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Finally a big win for Home Buyers – Rajya Sabha passes the Real Estate Regulatory bill

Finally a big win for Home Buyers – Rajya Sabha passes the Real Estate Regulatory bill

Souma Mukherjee/RealtyMythsReal-Estate-Law-Slide-967x350
The passing of the long-pending Real Estate Regulatory Bill, which was being hotly debated and second-guessed for far too long, is an unequivocal victory for the Indian real estate sector. Its enactment as a law will almost single-handedly revamp the way this sector works across the board, from developers to end-users and investors, to lending institutions and government agencies involved in the buying and selling of property. It is by far the most decisive step the sector has taken towards transparency and reaching towards the kind of standardized processes, procedures and accountability guidelines that the industry requires to progress.

Industry Reacts: 

Anuj Puri, Chairman & Country Head, JLL India shares, the real estate industry welcomes the major reform that promises to bring in much-needed transparency and accountability to the rather opaque sector. It will create a much-needed consumer right protection umbrella for buyers of real estate, thereby increasing consumer confidence as well as creating lasting developer brands strong on quality and timely delivery of their projects. As there will be strict punishment for errant developers as well as fines for project delays and faster redressal to consumer complaints, the problem of unscrupulous elements in the industry will be addressed. Norms on size of projects had been relaxed from 1,000 sqm to 500 sqm, and further reduction in size can be bought under the purview of the regulator by state governments. A single-window clearance is needed now, without which there may be cases where bona-fide delays by developers may still result in an unfavourable penalty. The time taken to get many environmental, state-level and municipal-level clearances have afflicted developers for long. Without ensuring that the approval process is not delayed by civic agencies’ inaction or setting up a single-window system, the regulator may inadvertently add another layer to the longer processes already delaying projects.

Arvind Jain, Managing Director – Pride Group: The real estate regulatory bill has been long in the pipeline, and has now cleared all roadblocks and become a law. Various decision makers involved in it had been ambiguous about their stance towards this vital regulator, and as a result it remained pending. Now, it has finally received the green signal and is all set to revolutionize the Indian realty market. It will empower consumers by giving them confidence while making their real estate investments. It imposes strict regulations on how developers conduct their business, and underwent various redrafts aimed at doing this. It is very encouraging that the bill is now a reality.

Mr. Rajesh Prajapati, Managing Director- Prajapati Constructions: We welcome the passage of this bill. This will make the real estate industry more organized and mature. It will bring transparency to the sector and the passage of this bill will mean that the reputed long term players will be greatly benefited along with customers. Timelines will be more closely adhered to and also the quality of construction in projects will increase. The only worry is about the inclusion of under construction projects as it will mean a lot of difficulty for the developers. Therefore, only new projects should come in the ambit of this bill. Also, a definite time frame for approval of projects needs to be built in, maybe at a later stage if not now. Most importantly the buyer will now have a peace of mind as he/she will know the project validity and also get complete authentic information about the same.

Kishor Pate, CMD – Amit Enterprises Housing Ltd: The real estate needed the Real Estate Regulatory bill more than any other single piece of legislation, even though GST, the Land Aquisition & Rehabilitation Bill, single window clearance and industry status are by now means of less importance.  The industry has been in express need of an apex body via which all concerns of consumers can be addressed transparently and efficiently. We will now see a radical transformation of the entire residential sector. Strict enforcement of project delivery timelines, verifiable construction quality and assurance of legal clearances will finally become a reality, and the consumer confidence which had all but evaporated will return. It is a most welcome development.

Anil Pharande, Chairman – Pharande Spaces: The Indian real estate sector has historically been unregulated and very disorganized. Unfortunately, the unorganized segment has so far represented the largest share of the market, and it is in this segment that consumers have in innumerable cases been held hostage to by unscrupulous practices of ruthless developers. The real estate regulatory bill was drafted with a vision to give clarity and assurance to real estate buyers via various strictures. Now that it has become an enforceable law, it will have a profoundly positive effect on how both domestic and global investors view Indian real estate. More importantly, it will give homebuyers a strong measure of assurance.

Mr. Kushagr Ansal, Director, Ansal Housing: We are now just one step away from receiving probably the biggest news for the real estate sector with Lok Sabha to give a final word on it. Developers will now have to park 70 percent of the amount collected from the buyers of the project in a separate bank account. Also, marketing and selling of the projects will be based on carpet area basis and not super area basis, thus justifying the amount which the buyers pay for a property.

Mr. Ashok Gupta, CMD, Ajnara India Ltd.: It is very imperative to understand that the demand and respect of real estate sector has been moving downward for several years now attributing to the negatives pertaining in this sector such as fraud committed by several builders, possession delays and absence of a monitoring body, and this will continue if proper action is not taken. With this bill in place, every state will have a regulator who will be continuously supervising and monitoring. Moreover, the projects will now be completed on time and developers will have to submit all the layouts, plans and documents with the regulator who will ensure transparency and hence, customers will feel more secure while transacting.

