As the deadline for RERA registration draws to a close, Maharashtra RERA chief Gautam Chatterjee spoke to FE’s Priyanka Ghosh and Shubhra Tandon outlining the next few steps, how the authority will take charge of projects that are out of construction finance, what recourse consumers have if their money is stuck in incomplete projects and plans to tackle pace of requisite permissions. Excerpts:
After registrations close at the end of this month, what are your immediate priorities?
We expect a rush on the website in the last few days and our immediate priority (post-July) will be to give registrations. We have set up three levels of scrutiny and in case papers are not in order, we will ask for more rectifications. Typically, we can take a few hours to a few days to approve registrations. So the month will go in completing the entire process, registering the ongoing projects first and new launches as and when they come up. Simultaneously, the online complaints tab will also be open so the system of taking things to its logical conclusion will be set in motion.
Could you give us the latest registration numbers, which has been slower than anticipated?
The rate of registration has picked up some pace now, about 900 projects have so far been registered and we expect something in the range of 10,000, including phases, which we count as singular projects.
Could you take us through the kind of team strength you have built? And in case of dispute, how will you ensure veracity?
This Act has been set up on the premise of disclosures. There are some mandatory requirements but the truthfulness of information cannot be examined by us, we are simply going to go by declarations. Our scrutiny is limited to whether the uploads are legible and approvals are in place. All information is based on ownership and we will act only on complaints. Companies will need to answer on the basis of the disclosures made if and when they get pulled up. But as such, there is no capability to go for project to project inspection. Our main lookout is that consumers’ money should not be stuck in projects, they should get what they were promised in a timely manner.
There are projects that are already delayed, even as much as by two to three years. What recourse would these home buyers have, if any, under RERA?
So, effective May 1, developers will have to pay an interest for project delays. It is in the interest of developers to shrink the completion date else the payout rises so the pressure is on them. Before that date is not my domain.
But what if a project is stuck because delays mainly occur on account of no construction finance and there are plentiful cases in which developers are unable to build for lack of funds?
Leave those problems to me, I have to deal with them; the question is how do you resolve it in a manner that is beneficial to both financiers and consumers and of course, the developers. That is a challenge and we will cross the bridge when we come to it. Developers will have to take financiers as well as the authority into confidence; they cannot unilaterally take decisions and we will have to find a solution, how is a million dollar question especially when there is no demand. Of course, we have to evaluate willingness to restructure, refinance so we will deal with those issues.
How do you propose to deal with situations wherein a project is delayed on account of delayed permission?
RERA is a platform for the aggrieved, both consumers and developers. Nothing prevents companies to come up to us and bring the delays to our notice. The penalty otherwise is too huge. Delinquencies can be looked after, we can summon the necessary stakeholder and inform suitable authority.
The sector is going through some stickiness because new launches have declined drastically, mainly owing to companies now adjusting to RERA. How long will it take for business as usual?
Developers can launch projects tomorrow if they want. The culture of soft launching and then diverting the funds to other projects instead of focusing on completion is why they now need to spend this time on calculating timelines, not RERA itself. If they delay too much, they might miss opportunities because as much as this Act will drive out delinquents, it will attract entrepreneurs who have so far not tapped into this sector for its bad reputation, but now will.