After demonetisation, which almost brought house sales to a halt, real estate developers are grappling with the Real Estate Regulation and Development Act and the Goods and Services Tax (GST). “Real estate has gone through many down cycles since 1991. But we have not seen three tsunamis together. The developers are bound to act in accordance with laws and any delay attract penalty. Real estate market is down and it is up to the developers to hand over the flats well ahead of time. As a result, the builders and developers sign the agreement in such a way and show that the completion of work will take longer duration on paper, than the time they actually hand over the flat. This is serving as a cover for inordinate delay if any, due to unfortunate circumstances in completion of the project in the wake of disaster, or lack of cement available in the market or in case of natural causes. Despite all the clauses available to flat buyers, some builders do not follow the rules and try to cheat the buyers and thereby they are made to pay penalty even amounting to Rs 1 lakh per day for the delay in completing the projects. It is time to go according to the time schedule rather paying heavy price for the same. RERA gives full cover to the buyer and the developer has to apply caution in delivering the flat keys within the time frame work.
In order to escalate the responsibility and accountability towards consumers the RERA has mandated real estate developers register the project and obtain a valid registration number before proceeding. The developer is not permitted to market, advertise or sell the units before the registration of the project. If the project is to be developed in phases then the developer has to obtain registration for each phase separately. The developer is required to submit all the necessary documents related to the project as prescribed by RERA. It is mandatory for a real estate developer to open an escrow account in a bank recognised by the government and must deposit 70% of the total payment received from the consumer. They can withdraw the money and should solely use it for the development of the said project after getting it approved from an engineer, architect or chartered accountant. If the developer fails to comply with the directions or violates the rules prescribed by RERA or the Appellate Tribunal, they may face imprisonment up to three years with a fine of up to 10% of the total estimated cost of the project in question.
Established to protect the rights of property buyers and maintain transparency in the real estate sector, RERA failed to take action against some influential city developers, who has allegedly duped several buyers. RERA refused to help the buyers stating that the project has not been registered on their website because of which they cannot initiate action the erring developer. Under the RERA act, developers across the state were supposed to register their before the cut off date.
The year 2017 has been consumer friendly and the market is eyeing the festive season for better sales after a lull in the real estate market. The estate consultants feel that the real estate is on the path of revival with RERA providing the much needed confidence among the buyers and give the much required fillip to the builders as well. With RERA being introduced in three phases of the real estate the buyers look for a new trend in marketing of vacant flats in the city. The developers, the consumers and the consultants/agents are breathing a sigh of relief. The defaulters would be delisted from the segment and genuine developers and will have field day and consumers enjoy the full benefits in acquiring a flat in the heart of the city.
With the RERA regulatory body now in force, the realty sector is showing an upward trend. There are lots of inquiries in Thane Boribunder sector and it is a welcome sign. In all 2017 has made a good beginning and became consumer friendly as there is transparency in buying and the trend will continue for the rest of the year as well. But missing the deadlines will cost developer a bomb and the consumer will have a say from now on.
(The views expressed by the author in the article are his/her own.)