Over an year has passed since the real estate law came into force, but not all states seem ready for it as they still have to set up regulatory authorities, experts said on Monday. “In places where states are ready, developers are not ready. For a large number of developers, RERA (the Real Estate (Regulation and Development) Act, 2016) meant filling up of forms, which are lengthy and cumbersome.
“With the new rules, developers will have to redesign their allotment letters, sales deed, brochures, advertisements and their cash-flow management to become RERA-ready,” said Madhya Pradesh RERA regulator Antony De Sa at a panel discussion here organised by realty portal MagicBricks.
The Real Estate Act came into force on May 1, 2016 promising more transparency to protect the rights of customers. States had to set up their regulatory authorities within an year (by April 30, 2017) and developers are supposed to register projects under the regulator within three months (by July 31, 2017).
MagicBricks Head, Content and Advisory E. Jayashree Kurup said that two months down the line, not every state had RERA regulators.
“As there are no regulators in many states, such states will have to take a lead. Active markets such as Chennai, Hyderabad and Bengaluru don’t have regulators. Foolproof enforcement is what we need. This can be achieved by laws, definitely, and regulators in plenty.
“With two months of implementation of the Real Estate Act, the number of registrations across states is still minimal. A lot needs to be done in this direction for a smooth transition,” she said.
Another problem is that a majority of developers have not understood the RERA requirements, say experts.
“Project registration with RERA requires a concentrated, meticulous effort over a three-four week period, balancing multiple considerations (cash flows, marketability, optimum FSI utilisation) etc. with respect to project phasing strategy, scrutiny and analysis of project data and documents for disclosure (sales, approvals, legal cases, financials and agreements),” said KPMG in India Partner and Head, Building, Construction and Real Estate Sector, Neeraj Bansal.
Continuing RERA compliance requires a significant shift in mindset towards a well-planned and organised project design and execution with customer as a focal point for all activity, he said.
National Real Estate Development Council (NAREDCO) Chairman and DLF Ltd CEO Rajeev Talwar said: “Naredco had been orgainsing paid-for services to guide developers on how to be RERA-ready. We need to change the mind set for RERA to kick in.”
Haryana RERA Executive Director Dilbag Singh Sihag said even though the state has not officially notified rules, developers are being registered after submitting an affidavit.
“In Haryana, more than 15 applications have been received, out of which eight registrations have been issued while others are in the pipeline which will be issued shortly.”
Khaitan and Co Partner Sudip Mullick said that all aspects of laws have been adequately covered under other Acts, including the Transfer of Property Act, Contract Act among others and so there was no need to have another law.
“India is among the top countries of the world with the highest per capita law. I don’t think we needed a new law. A regulator was needed which we have got in the form of RERA but by enlarging the scope of law, we have created a lot of confusion.”