The introduction of the Real Estate Regulation and Development Act otherwise simply known as RERA will have far reaching consequences for the industry. In short it will change the functioning of the industry as we know it. Professionalism and transparency will be bywords and not sarcastic cuss words used to label builders.
The act has changed several ground rules for the paying customer. Interested customers will now pay for what they are seeing and for starters carpet area means the net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment. More importantly estimated cost of real estate project means the total cost involved in developing the real estate project and includes the land cost, taxes, cess development and other charges; ‘interest’ means the rates of interest payable by the promoter or the allottee, as the case may be, Explanation – For the purpose of this clause the rate of interest chargeable from the allottee by the promoter, in case of default, shall be equal to the rate of interest which the promoter shall be liable to pay the allottee, in case of default; the interest payable by the promoter to the allottee shall be from the date the promoter received the amount or any part thereof till the date the amount or part thereof and interest thereon is refunded, and the interest payable by the allottee to the promoter shall be from the date the allottee defaults in payment to the promoter till the date it is paid. That is a very important change for the paying customer.
In Goa, RERA is being worked on the details are being worked out. Desh Prabhudessai, president, Credai, Goa chapter said “Rera is a good thing and we are in the process of the formation of rules and the registration will commence once all of its falls into place. Credai Goa has informed the authorities that we are ready for the RERA world. We have 70 members in the CREDAI and most of them are ready and we are willing to help others who approach us to help them understand it. Generally I will say the industry is well organised and we are watching the experiences of builders in other states and they have accepted it.” He however went on to say that with all the responsibility of delivering the project on time, it was also important for the government to move fast in terms of giving licenses.
Dinesh Sinari another builder in Goa also welcomed RERA, he said “All the builders in the State were following the rules laid down in the act which will not cause any problems. However, the escrow account is something new, but it was certainly welcome.” This bill he said had come about following the bitter experiences of interested parties in the north of India. Projects in Delhi NCR were delayed for years and now this act would end all that.
Another builder who did not want to come on record said this act would remove all fly by night operators which had entered the business in the State. He said “I know of project managers and site engineers coming together completing a project and then projecting themselves as builders. It was getting ridiculous. Someone with property would tie up with a friend and construct a building and call themselves builders. This act will ensure serious players will remain in the fray. The construction industry is now being regulated like the telecom and insurance industry which is good.”
Another builder who again did not want to be on record said “The rise in paper work is dramatic and we are still dependent on the whims and fancies of bureaucrats who can withdraw the permission without notice. It is there in the act. Yes, there are the options to go to Court but this is going to increase the power and reach of the average bureaucrat. And yes, I will say it, corruption will increase. We are all going to live in interesting times. I will also say this. With all the transparency there will be more investors coming into this industry.”
RERA will clean the stables so to speak and make it easier for the small investor looking forward to buying his house. There will be pluses and some minuses and the rest as they say should be left to time to show everyone how it all worked out.
