The Real Estate (Regulation and Development) Act or RERA is a nuanced act which proposes to overhaul the manner in which the real estate sector operates. There will be greater scrutiny of every transaction and realtors will be encouraged to set up internal systems to comply and operate in the new regime. This however will not be a one way street. Authorities will have to shoulder responsibilities too. They will be required to either approve or reject a project in a defined time-period.
Desh Prabhudessai, president, Credai, Goa said the government had recently requested realtors to register their projects and the government had decided to extend the date of registration till October 31 of ongoing projects.
He said “We expect the government to try and come out with rules and regulation within the next fortnight. The government is still accepting physical copies. The website is expected to be ready very soon. The state government will follow the template set at the centre. RERA will be a monitoring body which will have the interests of the consumer and more importantly concerned with the timely completion of projects”.
RERA, which proposes to become a customer centric industry, fails to address the most pertinent existing problem of customers- the delayed projects – as RERA rules being scripted by states like UP and Maharashtra cleverly kept ongoing projects out of the ambit of the law.
Desh said this would not be the case in the State since builders followed the rules and such a demand was not made here.
Many builders approached for this article refused to come on record though were more than willing to speak off the record. With several decades experience in the business, this builder said “One has to accept that builders in some cases made promises which were not kept. Now it will not be possible. Many of them would promise a swimming pool at the time of taking deposits to confirm bookings and then later renege. Now it will not be possible. There is another problem that we have to look at seriously. The fees that realtors have to pay to register each projects is ridiculous. It can range from anywhere between Rs 50,000 to Rs 10,00,000 which is way too much for a place like Goa. It has to be re-looked. At Rs 10 per sqm it is very high.”
Another builder welcomed the legislation saying that every industry had legislation and this was long overdue. The problem however was that the industry had low barriers to entry which meant anyone could become a builder. A contractor having worked on a project could construct a building on a plot of land he owned and call himself a builder. Which meant a large number would be fly by night builders. Taking payment for work that has just started on one project to buy property in another place was common practice and he said this would now stop.
Builders in Goa he said largely had integrity which meant one did not have the situation that was common in NCR outside Delhi. Long term players in the State had integrity and he also said that this being a very small state, people spoke and word of mouth could make or destroy reputations of companies.
He said many small time builders had land and it would be interesting to see what they did with it. A property consultant in the State said many of the builders she was talking to were contemplating getting out of the business.
She said “Many of them believe the degree of inspection will be unbearable and projects would now depend on the whims and fancies of one person who would be heading the dept in the State. She said many were now contemplating just buying land, converting it and selling it at a healthy profit to big builders.”
Denzil Xavier, founder president of the Goa Association of Realtors and Governing body member of the National Association of Realtors, India said it was a very good initiative and it would mean there would be greater clarity in every transaction. RERA, he said would also make it compulsory to do work with RERA compliant consultants. Another realtor who did not want to come on record said “The registration fees that we as realtors have to pay are very high and the value of the transactions do not match those in the metro cities. It would be nice if this is looked at by the state government.
Dipesh Cholera of Shantilal Real estate said with this all the fly by night operators will move out, especially those who try to play with the consumer’s money. He said “All that will stop now. You will need to have systems in place. It will now be the survival of the fittest”.
Another builder though sadly said “We will now have to deal with another bureaucrat or politician who will head the department and it will be on his or her whims that our project will be cleared. We will have to provide a timeline to the consumer as to when the apartment will be delivered but we will still be dependent of the authorities for permission. Nothing really changes. We may have to pay off one more people. It’s crazy”.
