Mumbai, June 10: The implementation of the Real Estate Regulation and Development Act (RERA), 2016, in Maharashtra has led to a drop in project launches by almost 24 per cent in the first quarter of FY 2017-18. the drop is expected to continue as real estate builders adjust to the rules and requirements of RERA.
The finding was highlighted in a recent survey called ‘Maharashtra RERA transpires-What next?’ conducted by Colliers International. The survey particularly highlighted the various challenges faced by construction firms including the requirement for approvals before registration, fresh processes leading to cautious about providing accurate estimates regarding projects and the required sale along with the limited 2-month window for completing the registration process.
Colliers International Executive Director, Office Services and Investment Sales, Ravi Ahuja is reported by PTI as having said, “The developers have been selling projects and units based on the marketing plan and layouts, and super built-up areas often represent a loading on the nature of amenities a project offers. Since the FSI norms and rules have differed from sale plan and chargeable areas of projects, it is posing a challenge for developers.”
He added, “There is hesitation of under-construction projects sold prior to RERA to follow RERA rules.” Similarly, Colliers International Senior Associate Director, Research, Surabhi Arora reportedly commented, “With the RERA becoming a reality now, it is important for developers to prepare for the changes promptly. The change in the real estate cycle may act as an entry barrier for small players and speculators. We believe improved project planning will help developers avoid delays and manage project funds efficiently.”
The report also found that the infrastructure set up by the Maharashtra RERA authority may not be ready to support the registration of so many projects leading to a delay in the registration process. RERA, that came into effect on May 1, 2017, requires that all new under construction projects register with the state regulatory authority before July 1, 2017.
The Maharashtra state RERA regulatory authority is responsible for notifying various regulations for the sector within the state for both residential and commercial real estate transactions. Further, the regulatory authority will allow for the speedy redressal of disputes between buyers and developers and help in enhancing the trust between the two. The landmark act is meant to safeguard the interests of home buyers.