Property Registrations Under RERA Rise Across The Country

After 2 years since the onset of RERA, property registrations across the country have risen and buyers are coming forward in large numbers to seek relief from dubious builders.

Property registrations under RERA are increasing continuously. The registrations across the country have increased especially between November 2018 and April 2019. According to Anuj Puri, Chairman of ANAROCK Property Consultants, 307 projects have been registered under RERA in Andhra Pradesh. In November 2018, Andhra Pradesh RERA had recorded only 61 property registrations. Maharashtra leads with more than 20,718 projects registered and 19,699 RERA-registered real estate agents. In the southern state of Karnataka, 2,530 projects have been registered while 1,342 real estate agents have been registered under RERA.

Gujarat boasts of 5,317 RERA-registered projects and 899 registered agents and agencies. After two years since RERA was implemented, the property registrations across the country has been rising. The north-eastern states of Manipur, Meghalaya, Mizoram, Nagaland and Sikkim are soon going to notify RERA rules. The north-eastern states have been earlier reluctant to comply to RERA rules. However, these states are soon going to adopt RERA regulations to increase transparency across the sector. West Bengal has framed its own real estate law under the West Bengal Housing Industry Regulatory Authority (WBHIRA). As of now, 22 states and 6 Union Territories have already implemented RERA. 19 states have active online RERA portals while West Bengal has its own portal.

Anuj Puri said that each of the states with active portals have recorded a rise in project and agent registrations since November 2018. He noted that even while fretting about the dilution of the rules notified, buyers have been bestowing their faith in the law and coming forward in large number to lodge complaints against developers for various reasons including project delays.

MahaRERA has registered 6,631 complaints until April. According to the state authority, 64 percent of the complaints have been disposed. Also, there are cases of developers delaying payments and not attending hearings which need to be resolved. A huge number of consumers are registering complaints across the country which shows the increasing faith in the redressal system among buyers.


Gujarat second in number of works under RERA


Gujarat has left behind all other Indian states except Maharashtra in registration of projects under the new realty law — Real Estate (Regulation and Development) Act (RERA) — which had come into effect almost two years ago.

As many as 5,317 real estate projects have so far been registered with Gujarat’s real estate regulatory authority, the number being the second highest in India after Maharashtra, shows data compiled by ANAROCK Property Consultants. Apart from this, 889 real estate agents and agencies have registered themselves with the RERA authority in the state.

Maharashtra tops the list of states in RERA compliance with 20,718 registered realty projects and about 19,699 real estate agents. According ANAROCK, project and real estate agent registrations have been on the rise across most states from November 2018 to April 2019. Maharashtra leads the race followed by Gujarat.

“The compliance in Gujarat is very strong due to the laying of a well thought-out regulatory regime. There were technological and transitional issues, but the state regulator proactively provided handholding support to promoters and professionals,” said a real estate industry expert.

The credit should also go to the state’s realtors and professionals, said experts, for their willingness to adopt the new regime. Professionals swiftly understood the requirement of the regulator and guided the promoters in the right direction.

At present, 22 states and 6 Union territories have already notified their RERA rules, out of which 19 states have active online portals. West Bengal too has an active portal for its own real estate law.


Be more vigilant of developers’ escrow accounts: UP RERA asks banks


The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) said it has sent letters to the zonal heads of all 42 banks to be more vigilant of the escrow accounts of the promoters and developers.

A copy of the letter has also been sent to the director general of the Directorate of Institutional Finance, Government of Uttar Pradesh, UP RERA said in a statement.

The authority has asked banks for strict compliance of the provisions of Section-4 (2) (I) (D) of RERA Act, 2016, which warrants 70 per cent of amounts realised for real estate projects to be deposited in a separate account and to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for limited purposes.

UP RERA Chairman Rajive Kumar said, “It has come to the notice of the Authority that some of the promoters are not complying with the statutory provisions of the law and withdrawing the amount from the designated account without submitting the requisite certificate. This is grave violation of the mandatory provisions of the Act.”

UP RERA Secretary Abrar Ahmed said the separate accounts related to 2,651 projects registered in RERA are being maintained in 962 branches, some of them are based out of Uttar Pradesh. “We have sent separate individual letters to all the 962 branches by speed post.”

It has also come to the notice of the Authority that some of the banks, especially the ones that have sanctioned loan to the promoter, arbitrarily adjust the entire amount deposited in the account against the outstanding loan of the promoter instead of transferring 70 per cent of the money collected to the escrow account for the purposes of construction and payment of the cost of land of the project, the statement said.

“The banks are requested to issue necessary instructions to all of the regional managers, deputy general managers, assistant general managers (and) branch managers to strictly comply with the provisions,” Ahmed said.

It is further clarified that if the banks do not adhere to the provisions of the Act, the matter will be brought to the notice of the chairman of the respective banks and the secretary of the banking department of the Government of India for appropriate action in the matter.

In total, there are 42 scheduled commercial banks — 21 each public sector and private sector lenders.

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RERA Turns 2

It’s been two years since the deployment of the Real Estate Regulatory Authority (RERA) across India and the Centre’s aim of enforcing it in each state is gathering visible momentum. Even the north-eastern states including Manipur, Meghalaya, Mizoram, Nagaland, and Sikkim – which earlier shied away from it – have agreed to officially notify RERA rules soon. West Bengal is the only state which notified its own real estate law under West Bengal Housing Industry Regulatory Authority (WBHIRA).

