A RE(RA) of hope

India Today - - UPFRONT - —M.G. Arun

The much-touted Real Es­tate (Reg­u­la­tion and De­vel­op­ment) Act or RERA came into force on May 1, but many states are yet to set up their own real es­tate reg­u­la­tory au­thor­i­ties and ap­pel­late tri­bunals to ad­dress buy­ers’ griev­ances, as man­dated. Only 13 out of the 32 states and Union ter­ri­to­ries have es­tab­lished their own real es­tate reg­u­la­tor so far. Hav­ing said that, Delhi and Ma­ha­rash­tra, two of the largest mar­kets for real es­tate in In­dia, have a reg­u­la­tor in place now. The oth­ers may form RERA bod­ies shortly.

How will this help the buyer? Un­til de­mon­eti­sa­tion dented prices in many cities, as black money sup­ply to the sec­tor dried up, many projects re­mained out of bounds for the mid­dle class buyer. More­over, the seg­ment was char­ac­terised by in­or­di­nate de­lays in get­ting pos­ses­sion of homes, ab­sence of the promised ameni­ties, and de­vel­op­ers tweak­ing norms to add il­le­gal struc­tures to projects. Home buy­ers could sel­dom get their com­plaints re­dressed; be­sides le­gal re­dress is an ex­pen­sive and time-con­sum­ing process.

RERA prom­ises trans­parency in the home-buy­ing process and greater ac­count­abil­ity on the part of de­vel­op­ers. All projects on 500 sq. m. or more of land and hav­ing eight apart­ment blocks or more come un­der the purview of the Act. De­vel­op­ers will now have to park 70 per cent of the money they col­lect from buy­ers for a pro­ject in a sep­a­rate es­crow ac­count, so that it can be tracked to en­sure it is used only for the said ven­ture. Also, the de­vel­oper can’t make changes to the orig­i­nal pro­ject plan with­out the con­sent of two-thirds of home buy­ers. Buy­ers, too, need to reg­is­ter homes with the same au­thor­ity. This should have a pos­i­tive ruboff on the real es­tate sec­tor.

WALLED UP Un­fin­ished projects in Greater Noida, UP

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