The year gone by was an eventful one for the real estate sector, with a slew of measures announced by the Centre to boost demand and infuse liquidity in the ailing market.
While the measures are yet to make a meaningful impact and revive demand, the Real Estate (Regulation and Development) Act, 2016 (RERA Act), which established the Real Estate Regulatory Authority (RERA), India’s first watchdog for the sector, gained ground in 2019.
The RERA Act came into full effect in May 2017, with the objective of bringing in fair practices and protecting the interests of home-buyers. It imposes penalties not only on errant builders but also on delinquent real estate agents.
However, its implementation continues to be irregular in many States. Some, such as Arunachal Pradesh, Jharkhand, Himachal Pradesh, Kerala, Manipur and Meghalaya, have still not been able to implement the legislation in its entirety. West Bengal, on the other hand, has its own parallel legislation — HIRA (Housing & Industrial Regulation Act, 2017.
Due to the uneven adoption of RERA, home-buyers are left without an avenue for redress. Data reveal that only 17 States have dedicated tribunals to handle cases. On the positive side, since many States have adopted RERA fully, project registrations have increased as have developers’ compliance and transparency.
Progress across States
Maharashtra is one of the first States to implement RERA fully; it leads in project and agents registration aa also in speedy disposal of home-buyers’ complaints. The MahaRERA has registered 23,761 projects and 22,599 agents, and disposed of 7,101 complaints out of the 10,029 received, according to recent data.
The State has prioritised buyers’ interests and brought in compliance norms. It has also ensured that there is no delay in project hand-over by setting stringent penalties on promoters for failure to do so.
In States such as Gujarat, Karnataka and Uttar Pradesh, too, RERA made healthy progress last year. In Karnataka, for instance, project registration has gone up from 2,465 in December 2018 to 3,135 in January 2020.
Role of online portals
In States where developers are adhering to RERA regulations, buyer confidence has improved. Buyers prefer realty players with a credible track record of ensuring prompt deliveries and transparency. These States are already witnessing price rationalisation. According to latest data, 48,416 projects are registered with RERA across India.
The online portals of State RERAs play a vital role in boosting buyer confidence. A good portal allows an individual to view the project type, its status (ongoing or completed), proposed date of completion, whether it is subject to litigation, FSI (floor space index) details and the number of flats booked. At present, 25 States have official RERA portals up and running; most have also enabled online fee payment.
Though all States have implemented RERA, it has not yet given a boost to buyers’ confidence nationwide. The slow pace of implementation of RERA in some States, including project and agent registrations, could be the reason. This, and high property prices, may also be keeping demand subdued.
For instance, in Jharkhand, just 178 projects have been registered after nearly three years of RERA implementation. In Punjab, 821 projects are registered. Though the progress of registration is slow, all registrations have to be done online in most States; also they need to provide details on the promoter, project, project status and real estate agents.
While most States have notified rules under RERA, Arunachal Pradesh, Meghalaya, Nagaland and Sikkim are yet to do so. This is mainly due to issues related to land belonging to certain communities; however, the States are in the process of notifying the rules.
Dedicated regulator
Under the RERA Act, each State is required to have a RERA Authority responsible for the implementation of rules and regulations, and ensuring transparency in real estate transactions. So far, 30 States and UTs have appointed this authority; seven are interim bodies. The interim regulators’ efforts fall short of the intended goal of a dedicated real estate regulator, leaving consumers in the lurch. The setting up of a regular authority is critical to monitor the progress of RERA.
Also, under the RERA Act, every State has to establish a dedicated tribunal to address grievances and offer timely redress. If a promoter has violated the terms of the agreement or has delayed handing over of projects, consumers can approach the tribunal and lodge a complaint. The appellate tribunal is expected to adjudicate cases within two months.
According to recent data, only 17 States and UTs have permanent tribunals while eight, including Telangana, Uttarakhand and Gujarat, have interim arrangements. The rest, including Kerala, Nagaland and Mizoram, are yet to set up an appellate tribunal. Therefore, the progress of complaints registered and settled in these States is unknown.
However, according to industry experts, a large inventory of projects remains outside the purview of RERA and the number of projects registered represents a small number. Thus, the Act’s objective of protecting buyers’ interest is still work-in-progress.
