The much awaited consumer-centric, Real Estate Act, becomes effective from Monday(May 1). The Act will ensure accountability and transparency in the sector and, in words of Union Minister for Urban Development, Housing & Urban Poverty Alleviation M Venkaiah Naidu, will make the homebuyers king. As it is implemented today, only 13 states and UTs have so far notified rules. The Real Estate (Regulation and Development) Bill, 2016, which was passed by Parliament in March last year, protects home buyers largely and encourages genuine private players.
Before its implementation on Monday, Naidu tweeted about the Act and said, “RERA promotes accountability, transparency, and efficiency in the sector. Buyer set to be King. Promoter benefits from king’s confidence.” He further added RERA forges a happy, mutually beneficially alliance between buyers and developers. Rights and duties of buyers, promoters clearly defined.”
Under the Act, there is a provision of mandatory registration and requirement of keeping 70% of the project money into an escrow account. This is likely to reduce the buyer risk to a certain extent and will ensure that developers are not able to invest in numerous new projects with the proceeds of the booking money for one project, thus delaying completion and handover to consumers. The provisions of promotor’s liability for clear title, inclusion of real estate agent under the purview of Act and penalty clauses will increase the overall transparency and accountability in the system.
We take a look at what these 5 experts feel about RERA’s implementation and how it makes homebuyer a king:
Sopan Gupta, Principal Partner, Square Yards
“Implementation of RERA is a significant milestone for India’s Real Estate sector. It will put buyer’s interest at the forefront and discourage malpractices. All stakeholders in the Indian property markets will benefit from increased transparency, standardization of processes and clarity in norms. The Central Government has been quite proactive in getting RERA implemented which must be commended. Together with interest subsidy scheme, GST and other initiatives by the government, RERA will encourage genuine interest in real estate investments in India. It will also streamline the entire process of dispute resolution with an unbiased and empowered regulator.”
Manish Sinha (Head of QuikrHomes)
“RERA is a landmark legislation that is about to change Real Estate into a more customer centric industry. It focuses on increasing accountability of the builders and their agents and on boosting buyer confidence. RERA is a very balanced act, that also puts responsibilities on the authority to grant approvals and declines in a defined time-period, hence pre-eliminating potential bureaucratic delays. This is why RERA is being welcomed by professional builders, who have been preparing for it for some time now. Online real estate platforms can help in creating a trustworthy environment based on tangible data. Based on verifiable information, that should be available from the govt bodies, customers should be able to find about past project delays and incorrect promises and hence choose from the more professional builders. However, providing data and information for many new requirements will be a complex task. The entire buyer and builder community needs to readjust to the concept of carpet area, cost of delays, project centric funding and expenses, and potential of significant penalties.”
Munish Doshi, Chairman, ACME Group
“The buyer and developer relationship will accelerate due to the transparency that will come due to compulsory paper work to be done by both parties leaving no ambiguity. This policy initiated by the government will help in the growth of a much organized format in real estate sector going forward. All the practices & processes will get smoother, transparent, streamlined, bring the sector in a brighter light and above all create a general atmosphere of trust and professionalism amongst developers, regulators and buyers.”
Amitava Mehra, CEO, India Mortgage Guarantee Corporation
“RERA is a much-needed initiative introduced by the government towards safeguarding the interests of the buyers and bringing more transparency to the sector. It is aimed at making home buying a far more easy process. However, care needs to be taken so that the approval processes (which are required in advance) do not become a bottleneck in adding inventory. This is critical to balance the shortage in the market and for the success of the Government’s Housing for All Scheme. Wherever handover and completion certificates have not been obtained, the aim should be to get closures on all properties. Moreover, the regulators will need to closely monitor the impact on the overall market and adjust if required to ensure market growth does not get impacted.
Sunil Sharma, VP-CRM & Marketing, Mahindra Lifespaces on RERA implementation
“The implementation of the Real Estate (Regulation and Development) Act, 2016, is widely expected to increase transparency and accountability in the real estate sector, while improving its ability to attract institutional capital. This augurs well for all stakeholders with a long-term vision for the sector, including developers, investors, agents and consumers. In particular, organised stakeholders with good corporate governance frameworks and customer focus are expected to derive early benefits from the implementation of RERA, owing to existing compliance with many conditions of the Act. The real estate sector might witness the beginnings of a fresh uptrend, driven by improving consumer sentiment in anticipation of higher transparency and efficiency, renewed confidence in the economy, and lower home loan rates.”