Post-RERA changes made in agreements: Survey
While 45% of developers don’t have a proper mechanism for RERA compliance yet, there have been changes made to customer and vendor agreements
RERA Act is changing the entire landscape of the real estate sector and redefining the process of how real estate sales happen in India. Every stakeholder, right from the government, bankers, private equity to consumers, are unlearning the old ways of operating and aligning to the new systems/processes which are RERAspecific.
According to Navin Raheja Chairman, FICCI Real Estate Committee, “RERA, which came into force from 1 May 2016, is now seen as one of the most significant reforms in the real estate sector.
According to RERA, all the state governments were to put in place the Act’s rules and regulations for their respective states by May 1, 2017. The government of Karnataka has notified their rules in July 2017.”
As per the latest survey on RERA, 45 per cent of the real estate developers have no formal process in place to manage compliance mechanism of RERA.
The survey report by Grant Thornton in India and industry body FICCI, reveals that majority of the board and senior management (78 per cent) of real estate companies are using common methods like excel based MIS (Management Information System) reporting to review RERA compliance.
According to Neeraj Sharma, Director, Grant Thornton Advisory Private Limited, “Like any other major reform, RERA has its own sets of initial challenges, which are causing disruption in the sector. However, everyone including the developer fraternity is positive about the longterm impact of RERA. The survey has pointed out some very interesting perspective on how developers are gearing up for this big change and making appropriate changes to their systems and processes in addition to identifying areas where more focus is needed.”
When asked about the initiatives taken to strengthen project planning for timely completion of projects, more than 50 per cent of
SENIOR MANAGEMENT ACROSS REALTY COMPANIES ARE USING METHODS LIKE EXCEL BASED MIS TO REVIEW RERA COMPLIANCE
the respondents expressed that a focused approach to enhance skillsets of internal teams with trainings is crucial. In fact, over 75 per cent developers have used training as a tool to improve customer experience.
However, 37 per cent respondents felt the need to hire independent experts as Project Management Companies (PMCs) to manage their projects.
Post RERA implementation, where are the positive changes seen?
As per the survey, more than 70 per cent of the developers have made changes to the customer and vendor agreements. Significant changes have been made to the Agreements, with the developer and vendor now sharing equal liabilities under the contract.
How has RERA been implemented across states in India? The state with best response to RERA has been Maharashtra where 12,000 real estate projects are registered till date, and 350 complaints filed.
This is followed by Karnataka where 1900 real estate projects have been registered, Uttar Pradesh with 730 and Haryana with 400 projects registered.
Punjab, Rajasthan, MP, Gujarat and Maharashtra are states where RERA regulator is appointed and portal launched. However, the RERA rules have not been notified in the states of Goa, West Bengal and states in the North East belt.