The Indian real estate sector, as we all would agree, is gradually seeing revival and the business in this segment is definitely moving away from the shackles of the challenges hurled by the COVID-19 pandemic. However, the question that still lurks is whether the sector is really free from the unscrupulous tendencies and whether a home buyer really feels that a home buying process is secure, trustworthy and transparent for him/her.
The government’s efforts towards curbing challenges in the Indian realty segment are commendable. It takes a lot to set a positive transformation in motion and various measures from the government have proved that the right initiative with the right intent can work wonders. Post the implementation of RERA, we have witnessed how the sector was affected as a whole only due to the unethical practices of some. RERA has been the answer to the ills that have wreaked havoc in the real estate sector.
RERA, as we all know, stands for Real Estate Regulatory Authority and the word ‘regulate’ is a verb that means ‘to control something by using laws or rules’. Undoubtedly, ‘control’ is what we need to uproot the unscrupulous elements degrading the sector and shattering dreams of unsuspecting, innocent buyers. The crux of RERA is to implement stringent rules that justifies each and every stakeholder of their right and ensures that the law takes its course if any of the stakeholders flouts the rules.
There are some important guidelines of RERA and prominent of those are mentioned below –
- No under construction real estate project can be marketed without approval from RERA
- All relevant information to be published on RERA website and all marketing collateral to carry RERA number for buyer to cross check what she/he is being promised and what’s approved as per RERA
- Guidelines of maximum payment that can be collected by developer before actually registering agreement to sell
- Model draft agreement to sell
- Escrow account mechanism to prevent diversion of funds by developer from respective project account so as to ensure timely construction and delivery
- Clear specification of project delivery date and strict penalty on developer in case of late delivery
- RERA court offers a quasi-judicial redressal mechanism for buyer for quick hearing and decision
- Facilitation of effective and quick amicable settlement by serous and well-defined neutral arbitration
- RERA registration mandatory for brokers also
Apart from direct benefits mentioned above, there are numerous indirect benefits of this regulatory environment. One of the major changes is that the sector is getting consolidated. Big corporations and trusted brands like Godrej, Shapoorji Pallonji, L&T Realty, Mahindra, Lodha, Brigade Group, Prestige Group and many more are taking major positioning. There are multiple buyouts and takeovers by these big brands. All are very bullish on the sector and have chalked out big expansion plans.
This consolidation is a good signal for the buyers because of the brand value, trust factor and the confidence that the buyers bestow on corporations. These corporations are redefining the way a business is undertaken in real estate. Right from product design to sales and post sales, the focus has been to delight the customer. Although it is still early to comment on how successful they would be, their intent is very positive, loud and clear i.e., ‘End consumer is the king and the king should be treated like one.’
Investors, both retail and institutional, are gaining trust and money is flowing into the sector. Private equity investments have shot up and so have the capital being raised as QIP’s or IPO’s etc. Foreign investment firms are taking more interest in the wake of the regulatory framework.
Another trend coming up is that corporatized and large Proptech brokerage houses are helping developers as well as brokers to move towards an era that is smooth and seamless for a buyer and help make a buyer’s transaction experience wonderful and memorable. These companies leverage technology to its best capacity to ensure the home buyers have a hassle free, seamless home buying experience and the real estate brokers and developers are empowered and enabled to manage their business portfolios efficiently.
While a completely-reformed Indian real estate sector may be far-fetched, some positive implementations by the government to regulate the sector have been definitely triggering prominent ripples of change in the sector. If the government continues to adopt strategies to revive the segment, monitoring, scrutinizing and regulating it very closely, I strongly believe that we can usher into an Indian realty era that will be a boon to every single stakeholder within the segment.
(By Ashish Narain Agarwal, Founder & CEO, PropertyPistol.com)