implement thorough measures to empower RERA bodies to effectively manage the sector.
The SC’s directive underscores the necessity for adequate staffing and infrastructure within RERA authorities. Every RERA must include at least one member who possesses legal expertise or experience as a consumer advocate in real estate. This aims to prevent RERA bodies from becoming ineffective and promotes the timely enforcement of orders.
Key instructions include the necessity for RERA authorities to perform comprehensive due diligence before project approvals. The court cautioned that any failure in this process, leading to injustices, would be deemed “an unpardonable error in law” and may invite stringent judicial action.
Moreover, the SC directed RERA bodies to develop standard operating procedures (SOPs) for escrow accounts within six months. These SOPs are vital for early-stage projects, ensuring that allottee funds are managed transparently and released in accordance with project milestones.
The judgment also requires the registration of residential transactions with local revenue authorities upon a buyer’s payment of at least 20% of the property’s price. This aims to boost transparency and protect vulnerable groups, including senior citizens.
Additionally, contracts deviating significantly from the standard RERA agreement—especially those featuring buyback clauses—must be supported by an affidavit. This affidavit, sworn in front of a competent revenue authority, is intended to protect genuine homebuyers and seniors by ensuring they are aware of the associated risks.
The apex court reaffirmed RERA’s position as the main forum for addressing homebuyer grievances, distinctly separate from the Insolvency and Bankruptcy Code (IBC) and consumer forums, to avoid procedural overlap and jurisdictional confusion.
To establish consistency in RERA regulations nationwide, the court urged the Union government to carry out a consultative process to address ambiguities and legislative gaps.
The state government has begun initiatives to strengthen ORERA, collaborating with relevant departments to implement the SC’s directives.
Real estate expert Bimalendu Pradhan highlighted the importance of RERA functioning as a regulatory authority rather than merely a grievance resolution system. “RERA should be fortified to bring necessary regulation to the real estate sector, particularly in cities like Bhubaneswar and Puri,” he stated.
