Is the realty sector ready for RERA?

new real estate law, aimed at bringing transparency and accountability to the sector, is set to come into force on Monday across the country even as significant hurdles in implementing the law remain.

Many states are far from ready with the infrastructure and resources to implement it while most builders and real estate agents said they are still trying to understand the regulations and in early stages of preparing themselves to comply with the new Real Estate (regulation and development) Act (RERA) 2016.

In March 2016, both houses of Parliament passed the real estate bill that ensures transparency and protection of interests of both the buyers and builders. It is a model law, which means it is up to the states to draft and pass their own laws according to the guidelines, as land is a state subject. The centre had asked all states to notify the Act before April 30. All real estate developers and agents are to register with their respective state regulatory authorities by July 30.

So far, only 13 states and union territories have notified the new rules, of which only three states—Maharashtra, Madhya Pradesh and Rajasthan—have appointed a housing regulator. Besides, none of the states, apart from Maharashtra, has set up a website where developers and brokers can register or apply for new projects under the new Act.

“Few big states with major real estate activities are in advanced stages of either having notified (the new rules) or in a position to do that. However, we will have a peculiar situation from May 1, as most states are not ready with the new law or has a regulatory authority. In these states, no new registrations and project launches can take place,” said Neeraj Bansal, head (real estate and construction) at consultant KPMG India.

KPMG has been conducting workshops for stakeholders including government bodies and developers to educate them about the new law. Bansal said most developers would need about 6-8 weeks of work to make themselves RERA-compliant.

“Developers and brokers need to get their house in order in the next two-three months. There are huge gaps in the understanding and the requirements under the new Act. Developers should be able to collate the documents, have necessary approvals that are lacking to get the registration and also need to relook at the relationships with different vendors and third parties they currently work with,” he said.

Jaxay Shah, president of the real estate lobby group Confederation of Real Estate Developers Association of India , said: “There will be teething problems for many developers” resulting in delay in launching projects and impact on home sales for the next few months.