Discover the distinctions between RERA and HIRA in Indian real estate. Learn how these regulations protect homebuyers and impact the property market.
When it trying to buy a home or invest in real estate in West Bengal, you’ve likely encountered terms like RERA and HIRA. These acronyms represent two critical regulations that aim to protect homebuyers and regulate the real estate market.
In this comprehensive guide, we’ll break down the differences between the Real Estate Regulation and Development Act and HIRA, also known as the West Bengal Housing Industry Regulation Act.
What is RERA?
RERA, short for the Real Estate (Regulation and Development) Act, was enacted by the Indian Parliament in 2016. It is a landmark legislation that aims to bring transparency and accountability to the real estate sector in India. RERA applies to the entire country, except for the state of Jammu and Kashmir
What is HIRA?
HIRA, which stands for the West Bengal Housing Industry Regulation Act, was a state-specific real estate regulation that applied to West Bengal. It was introduced to regulate the real estate sector in the state and protect the interests of homebuyers.
Distinction Between RERA and HIRA
| Parameter | RERA | HIRA |
| Force majeure events | RERA limits force majeure events to natural disasters | HIRA leaves the definition of natural disasters open-ended with the insertion of the terms- “any other situations as may be prescribed” |
| Planning area | Requires for the planning area to been designated by the government | N/A |
| Power of the regulatory authority | RERA permits regulatory authorities to refer matters to the Competition Commission of India | N/A |
| Factors for adjudging compensation or interest | The regulating body appoints an adjudicator to determine the payment or interest on real estate. | The regulating authority makes decisions about compensation under the HIRA. The position of an adjudicating officer does not exist. |
| Garage area |
As per RERA, a garage is defined as a three-sided covered area with a roof. The definition excludes uncovered parking spaces or open parking lots. |
No limitation is imposed on the definition of parking or garage spaces. |
Conflict Between RERA and HIRA: RERA Emerges as the Clear Winner
In the case of Writ Petition (C) No. 116 of 2019, Forum for People’s Collective Efforts (FPCE) & Anr. vs. State of West Bengal & Anr., the Supreme Court, consisting of Justices D. Y. Chandrachud and M. R. Shah, issued a 190-page judgment that declared the West Bengal State law WB-HIRA (West Bengal Housing Industry Regulatory Act), enacted in 2017 to protect home buyers, unconstitutional.
The key points and background of this judgment are as follows:
RERA and State Laws:
Before the enactment of the Real Estate (Regulation and Development) Act (RERA) by the Parliament in 2016, various state legislatures had already passed laws to regulate the relationship between real estate promoters and buyers. One such law in West Bengal was the West Bengal (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993 (the “WB 1993 Act”).
Introduction of WB-HIRA:
Following the introduction of the RERA Bill in West Bengal in 2016 and the framing of draft rules, no significant progress was made.
However, on August 16, 2017, the State Legislative Assembly passed the WB-HIRA Bill. WB-HIRA established the Housing Industry Regulatory Authority to regulate and promote the housing sector, ensure transparent sales of real estate projects, protect consumer interests, and establish a mechanism for dispute resolution. It came into effect on June 1, 2018, repealing the WB 1993 Act.
Supreme Court’s Decision:
The Supreme Court, in its judgment, declared WB-HIRA unconstitutional. The Court held that since the Parliament had already passed the RERA legislation, states could not enact similar statutes. The Court found that WB-HIRA was essentially a replica of RERA, with only a few inconsistent provisions.
Inconsistencies Between RERA and HIRA
The judgment highlighted some of the key inconsistencies between WB-HIRA and RERA Filing, such as differences in the definition of force majeure events, the lack of a clear definition of “planning area” in WB-HIRA, variations in the definition of a garage, and the absence of provisions for compounding of offences in WB-HIRA.
Impact on Past Registrations:
The judgment clarified that the repeal of WB-HIRA would not revive the provisions of the WB 1993 Act. The WB 1993 Act was impliedly repealed when RERA was enacted in 2016. Therefore, the Court’s decision did not affect past registrations, sanctions, and permissions granted under the repealed legislation.
The Road Ahead
Following the repeal of WB-HIRA, the West Bengal government framed new rules and established a Real Estate Regulatory Authority and an Appellate Tribunal. However, as of the notice dated July 7, 2022, the positions of Chairperson and Members for these authorities remained vacant. This lack of implementation of RERA has left homebuyers without a mechanism for addressing their grievances against builders.
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