What began as a mission to empower home buyers, now has a concrete existence in the form of RERA.
Government of India has enacted the Real Estate (Regulation and Development) Act 2016 and all the sections of the Act shall came into force with effect from May 1, 2017, thereby laying the foundation to address the grievances of the aggrieved home buyers. For years, the complaints would lie in either the Consumer courts or in Civil Courts. The long drawn litigations relating to the disputes between the Home Buyers and the builders often caused distress to both the parties. Thus, the birth of RERA is the hope for speeding up the litigations as also to keep a leash on the fraudulent and defaulting builders. RERA is a game changer like many other economic reforms that have taken place since the inception of the Modi Government.
RERA takes into its purview the Promoters as well as the Real Estate Agents.
On the first anniversary of the Real Estate (Regulation and Development) Act, 2016, here is a review of its implementation by industry experts. The collective sentiment reflects that RERA has identified challenges in its execution, and has a long way to go in making the real estate sector more efficient and transparent.
Jaxay Shah, President, CREDAI National: The implementation of RERA has been nothing short of a game changer for the real estate sector. However, there is a clear disparity between States with regards to the implementation, with regions such as Maharashtra setting the benchmark in the industry. The lack of infrastructure and non-notification of RERA rules by some States have led to delays and loss of revenue to different stakeholders. The RERA tribunals have also not been set up by most States. CREDAI has been urging the government to set up RERA in each State to address home buyer grievances. This will further decrease participation of the higher courts and provide quick and low-cost solution to most cases. CREDAI believes that the lead from Maharashtra has to be followed by forming a RERA conciliation panel wherein CREDAI will partner and offer its support.
Shishir Baijal, CMD, Knight Frank India: The RERA is a path-breaking law, with immense potential to revive buyers’ confidence and drive momentum in the residential real estate market. States such as Maharashtra, which implemented the regulation in true letter and spirit, witnessed signs of up-tick in residential sales and overall consumer sentiments. While it has been observed that just over one out of 10 State governments showed the political will and gravity in executing the Act, we believe that other States would soon follow suit.
TushadDubash, Director, Duville Estates: Implementation of policies like RERA and GST last year had a significant effect on real estate, and it brought about a substantial shift in the market. Consumer sentiment is finding its way back as is being reflected in sales offtake levels of established developers. Simply put, the Act ensures transparency and efficiency in the market and safeguards the rights of home buyers.
Kamal Singal, CEO & MD, Arvind SmartSpaces: RERA was aimed at improving transparency and it has been successful in enhancing the overall sentiment towards real estate. The entire process, right from buying of land, funding of projects to delivery of the final product to the buyer has witnessed a positive change, which has proven to be beneficial to both customers and developers. The efficient and transparent property market has made India far more attractive to both global and Indian investors and will increase demand for organised real estate.
Niranjan Hiranandani, President, NAREDCO: Under RERA the Indian real estate sector has its first regulator. RERA has made it obligatory for States and Union Territories to structure their own regulator and outline the rules that will administer the operation of the regulator within their jurisdiction. RERA is a big step forward, but it will take some more time for all the States to comply with the norms for bringing in the much-required protection and transparency. We have to see how things will pan out before we start assessing the RERA performance.
Ram Walase, MD & CEO, VBHC: Despite the initial turbulence, RERA could transform the industry for the better. It could become more organised like the auto industry - driven by clearer product definitions, standardised technologies, well-defined branding & positioning and intensive customer service orientation. Other value chain elements such as land acquisition and project approvals, which were the mainstay in the past, could become ancillary inputs. Some of the immediate challenges that need to be addressed are: (a) While developers are penalised under RERA for not delivering, the approving authorities have no direct accountability. Integrating this aspect with the RERA could be an important reform; (b) The institution should discourage / penalise frivolous complaints against developers so that the RERA is not misused.
Surendra Hiranandani, CMD, House of Hiranandani: The realty market is experiencing consolidation as unorganised players are struggling to cope with stringent compliance norms under RERA. It is now clear that only credible developers will survive in the future. This is good from a buyer’s perspective as one is assured of a quality product within stipulated timelines. With RERA in place, home buyers can also hope for a risk-averse journey. Under RERA, the developer has to provide a written affidavit to the buyer stating that the legal title to the land on which the construction is planned contains legitimate documents of ownership. Title insurance is a form of indemnity insurance which insures against financial loss from claims in title to real property. While other forms of insurance provide protection against future loss, this provides cover for an event in the past which has resulted in disputes.
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