DC Edit | SC Ruling To Cheer Homebuyers

The Supreme Court’s judgement on stressed housing projects is trend-setting in more than one way and will protect interests of home buyers.

The most important pronouncement of the court through its judgement is its declaration that the right to housing is not merely a contractual entitlement but a facet of the fundamental right to life under Article 21. This elevation will have a far-reaching impact in the country and will force the central government to take an active role in ensuring that every family is provided with a house.

By asking the Centre to consider establishing a revival fund to provide bridge financing for stressed projects, the court has prodded officials to provide logical conclusion to these projects and safeguard homebuyers’ interests.

Though the Real Estate Regulatory Authority (RERA) was established to protect the interests of homebuyers, it doesn’t have enough power to act against violations and the court’s direction to strengthen the regulator.

While the apex court’s directions are helpful, the real estate market will not be cleansed of fraudsters until the government prevents the sector from being used as a parking place for black money and speculative investment.

Speculative investment is steroid for real estate, which in turn attracts black money. The presence of stash incentivises the builder and buyer to opt for opaque dealings, which denies transparency and defeats the purpose of regulation.

If the right of housing is a facet of fundamental rights, every family would be entitled to a house. However, this purpose will not be achieved until speculative investment is curbed. Instead of pursuing profit maximisation through land auction as a private enterprise, the government should use its vast land bank to develop and build affordable housing for common people. When the government steps in, the cost of housing will become affordable and disincentivises fraudsters.