Finally RERA (Real Estate Regulatory Act)is becoming effective by 1st May 2017. But several state governments are yet to notify the rules and circulate when we are left with less than a week for the deadline. This needs to be seen what kind of form it is going to take. Some of the provisions in the current form are extremely onerous on the developers while there is not accountability fixed with the regulators / approval authorities.
Few are below:
- The existing projects should get registered within three months times. It is not clear on how a developer can bring back 70% money if the same has been collected / invested elsewhere. What happens if the developer has already invested the money elsewhere or not able to bring back the required sum within the time frame or if the construction has not progressed due to some of the Govt. agency has stopped the construction even after providing all the approvals. What will happen to those projects? One can punish the developer, how the home buyers in those projects are going to get their homes.
- After providing all the approvals for the project, still any of the Govt. agency can still stop the construction or create trouble for the project, the construction has to be stopped. In such case, who will be responsible for the home buyers?
- While the Act is going to be extremely beneficial to the community both the home buyers and to the developers, the Act still needs to go through some more fine tuning. The Act should bring balance amongst all the stakeholders including the Govt. Agencies.
- Once the Act is implemented in the right form, this is going to immensely benefit all the stakeholders. The industry itself will be shaped up well.
- This will drive away all the fly by night operators from the market.
- This will bring lot of discipline in implementing the projects.
- This will bring down the supply in a short term of may be about next three to five years. This will increase the cost of the homes.
- This will differentiate good and bad developers and the good ones will stand out.