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The Orissa High Court has issued notices to the Odisha Real Estate Regulatory Authority (ORERA) following a petition filed by Confederation of Real Estate Developers Associations of India - Odisha (CREDAI Orissa Pvt. Ltd) and builder Anil Kumar Agarwal, challenging the ten-fold hike in registration fees for real estate projects.
The petition claims that the increase in fees from Rs 10 per square metre to Rs 100/sqm is "exorbitant, unreasonable, and arbitrary," and will negatively impact both promoters and homebuyers. Senior advocate Pitambar Acharya, representing the petitioners, argued that the hike will deter prospective investors in the real estate sector, and result in higher prices of real estate across the state.
Moreover, the petition claims that ORERA lacks the jurisdiction and authority to issue any such regulations, and other states like Rajasthan, Uttar Pradesh, Maharashtra, Delhi, Karnataka, Telangana, and Chhattisgarh have lower fees (Rs 10/sqm) for the registration of real estate projects despite having more prominent and booming real estate sectors than Odisha.
The two-judge bench of Chief Justice S Muralidhar and Justice Gourishankar Satapathy has sought responses to the petition from the housing and urban development department and revenue department and has posted the matter for further consideration on July 20, along with replies from ORERA. The bench has declined to grant any interim relief to petitioner 1 (CREDAI Orissa Pvt. Ltd), but in the case of petitioner 2 (Agarwal), the bench has said that if Agarwal pays any fees for registration of any project, it will be kept in a separate interest-bearing account by ORERA and will be subject to the outcome of the writ petition.
The ten-fold hike in registration fees has caused concern in the real estate sector, as it is expected to significantly impact the costs of real estate projects and discourage investment in the sector. The real estate sector has been a key driver of economic growth in India, and any adverse impact on the sector is likely to have a cascading effect on the broader economy.
The real estate sector in India has witnessed significant growth in recent years, driven by factors such as rising incomes, urbanization, and increasing demand for housing. However, the sector has also been plagued by challenges such as delays in project completion, lack of transparency, and regulatory issues. The government has introduced various reforms to address these challenges and promote the growth of the sector.
The Real Estate (Regulation and Development) Act, 2016 (RERA) is one such reform that seeks to promote transparency and accountability in the sector. RERA mandates the registration of all real estate projects with the regulatory authority and provides for penalties for non-compliance with the provisions of the Act. The Act also requires developers to deposit 70% of the project funds in a separate account to ensure that the funds are utilized only for the development of the project.
In conclusion, the ten-fold hike in registration fees for real estate projects has come under judicial scrutiny, with the Orissa high court issuing notices to ORERA following a petition challenging the increase as "exorbitant, unreasonable, and arbitrary." The court has sought responses from the government departments and ORERA and has posted the matter for further consideration on July 20. The increase in fees is expected to impact the costs of real estate projects and discourage investment in the sector, which is a key driver of economic growth in India.
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