While the implementation of the Real Estate (Regulation and Development) Act has been below target, it has seen some positive steps. The achievements of the past year should be seen in the light of the fact that there were no regulations earlier for the sector. RERA brought about a paradigm shift in the real estate landscape. We hoped that it would be enforced within the time limit set by the government, but it would have been an uphill task to enforce it in a short window of a few months.
However, the commitment from various State authorities looks promising. We believe that RERA will come into force across the country soon. Predictably in the next 12-18 months, all the States and Union Territories should be able to establish their respective permanent regulator. One of the steps that the Central government should take to make RERA impactful is align the Insolvency and Bankruptcy Code to it, creating a proper option for exit for development companies.
First anniversary
On the first anniversary of RERA, the implementation is nowhere close to its goal. As of April 2018, only 19 States and Union Territories have an online portal in place and only 5 States and Union Territories have a permanent real estate regulatory authority. So far 27,000 projects are registered under various State RERA. The number of agents stands at 17,000.
The primary objective of RERA is to ensure that end-users of real estate are better protected by bringing transparency into the sector. Buyers have welcomed RERA as it protects their purchase by providing a dedicated tribunal for addressing their concerns. Buyers have also appreciated the sense of empowerment it brings as the information asymmetry is reduced, helping them in taking appropriate decisions. RERA has been welcomed by developers in most cases as this being a straight forward ruling, adherence has been high. Further, it has ensured that developers complete the due process as required by law before launching their projects.
The implementation of RERA would be good for the banking sector, helping it evaluate projects prior to extending loans and mortgages.
Maharashtra’s good results
Of the various States where RERA has been implemented, Maharashtra has shown good results. It has recorded the highest number of registered projects, estimated to be 16,000. MahaRERA has been active in redressing customer complaints and queries, it has empowered and protected consumers and at the same time has given comfort to developers for being fair to all. It has also helped settling of disputes mutually between parties, thus showing the way to other RERAs about being practical and proactive.
(The author is CEO and Country Head, JLL India)
