RERA is the single biggest reform that will infuse the much needed trust in the real estate sector and bolster the longer term potential on real estate investments.
With the Real Estate (Regulation and Development) Act coming into force across the country from May 1, delays in project deliveries will come down sharply as developers rush to complete previously launched projects.In addition, with the act setting in motion the creation of a Real Estate Regulatory Authority (RERA) in each state by July 31, homebuyers and investors will now have greater confidence in making investments in property, which will improve the overall housing demand in the Delhi NCR markets, especially in the Noida and Gurgaon regions.
Though the act has come into effect from May 1, most states have not been able to implement it immediately and are even now notifying the rules and identifying an authority to act as a regulator in the interim. Realty projects that have not received completion certificates must apply for registration under RERA by July 31.
The act will bring nearly 83,000 registered builders in India under its purview and ensure that the interests of homebuyers are protected.
Developers and promoters say that better regulation and accountability will spur investments from foreign and domestic financial institutions. RERA’s focus on mandating disclosure of projects, including details of the promoter, project, land status, clearances, approvals, etc, and the timely delivery of projects will help increase the credibility of developers as well.
Both homebuyers and developers will be penalized for delays in payment and completion of projects respectively. Further, the act mandates the developers to deposit 70% of the project cost in a separate bank account to cover project development activity alone.
This measure will be substantial in ensuring timely completion of projects and act as a safeguard in the event of any delay, as it would limit diversion of funds for other projects by developers.
Jaxay Shah, president of Credai National, says: “The present RERA requirements fulfil all the niggling issues that had bogged down the sector earlier.Though the compliance burden is heavy, the act has provided the right impetus on ensuring that all due diligence, which all consumers may require, are fulfilled. This will go a long way in restoring consumer faith in the real estate sector.“ Manoj Gaur, vice-president of Credai, National, and MD of Gaursons Group, says: ith the implementation of “W this act, now all approvals will have to be in place and the agreement signed with buyers includes the interest and the penalty clauses laid down in RERA. Also, the statute now demands that the builder should mention carpet area also specify common areas and the parking areas separately. At the CREDAI level too, the apex body of developers is holding training sessions for developers to educate them on the changes expected in the new business environment.
Prashant Solomon, MD, Chintels Group, said, “With RERA the interest of buyers is going to be protected and expected to reinstate the faith of end users in the market as the fence sitters may begin to consider their options to buy while developers will focus towards being more transparent.“
R K Arora, CMD of Supertech, said: “The provisions under which RERA will function have been framed in a manner to regulate non serious players and create a level playing field for everyone. With the implementation of the act the interest of the end buyers will be safeguarded and it is expected that the fence sitters may begin to consider their options to buy while developers will persuade to exhibit their full cooperation.“
Rakesh Yadav, chairman of Antriksh India, says: “This act is aimed at protecting the interests of consumers, and also seeks to promote fair play in real estate transactions and ensuring timely execution of projects. With this act in place, every state will now have a regulator who will be continuously supervising and monitoring.Moreover, the projects will now be completed on time and developers will have to submit all the layouts, plans and documents with the regulator who will ensure transparency and hence, customers will feel more secure while transacting.“
Avneesh Sood, director of Eros Group, said: “With RERA implementation we are sure to find it encouraging towards building a better image for the realty sector.With the government concerned and showing direct intentions towards the sector, RERA will enhance the sentiments in the sector paving way for growth.Possessions are the hot cakes in the sector today and history of a developer in the near future would be judged on the possessions they have offered.“
Pradeep Aggarwal, chairman of Signature Global, said: “With RERA on board and implemented in full force, each state will have a regulator in place to safeguard the interests of the buyers and promote fair dealings in the sector. The hous ing demand in particular, will catch up momentum which will allow better performance of the sector. But, apart from everything else, the one thing that will infuse buyer sentiments in the sector will be of timely deliveries.“
Deepak Kapoor, president of Credai, Western UP, and director of Gulshan Homz, says: “The buyers of property market in particular had waited long for RERA becoming a reality which guarantees safeguarding of their rights and interests. The amendments are fair and developers have already started working on the lines because these will now pave way for a better demand and supply in the sector.“
Ashwani Prakash, executive director of Paramount Group, said: “The regulatory act has been able to arrest the uncertainty in the real estate sector, vis-a-vis the investors and end users. The mere passage of the bill had given a lot of clarity and made real estate dealings more transparent there by bringing the confidence in the investors and the end users. Once this confidence sets in completely with its proper implementation, the market is bound to grow at a steady pace.“
Gaurav Gupta, general secretary of Credai, Raj Nagar Extension, said: “We hope that it will infuse 300% more confidence in the buyers to buy their dream home. Once the Act becomes fully functional in each state, the teething problems will sure be addressed by the government in a practical manner as the intentions of the government is very clear towards protecting the interests of the buyers rather than to strangulate the sector. “ Dhiraj Jain, director of Mahagun Group, said: “RERA’s prime motive is to curb the irregularities persisting in the real estate sector and protect buyers’ interest. There are strict guidelines in the act against developers who are unable to deliver on time. But we cannot deny the fact that developers today are under severe pain of not getting the obligatory clearances and approvals on time; and if this continues then they’ll be axed for no reason. Thus, the government must ensure the passage of single window clearance, so as to allow the sector to work in a much systematic and organised manner, with full support for RERA as well.“
Source: TOI Property section Dated : 6th May 2017
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