Two years of RERA: Has anything changed in Indian real estate?

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Real Estate Regulatory Authority (RERA) celebrated its second anniversary this month. Enacted in March, 2016 and effective from May, 2017, RERA’s primary aim was to ensure regulation and promotion of the entire real estate industry in India. Since inception, RERA was welcomed by the entire real estate fraternity including but not limited to real estate developers, home buyers, investors, housing finance companies, etc. It was expected that RERA will address crucial attributes and issues that has been plaguing the sector for long. Timely completion, transparency, pricing, construction quality etc. being some of them.

RERA, a central act, mandates all the states as well as union territories to form their respective act and state regulator. The implementation ‘progress’ of this relatively new regulation has been different among different states.

Total number of states in India

29

Number of states that have notified RERA

23

Number of states with permanent authority

20

Number of states with operational online portal

19

While, Maharashtra and Gujarat are considered front runners in terms of RERA implementation, registrations, orders and pro-activeness. MahaRERA has recorded highest number of registered projects i.e. 21,060 followed by Gujarat with 5,451 real estate projects. In terms of grievances addressal, MahaRERA has passed 4,726 orders in line of the 7,452 complaints received. Another state with an impressive track record is Madhya Pradesh with 1,868 complaints addressed. Interestingly, West Bengal has its own version of real estate regulation, outside the ambits of RERA, known as West Bengal Housing and Industrial Regulation Act (WBHIRA).

Apart from the above mentioned figures, different state RERAs have taken certain out of the box steps and issued special provisions to improve their overall effectiveness. Some of them are discussed below –

  • MahaRERA has reached out to 60-70 projects that are under stress and will be assisting them with its completion.
  • MahaRERA added a new feature called ‘view on map’ to explore RERA registered projects at home buyer’s preferred locality.
  • UPRERA decided to form a tripartite committee (with a member of UPRERA in the committee) for completion of a residential project in Greater Noida. UPRERA intends to help real estate developers in completion of their projects and simultaneously regulate cash flows.
  • GoaRERA decided to form taluka-level committees specifically for resolving long-pending cases of property buyers.
  • Tamil Nadu RERA will publish the list of complaints filed against developers on the online portal. This will help home buyers to make an informed decision.
  • MahaRERA has also proposed to give developers a second chance to complete their delayed projects. Provided that, more than 50% of the customers agree to this second chance and the project is not under Insolvency and Bankruptcy Code, SARFESI, etc.
  • As per the directions of Bombay High Court, MahaRERA has also started taking complaints regarding projects completed much before the formation of RERA. MahaRERA will receive complaints against an unregistered real estate project, on its web portal, for free.

Over the past two years, RERA has become the preferred institute (over National Consumer Disputes Redressal Commission) when it comes to real estate redressal. In the post-RERA era, sentiments of home buyers, investors (both domestic and foreign) and financiers have seen a positive trajectory in terms of investing in registered Greenfield real estate. Owing to this, some developers have started using RERA as their co-brand in their marketing communications. The fact that the initial implementation days of RERA may have caused a bit of slowed down market. However, within two years RERA has become a key driving force behind positive trend in the market. This unilateral act with universal impact has penetrated the Indian economy by increasing the domestic and foreign investment in the real estate sector of India. The pace of impact that RERA is making on the realty sector has so far been moderate but, definetely consistent.

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