De­vel­op­ers scram­ble for Real Es­tate Act com­pli­ance, but buy­ers re­main scep­ti­cal

Most builders are in­cor­po­rat­ing RERA pro­vi­sions in the sale agree­ment with buy­ers and en­sur­ing timely de­liv­ery of projects

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Van­dana Ram­nani van­dana.ram­

The year 2017 will be sig­nif­i­cant for home­buy­ers ha­rassed for years be­cause of prop­erty sale agree­ments lop­sided in favour of de­vel­op­ers, vi­o­la­tion of build­ing rules and de­layed home de­liv­ery. The con­sumer­friendly Real Es­tate Reg­u­la­tory Act (RERA), which kicks in from May 1, has pushed de­vel­op­ers to sign agree­ments with buy­ers and take other ini­tia­tives which they claim are RERA com­pli­ant.

The act has some strin­gent pro­vi­sions in­clud­ing three-year prison terms or heavy penalty for de­vel­op­ers fail­ing to com­ply with its pro­vi­sions.

Real es­tate ex­perts and RERA ac­tivists say that most de­vel­op­ers are quickly adopt­ing com­pli­ance mea­sures by set­ting up ex­pert teams of project man­age­ment con­sul­tants to en­sure timely com­ple­tion of projects. Some are even plan­ning to adopt the build and sell mod­els for projects in­stead of hous­ing project prelaunches, which might be scrapped al­to­gether once the Act is im­ple­mented.

New rules re­quire only those projects with all ap­provals in place to be ad­ver­tised and sold to home­buy­ers. In­for­ma­tion re­lated to ap­provals, time taken for com­ple­tion and master plan of the project have to be dis­closed be­fore the launch. Each project must also have an in­di­vid­ual es­crow ac­count, with 70% of sales pro­ceeds de­posited in it.

Many de­vel­op­ers are up­grad- ing their agree­ment to sell, train­ing sales pro­fes­sion­als on in­ter­fac­ing with cus­tomers, set­ting up spe­cial com­pli­ance teams to mon­i­tor projects and en­sur­ing timely com­ple­tion of projects. Tech­ni­cal ex­perts are also be­ing taken on board, says Su­mit Jha, di­rec­tor and CEO, Na­tional In­sti­tute of Real Es­tate Man­age­ment (NIREM).

Ac­tivists and home­buy­ers, how­ever, re­main scep­ti­cal of the de­vel­op­ers’ moves. “If there are de­vel­op­ers claim­ing that they are in­cor­po­rat­ing RERA norms and that their builder-buyer agree­ment is RERA com­pli­ant, it is noth­ing but a mar­ket­ing gim­mick,” says Ab­hay Upad­hyay, na­tional con­venor, Fight for RERA.

States are ex­pected to no­tify the real es­tate rules, in­clud­ing the gen­eral rules and the agree­ment for sale rules to es­tab­lish the real es­tate reg­u­la­tory au­thor­i­ties and the ap­pel­late tri­bunals by April 30 this year.

How­ever, only the four states – Gu­jarat, Mad­hya Pradesh, Ma­ha­rash­tra, Ut­tar Pradesh and six union ter­ri­to­ries have so far no­ti­fied the fi­nal rules and not the agree­ment for sale rules. Some states have also di­luted rules.

A look at some new agree­ments drawn up by builders re­veal that there are enough dis­clo­sures for cus­tomers to take an in­formed de­ci­sion about in­vest­ing in a prop­erty. The agree­ment spells out the en­tire pay­ment sched­ule that in­cludes ex­ter­nal de­vel­op­ment and in­ter­nal de­vel­op­ment charges but there are loop­holes too that need to be plugged.

“The agree­ment states that the de­vel­op­ment au­thor­ity con­cerned has granted the com­mence­ment cer­tifi­cate to de­velop the project along with the ap­proval date and the num­ber. It de­clares that the pro­moter has reg­is­tered the project un­der the pro­vi­sions of RERA with the real es­tate reg­u­la­tory au­thor­ity,” says Ak­shat Pande, part­ner, Seth Dua & As­so­ciates.

The amount to be paid by the buyer is clearly stated in the agree­ment and is meant to be es­ca­la­tion free. This means is that there will be no arbitrary es­ca­la­tion in prices by the pro­moter go­ing for­ward,” he adds.


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