While the measures are yet to make a meaningful impact and revive demand, the Real Estate (Regulation and Development) Act, 2016 (RERA Act), which established the Real Estate Regulatory Authority (RERA), India’s first watchdog for the sector, gained ground in 2019.
The RERA Act came into full effect in May 2017, with the objective of bringing in fair practices and protecting the interests of home-buyers. It imposes penalties not only on errant builders but also on delinquent real estate agents.
However, its implementation continues to be irregular in many States. Some, such as Arunachal Pradesh, Jharkhand, Himachal Pradesh, Kerala, Manipur and Meghalaya, have still not been able to implement the legislation in its entirety. West Bengal, on the other hand, has its own parallel legislation — HIRA (Housing & Industrial Regulation Act, 2017.
Due to the uneven adoption of RERA, home-buyers are left without an avenue for redress. Data reveal that only 17 States have dedicated tribunals to handle cases. On the positive side, since many States have adopted RERA fully, project registrations have increased as have developers’ compliance and transparency.
Progress across States
Maharashtra is one of the first States to implement RERA fully; it leads in project and agents registration aa also in speedy disposal of home-buyers’ complaints. The MahaRERA has registered 23,761 projects and 22,599 agents, and disposed of 7,101 complaints out of the 10,029 received, according to recent data.
The State has prioritised buyers’ interests and brought in compliance norms. It has also ensured that there is no delay in project hand-over by setting stringent penalties on promoters for failure to do so.
In States such as Gujarat, Karnataka and Uttar Pradesh, too, RERA made healthy progress last year. In Karnataka, for instance, project registration has gone up from 2,465 in December 2018 to 3,135 in January 2020.
Role of online portals
In States where developers are adhering to RERA regulations, buyer confidence has improved. Buyers prefer realty players with a credible track record of ensuring prompt deliveries and transparency. These States are already witnessing price rationalisation. According to latest data, 48,416 projects are registered with RERA across India.
The online portals of State RERAs play a vital role in boosting buyer confidence. A good portal allows an individual to view the project type, its status (ongoing or completed), proposed date of completion, whether it is subject to litigation, FSI (floor space index) details and the number of flats booked. At present, 25 States have official RERA portals up and running; most have also enabled online fee payment.
Though all States have implemented RERA, it has not yet given a boost to buyers’ confidence nationwide. The slow pace of implementation of RERA in some States, including project and agent registrations, could be the reason. This, and high property prices, may also be keeping demand subdued.
For instance, in Jharkhand, just 178 projects have been registered after nearly three years of RERA implementation. In Punjab, 821 projects are registered. Though the progress of registration is slow, all registrations have to be done online in most States; also they need to provide details on the promoter, project, project status and real estate agents.
While most States have notified rules under RERA, Arunachal Pradesh, Meghalaya, Nagaland and Sikkim are yet to do so. This is mainly due to issues related to land belonging to certain communities; however, the States are in the process of notifying the rules.
Dedicated regulator
Under the RERA Act, each State is required to have a RERA Authority responsible for the implementation of rules and regulations, and ensuring transparency in real estate transactions. So far, 30 States and UTs have appointed this authority; seven are interim bodies. The interim regulators’ efforts fall short of the intended goal of a dedicated real estate regulator, leaving consumers in the lurch. The setting up of a regular authority is critical to monitor the progress of RERA.
Also, under the RERA Act, every State has to establish a dedicated tribunal to address grievances and offer timely redress. If a promoter has violated the terms of the agreement or has delayed handing over of projects, consumers can approach the tribunal and lodge a complaint. The appellate tribunal is expected to adjudicate cases within two months.
According to recent data, only 17 States and UTs have permanent tribunals while eight, including Telangana, Uttarakhand and Gujarat, have interim arrangements. The rest, including Kerala, Nagaland and Mizoram, are yet to set up an appellate tribunal. Therefore, the progress of complaints registered and settled in these States is unknown.
However, according to industry experts, a large inventory of projects remains outside the purview of RERA and the number of projects registered represents a small number. Thus, the Act’s objective of protecting buyers’ interest is still work-in-progress.
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