The Real Estate Regulatory Authority — Constitution, Powers and Functions — Land Law Notes

The Real Estate Regulatory Authority — Constitution, Powers and Functions

Every well-run sector has a watchdog — SEBI for the stock market, IRDAI for insurance, TRAI for telecom. Real estate, despite being one of India’s biggest sectors, had none, which is exactly why builders could behave as they pleased. RERA’s structural answer is to create a Real Estate Regulatory Authority in every State and Union Territory. In Karnataka it is K-RERA. It is the engine of the whole Act: it registers projects and agents, publishes their records, hears complaints, and enforces its orders with the powers of a civil court. Structure your essay as constitution → functions → powers, and you have a complete answer.

What the Authority is

Here is the everyday picture: the Authority is the referee and enforcer of the real-estate market. The appropriate Government (the State) establishes it under section 20 as a body corporate — it can hold property, contract, and sue or be sued. Two or more States may share one Authority, and a State may set up more than one. Until it is formally constituted, the State designates an existing officer (usually the Housing Secretary) to act as the interim Authority.

Section 20(1), RERA, 2016: “The appropriate Government shall, within a period of one year from the date of coming into force of this Act, by notification, establish an Authority to be known as the Real Estate Regulatory Authority to exercise the powers conferred on it and to perform the functions assigned to it under this Act …”

In Simple Terms: Each State must set up its own real-estate regulator within a year of the Act starting. That regulator is a legal “person” in its own right, with the standing to own property, make contracts, and go to court — the institutional muscle the sector never had.

A. Constitution and composition (ss. 21–26)

  1. Composition (s. 21). The Authority consists of a Chairperson and not less than two whole-time Members, appointed by the appropriate Government.
  2. Qualifications (s. 22). They are appointed on the recommendation of a Selection Committee — the Chief Justice of the High Court (or his nominee), the Housing Secretary and the Law Secretary — from persons with adequate knowledge and professional experience of at least 20 years (Chairperson) / 15 years (Members) in urban development, housing, real estate, infrastructure, economics, planning, law, commerce, accountancy, industry, management, social service, public affairs or administration.
  3. Term (s. 23). Office for five years or until age 65, whichever is earlier, and not eligible for re-appointment.
  4. Administrative powers of the Chairperson (s. 25) — general superintendence and direction over the Authority’s affairs.
  5. Removal (s. 26). The Government may remove a Chairperson/Member who is insolvent, convicted of an offence involving moral turpitude, incapacitated, has acquired a conflicting interest, or has abused his position — the last two grounds only after an inquiry by a High Court Judge.

B. Functions of the Authority (ss. 31–34)

  1. Receive and decide complaints (s. 31). Any aggrieved person (including an association of allottees or a registered consumer association) may file a complaint against a promoter, allottee or agent for any contravention of the Act.
  2. Register and regulate (s. 34). Register and regulate real estate projects and agents — the Authority’s primary job.
  3. Maintain a public website (s. 34). Publish records of all registered projects for public viewing, and maintain databases of defaulting promoters (with photographs and reasons) and of registered agents.
  4. Fix fees and ensure compliance (s. 34). Fix standard fees by regulation, and ensure promoters, allottees and agents comply with their obligations and with the Authority’s orders.
  5. Promote the sector (s. 32). Make recommendations to the Government — single-window clearances, a robust grievance mechanism, digitisation of land records, amicable dispute settlement, and affordable, sustainable housing.
  6. Advise on policy (s. 33). Give the Government its opinion (non-binding) on proposed real-estate policy or laws within 60 days of a reference.

C. Powers of the Authority (ss. 35–40)

  1. Powers of a civil court (s. 35). For calling for information and conducting investigations, the Authority has the same powers as a civil court under the Code of Civil Procedure, 1908 — discovery and production of documents, summoning and examining persons on oath, and issuing commissions.
  2. Interim orders (s. 36). During an inquiry it may restrain a promoter, allottee or agent from continuing a contravention.
  3. Issue directions (s. 37). Issue binding directions to promoters, allottees or agents.
  4. Impose penalty/interest and refer to the CCI (s. 38). Impose penalty or interest for contraventions; it is guided by natural justice and regulates its own procedure; and it may refer a monopoly/abuse-of-market issue to the Competition Commission of India.
  5. Rectify its orders (s. 39). Correct a mistake apparent from the record within two years.
  6. Recover dues and enforce orders (s. 40). Unpaid penalty, interest or compensation is recoverable as an arrear of land revenue, and the Authority’s orders are enforceable in the prescribed manner.

🔑 The Authority must dispose of a complaint as expeditiously as possible, endeavouring to do so within sixty days — the speed that is the whole point of a specialised regulator.

🧩 WORKED EXAMPLE — a complaint before the Authority

Facts. A registered project’s promoter has stopped construction and is not answering buyers. A hundred allottees form an association and want the project’s bank account frozen and information about where their money went.

Rule. Under s. 31 an association of allottees may complain; under s. 35 the Authority has civil-court powers to summon the promoter and call for the accounts; under s. 36 it may pass interim orders; under ss. 7–8 it may revoke registration and freeze the project account; and under s. 40 its dues are recoverable as arrears of land revenue.

Apply. The association files one complaint (not a hundred suits). The Authority summons the promoter and his account statements (s. 35), can pass an interim restraint (s. 36), and, on default, freeze the account and let the association complete the works (ss. 7–8) — enforcing any monetary order as a land-revenue arrear (s. 40).

Conclusion. The Authority combines a registrar, an investigator and a court in one body — which is why an essay must give constitution, functions and powers together, not just one.

flowchart TD
    ROOT["Real Estate Regulatory Authority<br/>(ss. 20-40) — K-RERA in Karnataka"]:::root
    ROOT --> C["CONSTITUTION (ss.20-26)<br/>body corporate; Chairperson +<br/>>= 2 whole-time Members;<br/>Selection Committee (CJ HC, Housing Secy,<br/>Law Secy); 5 yrs / age 65"]:::leaf
    ROOT --> F["FUNCTIONS (ss.31-34)<br/>hear complaints · register & regulate<br/>projects/agents · public website +<br/>defaulter database · promote sector"]:::leaf
    ROOT --> P["POWERS (ss.35-40)<br/>civil-court powers (CPC) ·<br/>interim orders · binding directions ·<br/>penalty/interest · refer to CCI ·<br/>recover as land-revenue arrear"]:::leaf
    ROOT --> T["Dispose complaints in ~60 days"]:::leaf
    classDef root fill:#FFF8DC,stroke:#000,stroke-width:1px,color:#000;
    classDef leaf fill:#E6F3FF,stroke:#1E3A8A,color:#000;
    linkStyle default stroke:#888,stroke-width:1px;

Case Laws

  • M/s Newtech Promoters and Developers Pvt. Ltd. vs State of Uttar Pradesh (2021) — explained the division of labour: the Authority (or its officer) decides registration, refund and interest under ss. 12, 14, 18 and 19, while the adjudicating officer decides claims for compensation; both function within the RERA scheme.
  • Neelkamal Realtors and Developers Pvt. Ltd. vs Union of India (2017) — upheld the establishment of the Authority and its wide powers as a valid, reasonable regulatory framework for the sector.
  • Bikram Chatterji vs Union of India (2019) (Amrapali) — illustrates the reach of regulatory/court intervention to protect allottees where a promoter defaults en masse and diverts funds.

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