With many states yet to set up regulatory authorities or frame final rules, the confusion prevailing over RERA is understandable. Many aspects of the Act still requireclarity and developers have diverse concerns, as was witnessed in the panel discussion held as part of the R&M RERA Reality Podium. Herewith, we reproduce key observations made by developer representatives on the panel, the concerns highlighted and the questions raised.
CMD, Tulip Infra
If we talk about Haryana only, developers are in a state of confusion. They are not in clear state of mind. Only 10 or 12 applications for registration have been submitted so far. The Government and the RERA Authority should arrange some awareness programmes so that people come to know more about this. People in Haryana believe that till the time the authority is formed, they cannot apply for a project. What are the options for those who would like to register themselves? Are you accepting the applications?
Director, Assotech Realty
My serious concern is about the on-going projects, say for example, it’s a project of 20 towers and 18 towers have been completed. This is a high-cost project, say of Rs12,000 per square feet, and only two towers are left. Now the interest burden is for the entire project. The developer wants to service that fromthe next two towers but these are under RERA now. How to service? Because, see the construction cost is very less, maybe 30 -40 percent of the total cost and the developer has planned his entire interest services from those two towers. How to service that at the moment?
Similarly, some of the things like whether old agreements will be valid or not in case of on-going projects?
The Agreement to Self has to be done, ofcourse, for the old agreements also. But will that be composited in the stamp duty further or not? The clarification is needed
There is another question of market crash. The bulk of the customerdoesn’t pay and the project is delayed because of that. The rest of the customers will also ask for refund. The builder by that time has completed 60 percent. How will he refund to everybody with interest?
Business Head, Proptiger.com
For the last one year since the Act was passed, our team has been working with the consultants to align our processes so that we comply with RERA provisions and we don’t have any non-compliance. Because we have a large sales team across multiple cities, we are keeping a very close eye on what’s happening in different states, where the website is going live. As soon as it goes live, we want to be the first one to approach.
It’s something similar with the developers since they are being told to get registered before they can work. Overall, the environment is actually waiting very eagerly for all our states to come up with final rules. The longer it takes for this process to stablise, the more it’s it’s going to hurt the business because customers are not very sure whether they should buy today or wait for the RERA regime to come. We are waiting for all the regulators to come up with the final rules and start websites so that we can start business.
Head of Policy, RICS
One of the aspects we have been talking about is the Stephen Agreement (?). Let’s say a developer has not fundamentally been able to complete the project, or maybe, he is stuck. Typically there is somekind ofa Stephen Agreement that covers both, the Government and the lending institution. It basically allows the developers somekind of an exit route, takeover of the asset. Now obviously, it can’t be applied exactly right to the T in the case of a real estate project. But there are still certain ways and means by which this could possibly be worked around.
Yes, the Act is pretty clear that going forward to the projects,let’s say the 20 towers case that was just mentioned. These can technically be split into two different phases with each phase being registered separately, as a separate project in itself. So in that particular situation, this route probably would be very effective. But going forward, so far as current projects are concerned, there has to be some kind of workaround that has to be developed.
Pankaj Kumar Jain
Director, KW Group
Protecting the interest of both the homebuyers as well as the genuine developers on the back of increased transparency and a relationship of trust with the customers, RERA will herald an exciting new era of growth in real estate sector. It will boost consumer confidence which will further result into bringing much desired growth momentum in real estate sector sooner or later.
Arjunpreet Singh Sahni
Executive Director, Solitairian Group
We believe the mechanism of RERA will be beneficial for all the stakeholders of the industry. Benefiting the entire industry in the long run, the regulatory law will promote fair practices and facilitate an environment where there will be no place for fly-by-night operators.