window system for getting mandatory It is a known fact that real estate developers would benefit immensely from the changes that RERA will bring in. And a happy developer would lead to many happy home-buyers. Read on...
Over the past couple of decades, the Indian real estate market has assimilated global best practices and we see those reflected in aspects of the design form including innovative construction practices, architecture, structural stability, enhanced use of new technology, all of which have played a major role in the growth of the Indian real estate market. In sync with the growth in quantitative terms, there were issues that started getting attention. Among the topics, the most important one centered on `self-regulation' vis-à-vis `regulation by a legal process' i.e. enactment of a Regulatory Act with corresponding rules.
Industry bodies began working on the aspect of self-regulation; some initiatives were made but these were at best voluntary and it was just a matter of time before the `official' regulator ultimately came through. With the state government officially signing off RERA, both, developers and buyers, feel that it will give the much required impetus to the sector. The Real Estate Development and Regulation Bill assure buyers transparency and commits to bringing in structure into the property market. When the Real Estate Regulatory Authority (RERA) was first mooted in India, it came with some positive points and one major stumbling block. It will change the way real estate developers function, by bringing in accountability. This will ensure a corporate style of working across the real estate development industry and effectively, will enhance the confidence of home-buyers. So, the first impact of RERA should be a positive one for both, real estate developers as also the home-buyers.
Along with the positive aspects for the developer community, RERA also incorporates aspects, which are worry some: interpretation from the initial documentation suggested that the blame for delayed delivery or late possession of a real estate project to a buyer, was entirely laid at the doorstep of the real estate developer without taking into consideration the inordinate delay by the authorities. Effectively, this seemed to create an uneven playing field, one where the developer would be responsible for delays caused by other agencies or authorities. So, there were protests against the unfair norms, which placed the entire blame on the developers. This was sadly, misconstrued as an opposition to cleaning up the system which certainly was not the case. Effectively, the worry is that RERA will end up favoring home buyers and it may be at the cost of builders and developers. What would make things right is a level-playing field, where developers are not held responsible for delays caused by other agencies. As of today, RERA is a reality and the challenge for real estate developers post RERA's implementation, is to transact their businesses in a processed manner, thus bringing in transparency and professionalism which effectively, should ensure that home-buyers get their promised homes delivered on the promised date.
Post RERA, the new scenario will ensure that all developers and builders follow financial discipline, thus ensuring that they do not transfer funds meant for one project to another project. Effectively, this is a positive measure, as it will ensure sufficient funds for the projects to get completed and timely delivery of flats to the homebuyers. Additionally, the developers will have to organise increased funding as the customer receipts shall be escrowed to the specific phases of the development.
To ensure that this happens smoothly, the industry needs to move ahead; the powers-that-be need to move on to providing a single clearances from various central and state authorities. The implementation of the Right to Services Act should help for permissions to be expedited. Secondly, authorities must ensure time-bound completion of infrastructure like roads, water and electricity supply as well as the local transport system, so that the right sort of urbanisation takes place. In conclusion, real estate developers will benefit from the changes that RERA will bring in, while the enhanced trust quotient for home-buyers obviously, should usher in `achche din'.
The author is founder and Chairman Hiranandani Group
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