With the Real Estate (Regulation and Development) Act or RERA coming into force effective May 1, builders are preparing for a stricter regime while consumer sentiment index is improving. However, several states such as Assam, Tripura, Karnataka, Tamil Nadu, among others have still not formalised RERA rules.
Currently, Maharashtra, Uttar Pradesh, Madhya Pradesh, Rajasthan, Gujarat, Andhra Pradesh, Bihar, Chandigarh and Orissa have finalised their rules. Establishment of the Act will ensure smooth sale of properties via a transparent manner. Registration of projects will protect homebuyer interest and organise the sector and create a sound mechanism for speedy conflict redressal.
Let’s take a look at some of the expert opinions on how RERA will transform the Indian real estate sector:
RERA is a great move in the right direction to make the Real Estate industry more transparent and professional but implementation would be the key. It will surely build a positive perception about the brokerage business and overall real estate industry and help customers gain back the trust that was eluding the market. With RERA being implemented, the developers will have to file all the required information with the regulator, and hence realtor will have the correct information to pass on to the customer. To make it more effective, central government will need to take a lot more into its hands than what it has right now. They have to closely monitor the role of each stakeholder and the implementation by authorities within the states without diluting the sole purpose of this act.
The Act ensures formalisation of the Indian real estate sector with required transparency and strengthening the relationship between consumer and developer. This will directly impact fly-by-night players to vanish away and at the same time, the clear and transparent developers could gain the momentum and will revive the confidence of homebuyers by delivering quality projects in specified timelines. This bodes well for end-users, who will have the assurance of not being cheated.
Anamika Gupta, Director, PurpleYo
The Bill will finally aim to regulate the real estate industry within a coded framework of rules and laws. It will also help in boosting investor sentiments and attract foreign investments which will provide the much-needed boost to this sector. Owing to a regulated industry, institutional capital will flow more easily into project funding and help some of the large commercial building projects towards completion. FDI, private equity and debt players will find it easier to invest owing to the market becoming more transparent and attractive. One of the major requirements of RERA is that all agents and agencies need to be registered with the Regulator and being accountable for their business practices. It will stop any unorganised player to start his or her own brokerage service which automatically will help regulate the functioning of this sector.
Shishir Baijal, Chairman & Managing Director, Knight Frank India
The unorganised world of broking in India would see a new paradigm with the implementation of the Real Estate (Regulation and Development) Act 2016. From being merely a facilitator between buyers and sellers, brokers will now have to adopt a bigger advisory role attached with responsibility for projects and disclosures. The survival of broking firms will depend on how they inculcate a corporate culture in dealing with both the stakeholders. It is good that brokers have been brought within the ambit of RERA and any deviation would invite penal actions. Although there would be teething problems the move will see the emergence of a new consolidated broking fraternity.
Implementation of RERA Act 2017, will play a major role in strengthening the alliance between buyers and developers. This law is going to reform the Indian real estate sector, making it more transparent and will bring in a speedy, systematic and accountability within the proceedings. RERA will certainly make the environment positive. The provisions under which it will function, have been framed in a manner to regulate non-serious players and create a level playing field for everyone. With the implementation of the act the interest of the end buyers will be safeguarded and it is expected that the fence sitters may begin to consider their options to buy while developers will persuade to exhibit their full cooperation.
The Real Estate (Regulation & Development) Act 2016 (RERA) that comes in to force from today will usher in accountability and transparency in the sector and will revive confidence of key stakeholders in the real estate sector. At the same time, we are optimistic that the government will also streamline and ensure expeditious approval processes at various levels in order to establish a successful implementation of the landmark RERA.
Rohit Gera, MD, Gera Developments Ltd & VP CREDAI
The commencement of the RERA is a landmark in the history of real estate development in India. For decades there have been no barriers to entry to the industry and absolutely no performance parameters. The risks of delayed delivery, poor quality of construction, changes in the final product from what was promised, sales made without permits and developers running out of money on account of fiscal indiscipline used to be borne by the flat purchaser. With the introduction of RERA, these risks will now all be borne by the developer. The increased costs associated with these risks will eventually be transferred to the end consumer through an increase in prices. On the whole, RERA, the first step of consumer protection is now completed. The next step, however, is to eliminate corruption in the sector which will help bring more transparency and more number of homes to the end consumer.
Brijesh Bhanote, CMO, Paras Buildtech
RERA (Real Estate Regulation Development) Act that has come into effect, is a progressive law that will ensure sale of properties in an efficient and transparent manner. For developers, it is an excellent opportunity to establish trust with consumers by being accountable and transparent about their business. Buyers and investors will now have an increased confidence in the market, which will improve the overall housing demand and boost the growth of this sector.
Manju Yagnik, Vice Chairperson, Nahar Group
RERA is widely welcomed by developer fraternity. The new law is anticipated to change the situation 360 degrees as it will give a sense of security to consumers who invest their hard earned money into the real estate sector. The act abides builders to provide all project related information on regulator's website for public knowledge, right from the current phase of the project, to the permissions acquired or pending by the developer etc. With this, I believe that developers should be given more time for the administrative work of the projects. As of now, the set deadline for the registration of all real estate projects with the regulatory authorities is 31st July 2017. This looks challenging as not just developers but also respective authorities will require some time to get their paperwork work done.