With RERA Act making construction approvals mandatory afore launching a project, most of the developers are hoping for single window clearance as it would not only ensure timely delivery of the project but will also regulate the property prices.
Indian real estate sector plays a vital role in country’s infrastructural development as well as GDP. After agriculture, real estate is the second major employer that is slated growth at 30% over the next decade in India. The development of this division is well complemented by the development of the corporate environment, office space and also urban and semi-urban accommodations.
However, inspite of its contribution to the economy, the industry is highly unorganized and unstructured. For a project, a developer has to undergo series of approvals from various departments. Each of it takes an uncertain amount of time. There are approvals required at different levels that a builder has to wait for from the beginning to completion of a project. These levels include:
- Approval at pre-sanction stage
- Approval at sanction stage
- Approval at building permit stage
- Approval at construction stage
- Approval at completion cum occupancy certificate stage.
Due to the uncertainty of the time frame of approvals, there is a grace period of 6 to 12 months when it comes to project delivery. However, at times it does take longer than 12 months for a developer to receive approvals, each day’s delay cost add to the overall construction cost of the developer as well as refrains a homeowner from acquiring his/her dream home.
On the other hand, it becomes difficult and frustrating for the homeowner to understand the reason for project delay. Whether the developer is inefficient or the reason is genuine becomes a bigger question for the consumer. In some cases, by the time, buyers realize that the project has failed to take off; they have already invested a chunk of money on the given property. In today's market, customers therefore want to purchase a property which has full approvals as that will give them an assurance that the project is legally clear and will be completed on time.
But the fact is that delayed approval causes pain to developers and buyers equally. Developers also suffer financial and credibility loses. Quicker and streamlined approval process will ensure that developers are able to plan and allocate resources accordingly. This will define their investment on the project and also control the cost of it. Also, as approvals are in place possession date of any particular project will not have a negative impact. Possession of any project will be delivered on time and developer will have an upper hand in increasing property price on regular interval depending on the inventory left in a particular project.
A single window clearance system is the need of hour. It will not only bring structure & transparency in the industry but also reinstate consumers’ faith in developers and will automatically have a positive impact on sales and pricing.
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