Mr. Deepak Kapoor, President CREDAI-Western U.P. & Director, Gulshan Homz: The buyers of property market in particular were waiting for this news to come out which guarantees safeguarding of their rights and interests. Lok Sabha is still to approve on the bill, which looks more like a formality looking at the majority the government has there. Once RERA becomes a reality, the buyer’s fraternity will be overjoyed and the much needed justice will be finally served. For long has this sector and its buyers being affected, but with RERA in place, there will a regulator in every state who will monitor all the transactions and have answers for the grievances. The amendments are fair which will now pave way for a better demand and supply in the sector.

Mr. Aman Agarwal, Governing Council Member NAREDCO & Director, KV Developers :“ The approval of Real Estate Regulatory Bill is a complete turnaround for the sector and the Indian Economy. In the line of strengthening and organising the sector, this move will surely become a paradigm shift. It is indeed a positive step taken by the government to regulate the sector. It will definitely work towards bringing transparency into the real estate market and provide the sector much needed fillip. As regards project wise 70% deposit, a better option would have been cost of construction plus 10% in escrow account, as cost of construction differs state wise.  This would help in recovery of debt cost as well as holding cost and allow sufficient breathing space to developers. Clauses like all approvals before launch and abolition of pre-launch sale will boost sentiments across the realty sector. Further, we appeal to the government to create an efficient fast-track approval system so that there may not be any unwanted delays so as to enable the developers to execute the projects on time.”

Mr. Vikas Oberoi – Chairman & Managing Director, Oberoi Realty Limited: We are very pleased that Real Estate Bill was finally passed by the Rajya Sabha. When the Bill will become an Act, it will ensure more transparency in realty deals and help protect the rights of the buyers. This will boost buyer confidence and in turn will also help increase sales. This bill also looks at the developer’s interest by taking into consideration external factors in case of project delays. This Real Estate Regulator will look at all stake holders – the buyers, developers and the authorities. We hope all the states will start adopting this act without any further delay so that the housing industry witnesses uniformity across the country to ensure that our Prime Minister’s goal of Housing For All by 2022 is achieved.

Mr. David Walker, Managing Director, SARE Homes: The passing of the Real Estate Development Bill today was a much awaited decision. We hope it will give home buyers the confidence to return to the market. The Bill will make real estate more transparent and organised and responsible builders will prosper. We encourage the government to also bring EDC charges paid to local authorities under the scope of the regulator to ensure timely delivery of infrastructure that has been paid for by home buyers. A more formal and regulated industry should in time also benefit from improved access to capital markets.

Mr. Ravi Saund, COO, JMS Buildtech: It is a big relief for not just homebuyers but the developers as well. It intends to protects the interest of both homebuyers and the developers. It will for sure weed out fly by night operators. The bill will evoke the much needed transparency and accountability in the real estate sector. Real Estate Regulatory and Development bill aims to create a consumer right protection shelter, there by restoring and boosting confidence of consumer in the real estate sector. Now that the bill intends to infuse credibility into the sector, it will attract investment both the domestic and international.

Mr. S K Sayal, Managing Director & CEO, Bharti Realty Limited: “It’s a great news to see the Real Estate Regulatory Bill becoming a reality. From the macro outlook, the approval of this bill is a big positive for the Indian Economy. From the point of view of the sector, it is a much awaited development and will be a milestone to regularise the Indian Real-Estate landscape.  It will bring the much needed transparency for the consumers and accountability on the developers end. The bill addresses some real issues that will bolster the sector:  the inclusion of escrow mechanism, timely completion of projects and build financial sensitivities. It will help the industry to grow in an organized manner and will check entry for the unorganised players. With this bill the long subdued sentiment in the Real-Estate sector is expected to get the much needed boost.”

Mr. Amit Modi, Director, ABA Corp and Vice President CREDAI Western UP.:“A regulator to curb malpractices in the real estate sector is welcome hence we whole heartedly welcome this bill but we still feel a law without making all the stakeholders concerned accountable, will not be able to help the purpose at large. Projects are often delayed due to graft in the issuance of permits and clearances. Government agencies issuing permits should be brought under the law and made accountable for undue delays. On an average it takes 2-3 years to start a project after land is acquired; by this time the cost of land rises by 24-30 per cent due to hefty interest payments as bank loans are not available for procuring important raw material in this sector. The added cost ultimately gets passed on to the customer. These costs can be curtailed and passed on to the consumer, if developers can start building faster and also deliver larger volumes quicker for the consumer.

Dr. Anil Kumar Sharma, CMD, Amrapali Group: Passing of Real Estate bills in Rajya Sabha today is a boon for the home buyers. Now, it will bring more transparency to the sector and will protect the interests of buyers. Also, developers will be obliged & bound for timely delivery of their units and it will provide much needed boost to the center’s mission of Housing for All 2022 mission”

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