Regulator Cannot Penalize Builders of Property in India For Pre RERA Era Delay

With respect to best property in India, over the past week no news story has garnered as much attention as has news concerning the Real Estate Regulatory Act (RERA). The RERA is expected to be a game changer and it is believed by most that once it is fully complied with, buying and selling real estate in India will become easier and far more transparent. For India's real estate sector to grow and to attract investment from within India and investment from overseas investors, it needs to become regulated by a powerful act such as the RERA. 

The Hope Vs Reality

It may be hoped by many buyers who received their completed units after years of delay before the RERA was enacted that they may be able to earn the attractive rate of interest on money that home buyers are eligible to earn on delayed projects today after RERA has become the law of the land. Yet this is not possible as under the RERA only those projects that are registered with RERA may be taken action upon by the regulator. Projects that are not registered with the RERA cannot be acted upon by the regulator.

The real estate authority will not be able to penalize builders on delays on the builders projects that had already been completed before May 1 2017. The RERA for different states can only penalize projects after such projects are registered with the RERA and subsequent to which the builder defaults on the agreed upon completion timeline.

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About Completion Times

The Chairman RERA and former Chief Secretary of Madhya Pradesh has stated that the authorities would decide the completion timeline of on-going projects. As such on-going projects are registered with the authorities, their timelines shall be decided on a case to case basis. The additional secretary housing urban development stated that the RERA can only function under rules that have been specified and cannot exceed such preestablished rules. Hence according to the best property site in India, ongoing projects will be registered with the RERA which will then provide such projects with an appropriate completion timeline. 

A Suitable Recourse to Home Buyers

Thus homebuyers will have an option to reach out to courts of law to resolve their genuine complaints and in appropriate cases they may even approach the RERA Regulator, however the Regulator cannot take action against builders who created delays on earlier projects. 

Conclusion

The RERA is an elegant, fair, and balanced act which does a delicate balancing act keeping in mind the best interest of seemingly opposed builders and buyers. Builders who follow the letter of the law have very little to fear from the Regulator while buyers who venture to buy property have the added confidence of knowing that their best interest in being kept in mind by the Regulator.

How and Why Affordable Housing is Becoming Need of the Hour?

Since the past ten years, India has become a hub for housing projects in different sectors. This includes luxury apartments, mid-segment housing, upper mid-house segment and many more. While a lot of people are interested in investing money in high-end properties, a larger section of buyers is still eyeing the mid-income or commonly known as ‘affordable housing’. Since, the demand is high for such projects, supply has become rather pale. Builders these days are concentrating more on planning out projects that fetch them more money with little efforts. However, due to this notion, investors who are interested in buying affordable properties in India are left with the scarcity of it.

There are a few parameters that define affordable housing in India clearly. Some of them are as follows:

Basic Amenities

Provisions of basic amenities such as clean drinking water, adequate supply of water, sanitation, etc., are necessary in any housing/commercial property. There are a lot of builders these days that are promoting these facilities in their upcoming projects but are not able to deliver them after possession of properties by buyers. Hence, before finalizing a single developer, it is very crucial to take note of the services being offered by them.

Cost of Property

One of the most note-worthy thing before buying an India property is the obviously the cost associated with it. At the time of assessing property prices, it also becomes important to keep track of the costs you are going to bear after actually buying and maintaining that place. The key to build any housing project is to use sustainable and low-key maintenance features that do not require regular attention of both buyers and developers.

Property Location

Affordable housing in India also means finding a perfect location with almost all of the facilities that a buyer’s dreams of. One of the most imperative aspects of affordable housing project is to build it in a location that is directly linked to daily transport facilities and other basic locations. If the location is far away from workplace, it becomes rather difficult for people to commute to work on a daily basis. Therefore, if a person is buying affordable housing there should not be pricey transportation associated with it.

Apart from the aforementioned features of affordable housing, builders should also take in account the income of buyers. There is a common notion that with an increase in incomes, affordability of properties also grows, but it is not true in each and every example. On top of it, various regulatory and urbanization issues keep pouring in for developers. There is already a huge demand in land space in urban India and with such drastic increase developers have to find a way to introduce a simple of building affordable housing in India.

In today’s times, whenever a builder announces new projects, they instantly have to get government approval along with all the facilities for the future residents of the house. With such implication, it becomes difficult for them to keep track of mere necessities. Thus, with the demand of luxury properties in India, affordable housing is also making its way amongst various hurdles and regulations.

Real Estate Bazaar of India: Then and Now

The real estate market of India has evolved in the recent years and continues to show a sharp growth in this year as well. However, what many of us don’t know is that this scenario was completely different till the time we hit the 2000s. A lot of modifications in the realty sector took place in between and that’s what define it the best. A concept, which started out as an experiment, became everyone’s necessity these days. Whether it is a India property or a residential one, people cannot imagine their life without a proper shelter.

The highs and lows of Real Estate in India

The era of real estate became more significant when we moved on after the year 2010. This was the time it became evident that this segment is here to stay with buyers jumping on to great deals and a place they can call their own. In 2005, prior to the time foreign direct investment (FDI) made its entry, the real estate projects were largely funded by cash flows, private lending and banks. This was also the year that FDI grew significantly as the Indian markets were opening up to global investors to yield better results and funds.

It is also said that post the global financial crisis of 2008, there was a sudden change in the nature of how real estate market was being perceived. This was the time when banks became highly cautious about lending money to the buyers, which ultimately proved out to be a lost cause for developers all over the country. Bank loans to the real estate sector marginally decreased and there was nothing much a developer could do to bounce back in the market.

Moving on, it took some time for the companies to bear the loss of financial crisis and plan out their next strategies to tackle the situation. It was indeed in the beginning of 2010 that the urban sector in real estate started gaining momentum and became one of the highest selling sectors. By that time it was quite evident that the growth of real estate market in India is not just restricted to small towns and cities, but is spread out at every possible location.

Vision for the future

In order to unlock the potential of real estate market, government of India has stepped up and taken a few initiatives. Several packages with new laws have been introduced for certain decisions and to justify the need of rules and regulations in this sector as well. The retail space demand along with the residential areas has become the talk of the town. Rising income levels and decreasing family sizes have made real estate sector one of the most demanding ones.

It is quite a challenge to establish a real estate project in India. Fluctuation in prices with the ever-changing demands has compelled builders to reconsider their decision of offering properties at the right time. The commercial and real estate segment has already recovered from a bump in the road in 2008-09. With these never ending challenges and government initiatives, here’s to hoping that the real estate sector is hereby progressive.