Monthly real estate monitor by JLL

Passing of the long-pending Real Estate Regulatory Bill, which was being hotly debated and second-guessed for far too long, is an unequivocal victory for the Indian real estate sector.

It is by far the most decisive step the sector has taken towards transparency and reaching the kind of standardized processes, procedures and accountability guidelines that the industry requires to progress.

The real estate industry welcomes the major reform that promises to bring in much-needed transparency and accountability to the rather opaque sector. It will create a much-needed consumer right protection umbrella for buyers of real estate, thereby increasing consumer confidence as well as creating lasting developer brands strong on quality and timely delivery of their projects.

As there will be strict punishment for errant developers as well as fines for project delays and faster redressal of consumer complaints, the problem of unscrupulous elements in the industry will be addressed. Norms on size of projects had been relaxed from 1,000 sq m to 500 sq m and further reduction in size can be brought under the purview of the regulator by state governments.

A single-window clearance is needed now, without which there may be cases where bonafide delays by developers may still result in an unfavourable penalty. The time taken to get many environmental, state level and municipal-level clearances have afflicted developers for long.

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Without ensuring that the approval process is not delayed by civic agencies’ inaction or setting up a single-window system, the regulator may inadvertently add another layer to the longer processes already delaying projects.

This law will reduce volatility seen in this sector and build the trust deficit between both stakeholders – builders and buyers. RERA will provide a positive impetus towards achieving the housing dream while ensuring a level-playing field for developers and buyers.

With real estate having linkages to the largest number of industries, the bill is a verdict to end the age of information asymmetry, lack of accountability and unwarranted project delays and marks the beginning of rising transparency, liquidation of assets – and importantly, positive
sentiment.