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- Realtors brace for chaos, pain, rising costs as RERA comes closer to reality
Realtors brace for chaos, pain, rising costs as RERA comes closer to reality
The new legislation to regulate the building industry in the country has been welcomed by everyone. AJIT JOHN spoke to builders in the State to understand their reaction to this piece of legislation that will change the modus operandi of many
The initial reaction to RERA has been very welcoming. And the general consensus is that it will take three months for the bill to be implemented in the State. The Real Estate Regulation and Development Act will radically overhaul the way the industry is run. The essence of the legislation is to provide protection to the individual interested in buying a house. It is undoubtedly the most important bit of legislation for a sector which has generally functioned like the Wild West.
The central law is excellent in principle according to the considered opinions of builders in the State but they also felt it should reflect the realities in the State. When asked if this was a way to water down some of the tough regulations put in place, Desh Prabhudesai, chairman, Credai Goa Chapter said “It is a wonderful piece of legislation. We have to move ahead and formulate everything fast within three months. It should move. We in the State should mirror the Centre in the law. It will make housing more transparent and ensure greater coordination between buyer and seller. This will increase the trust factor. We have to follow the code of conduct as I like to put it. I however believe, with builders having to reorganise their systems to live in this new word, it will have to be very important for the government to be prepared. Approvals will have to come very fast and it cannot linger, like it does now”.
Another builder from Panjim with much to say was Kulashekhar Katipudi of Milroc Constructions. Mr Katipudi said “Once the government brings the rules, notifies and puts it in place, there will be chaos all over the country. Whenever there is something new, people will react. If things are not clear, realtors will go to court. RERA says, the owner of the flat should get a five year warranty but every product in the country comes with a one year warranty. Then there is the matter of so many certifications which are now required, which requires experts who will charge fees. Ultimately the customer will have to pay for it”. According to him it would take two years before it would take off and developers in that period would not launch any projects as they wait, watch and understand the entire gamut of RERA.
Chinmay of Akar Developers felt it was a very good move but would result in much pain in the short term but great in the long term. He felt it would weed out the fly by night operators who constructed one building, flouted rules and then sell the flats and just disappear. He however felt the authorities would have to start giving approvals on time. He said “It is a major concern, it should be on time and we are hoping the authorities don’t misuse RERA and strong arm builders from time to time. One concern has not been addressed. Town and Country planning may take time with their clearances.”
Established builders he felt who had their systems in place would not face any problems. He also believed this would result in an increase in the cost of the property. He said “Certain insurances will have to be taken and which will be added to the project. It will be as much as 10% per sq ft for the builder.”
The new legislation will result in projects being completed on time and when the flats are sold all the papers will be in order. This, Sunil Datwani believed would stop pre selling. He said, the papers would be all now given to the buyer and the horror stories of the past would be that, of the past. Mr Datwani said some states had diluted it but Goa ought to follow the Central government.
He said “It will be good; there however will be a noose around the developer’s neck. It is important to ensure that we are not just consumer friendly at the cost of the builder. There will be a need for technical people because builders will have to upload monthly reports on their projects. We have to avoid chaos.”
Another builder who did not want to come on record felt construction activity would slow down as everyone waited and watched and more importantly prices would not fall as the price of land would continue to remain high in the State. Perhaps one could say buying a flat may not be the start of a process towards a heart attack but of a more mutually satisfying experience. Time will tell.