The union government of India recently
notified the rules under the Real Estate Regulation Act, which will be
applicable to the five union territories. Now, all the states are expected to
notify their own rules, in the near future.
However, the question that remains,
is whether the rules will meet the expectations of home buyers and the realty
sector. Although numerous promises have been made over the years, not much has
moved forward, from ideation to actual implementation of policies, asserts
Rohit Poddar, managing director of Poddar Housing and Development Limited. “A
fair Real Estate Regulatory Authority (RERA), should hold both, buyers and
developers accountable and ensure transparency in the real estate development
space. It will help developers to become more fiscally prudent and focus on
delivery timelines.
There is clearly a trust deficit between customers and
developers and this trust deficit will hopefully, be bridged very soon,
thereby, benefitting the entire industry,” adds Poddar. See also: Should you
buy a house now or wait for the Real Estate Regulation Act? Key features of the
rules notified under the Real Estate Regulation Act Developers have to open an
escrow account for all sales proceeds and use this account for all payments for
the particular project. 70% of the money collected, has to remain in the escrow
account, to facilitate all project-related expenses and the rest of the money
can be taken out by the developer to use as they deem fit. There is an interest
penalty for delayed possession that is imposed on the developer.
Projects can
only be launched, upon receiving the relevant approvals from the concerned
authorities. These approvals have to be put up on the RERA website, along with
all the pertinent project details and the project has to be approved by the
regulatory authority. Customers can log onto the RERA website, to see the
project’s details. Sale of properties will strictly be on the basis of carpet
area. Any grievance/complaint has to be resolved by the state’s real estate regulatory
authority, within 60 days. Can the RERA fulfil home buyers’ and builders’
expectations?
Dhaval Ajmera, director of Ajmera Realty, feels that
“Transparency and trust factor will automatically increase, as it will become
mandatory for developers to post all information pertaining to the project’s
plan, layout, government approvals, land title status, sub-contractors to the
project and schedule for completion, with the state real estate regulatory
authorities. This law will act as a regulator, to govern both residential and
commercial real estate transactions.” Tier-2 and tier-3 markets, where a lot of
consumers have lost their money in the past, will again see a spurt in
investments. Moreover, FII investment and FDI investment into real estate, will
also grow. While the notification of the rules, is definitely a step in the
right direction, the success of the Real Estate Act, will depend on its
implementation, maintains Boman Irani, vice-president of MCHI-CREDAI. “However,
we should always remember that this act is intended to safeguard the consumers
and it should never be treated as a tool to only penalise people,” concludes
Irani. “RERA should be implemented in its true spirit and not become another
centre for corruption, harassment and delays. The government should ensure
speedy and correct implementation of the Act” Rohit Poddar, managing director
of Poddar Housing and Development Limited. “RERA, is a blessing in disguise for
the entire sector, as it will regularise the purchase process and improve transparency”
Dhaval Ajmera, director of Ajmera Realty.By: Housing.com/news
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