The much awaited Real Estate (Regulation and Development) Act (RERA) 2016 which was envisaged as a landmark reform for the real estate sector has finally been in effect since May 01,2017. The Act will modify traditional practises of the real estate sector and will focus on improving accountability, governance, financial discipline and customer centricity in the sector.
More significantly, RERA is expected to promote transparency, accountability, discipline and efficiency in construction of projects, making a conducive environment for investments in the real estate sector.
Having said so, the new Act appears to be of limited help to the customers already invested in projects which got delayed or suffering due to the land acquisition litigation, NGT orders, Master Plan disputes, delayed for not getting approvals in time etc. While RERA does not offer any remedy for the delays in getting approvals from Authorities, delay due to Court Orders etc. the stringent provisions of RERA might give trouble to promoters of such projects but any punishment would not serve the purpose of the investor. The Government and its agencies would do well if under-construction projects are salvaged by providing safe passage so that these projects get completed within minimum time and possession ensured to safeguard the interests of investors.
More and more Indians are moving from farmlands to cities and towns each year in search of jobs and opportunities, the country is witnessing a massive wave of urbanisation. This has led to huge shortages of home dwellings in major cities which have seen fast but unplanned growth in recent years. The new law, if implemented successfully, will act as a catalyst in reviving the buyers’ confidence in the real estate sector and eradicate the fly by night developers.
In today’s environment, transparency and credibility are the most cherished value of corporate governance. They assume even greater significance in the real estate sector as projects costs are high in value and fundamental in development of communities. Supertech is among the few organisations that addresses customer queries on all aspects of their investments.
This Act will also make it mandatory for the developers to park 70 percent of the project funds in an escrow account. This will prevent the developers from deploying funds raised from one project to numerous other projects. It gives me pleasure to reiterate that Supertech has been deploying funds received from a project in construction of that particular project and is therefore on track to start delivery of projects from this year itself.
It is however pertinent to note that the State governments will play a pivotal role in RERA’s effectiveness by officially notifying RERA and subsequently appointing nodal agencies for daily monitor the projects’ progress. As of now only a few states in India have notified RERA whereas most of them have not. We would therefore urge the state governments to notify RERA giving safe passage for the under construction projects in order to safeguard the interests of the customers.