Homebuyers had high hopes when the central Real Estate (Regulation and Development) Act came into effect on May 1, 2017. It was expected that implementation of RERA will bring speedy completion of delayed projects with each state and Union Territory forming its own real estate Regulatory Authority.Also Read - DLF Chairman Rajiv Singh Overtakes Macrotech Founder Mangal Prabhat Lodha To Become Richest Indian Real Estate Entrepreneur
Cut to the present and one will realize that not much has happened since the implementation of RERA. There are many states that have not even set up their regulatory body yet. Others who have implemented RERA have done a lot of tweaking favouring it for builders rather than home buyers. Also Read - Jammu And Kashmir Opens Up For Real Estate Investors, MoUs Worth Rs 18,300 Crore Signed
According to the website Apnarera, till date, out of 35 states and Union Territories excluding Jammu and Kashmir, 8 have still not yet notified their respective RERA rules. Also Read - Builders to Pay Interest if Possession Not Delivered as Per Agreement to Flat Buyers: Supreme Court
Pankaj Kapoor, Founder and Managing Director, Liases Foras, a real estate consultancy firm, says, “Maharashtra has been the best in terms of implementation of RERA, followed by Madhya Pradesh and Telangana. However, there are states such as West Bengal that have not even come up with their websites. North Eastern states have also fallen behind the curve in terms of implementation of RERA.”
Considering that most of the developers are based out of Maharashtra and Karnataka, Kapoor says, 50-55% of the developers’ market has already got covered under RERA.
Mudassir Zaidi, executive director-North, Knight Frank India, a property consultancy firm says, “Things are going very slow as many states have not even appointed regulatory bodies. The real estate industry is in the transition phase considering these are large scale changes.”
Dilution of the Act
Several states that have implemented the Act have diluted some of the original provisions of the central RERA to make it favourable for developers. For example, the Gujarat government has diluted provisions regarding punishment of the developer in case of non-compliance of rules. According to the original Central RERA, the promoter of a project would face up to three years of imprisonment or penalty up to 10% of the project cost, or both, for non-compliance.
However, in Gujarat the promoter can escape jail term if he pays five per cent of the estimated cost of the project.
Similarly, original RERA stated to cover both new and ongoing projects. But many states have tweaked their rules to exclude ongoing projects from the ambit of RERA.
For example in Haryana, the definition has been diluted to exclude projects, which have applied for completion/occupation certificates or development licences or part-completion certificates. Kapoor, says, “With many states tweaking the definition under RERA, it is expected that in the next month or so intervention from the Central government might be there for the proper implementation of Central RERA.”