Supreme Court's Ruling on Real Estate Sector Reforms
The Supreme Court's recent decision is expected to usher in significant reforms in the real estate sector, describing housing as a fundamental right and addressing speculative buying, which it termed as a "slow poison". The ruling marks housing as a fundamental right under Article 21 of the Constitution. It aims to instill confidence among genuine buyers and reform various aspects of the real estate industry.
Key Directives and Reforms
- Housing as a Fundamental Right: The court emphasized that housing is a fundamental human need, not a luxury or speculative instrument.
- Reforming Insolvency Proceedings: Authorities are instructed to frame specific guidelines for insolvency proceedings in real estate, including timeline implementations for project-wise Corporate Insolvency Resolution Process (CIRP) and safeguards for allottees.
- Filling Vacancies: Urgent directives were given to fill vacancies in National Company Law Tribunal (NCLT), National Company Law Appellate Tribunal (NCLAT) and state Real Estate Regulatory Authority (RERA) bodies to reduce delays and systemic bottlenecks.
Issues with industry
- Needs clarity by separating speculative investors from genuine homebuyers.
- Importance of addressing regulatory gaps and stalled projects amidst a robust demand for housing.
- Need for stakeholder collaboration in policy reforms to balance consumer protection and business ease.
Proposals for Systemic Improvements
- A committee chaired by a retired High Court judge will propose viable reforms to cleanse and infuse credibility into the real estate sector, involving domain experts and industry representatives.
- The ruling safeguards the integrity of the Insolvency and Bankruptcy Code (IBC) while reaffirming housing as a constitutional right.
Implications and Future Directions
- Protection of homebuyers’ interests and ensuring timely project completion will restore confidence in housing as a fundamental right.
- Technological practices like digital escrow tracking and online project monitoring are expected to implement the court’s vision and boost global investor confidence.
- Consideration for revival funds and systemic reforms aims to address stalled projects, improve accountability, and accelerate affordable housing delivery.