Rohit Poddar, Joint Secretary, NAREDCO West and Managing Director, Poddar Housing and Development Ltd. states, “RERA has been a huge success in Maharashtra, the trust gap between the developer and the seller has largely been bridged. RERA has been very quick to address the issues of the developers and giving judgments on the conflicts between the buyer and developers. Reconciliation process through arbitration cell has become faster and convenient for the customers in case of delay in possession, which has consolidated the confidence of the buyers in the market. MahaRERA is the best RERA in India.”

It may be recalled that RERA intended to cover developers as well as real estate agents seamlessly across the country. As it stands now, 22 states and 6 Union Territories have already notified their RERA rules, out of which 19 states have active online portals. West Bengal too has an active portal for its own real estate law.

Manju Yagnik, Vice Chairperson, Nahar Group & Vice President NAREDCO (MAHARASHTRA) – “One of the biggest and most important action in the industry was implementation of RERA. The challenge of bringing it in the ambit of regulation has been a journey that is still progressive in nature as many questions still do not have the answer. However the real estate machinery has changed with this development.”

Things are changing for the better. Generally, players are far more accountable and cannot easily get away with breaking the RERA rules.

“There are ample amount of reasons to celebrate the second year anniversary of the much needed RERA, the implementation of which was envisaged to bring in transparency in the industry, has definitely achieved what it was set out for. Developers today are committed more than ever on the delivery of the projects; it has also brought discipline in the usage of funds. All in all RERA has brought in some positive changes amongst the industry, along with increased accountability, transparency and efficiency.” Rahul Grover, President Sales and Operations at Sai Estate Consultants.

Amit Ruparel, Managing Director, Ruparel Realty on RERA completing 2 years, shares “The Real Estate Regulation & Development Act (RERA) is a landmark legislation poised to catapult the sector into its next phase of growth, laid on the foundation of being transparent, competitive, hassle-free and consumer-centric, which certainly benefits corporate developers like us and most importantly the home buyers.”


RERA Act completing 2 years and its influence on the real estate industry

One of the biggest, and arguably the most called for, reforms in real estate industry in India was the implementation of RERA nearly 2 years ago. While the debate had been on for nearly a decade on regulating the highly opaque industry, the challenges of bringing it within the ambit of regulation were multi-fold. Let alone the reluctance on part of the key players, the overall machinery to manage the process was fraught with numerous challenges.

In the backdrop of a regime change at the centre in 2014, which placed its bets on ‘Housing for All’, among other things like urbanization-themed ‘Smart Cities Mission’, it became imperative for the industry to bring itself under the ambit of regulation. Moreover, it had long been understood that unless there was proper consumer protection and close monitoring of processes and practices, it was not possible for organised funding to take deeper positions in the industry.

Eventually, Real Estate (Regulation & Development) Act 2016 took shape paving the way for establishing regulators at the centre, and subsequently at all state levels. Undoubtedly, it is work-in-process, with the states currently placed across the spectrum of RERA implementation. On the one hand, Maharashtra and Madhya Pradesh have taken the lead and are markedly ahead, while Haryana and Bengal on the other, have still to catch up.

In the very brief history of RERA, it is worth taking a quick glimpse of what RERA has achieved by itself, and what its collateral impact has been.

A quick look at the rulings given by Maha RERA, arguably the most advanced state in implementing RERA, at the end of 2018, tells us that nearly 5,000 complaints were received and over 3,100 orders passed. Just till the end-2017, 79% rulings were in the favour of buyers. That should give us an estimate of the speed and the extent of buyer-protection that RERA offers. It is evident that as various states establish the authorities; and as these state authorities come to function at optimal efficiencies, real estate will be a radically transformed industry.

At the same time, it is imperative to check RERA’s collateral impact. We asses how prices – the best indication of the state of markets –behaved through implementation of RERA.

It is evident that while the prices had been in a steady decline between 2013 and 2016, the cycle turned negative in the period immediately following the implementation of RERA. Evidently, the sales dipped, and projects began to struggle to cope with the rigorous requirements of the now regulated industry. It is well-known that residential real estate creation was historically dependent on customer advances. As customers booked homes, the initial capital flowed in. Stage-wise payments from customers ensured that the construction process remained a customer-funded activity.

Often, in the absence of a transparent mechanism and due to lack of disclosure mechanisms, the payments thus received were deployed in other projects as well. One of the fundamental changes brought about by RERA was a halt to this practice of diversion of funds to other projects or land purchases. 75% of the funding received for a certain project, was to be deposited in escrow and full disclosures were required. This did create a grind for the developers, who could no more use customer advances for any activity other than what it was meant for.

It should be remembered that this period of negative growth in prices coincides with, and is closely linked to, some other remarkable events, namely, demonetisation, temporary ban on construction in Mumbai, implementation of GST, and a little later, the liquidity crisis of 2018. All of these, along with RERA, contributed to the slowdown in the industry, leading to falling sales every successive half-year as well as negative price growth. GST implementation, the other structural change apart from RERA, can be said to have contributed significantly to the ways of doing business in residential real estate.

The downward movement in prices has been increasingly arrested in 2018 and continues along the upward path. It can be understood that while the flurry of reforms and various policy measures sent successive shock-waves in the real estate industry, the eventual acceptance of the new reality is sinking in. The supply side has clearly begun learning the dynamics of this ‘changed’ environment, and has been redrawing its business models.

In the years pre-dating RERA, customer grievances were addressed in the courts, for which buyers were usually neither capable nor had the sustenance for long-drawn cases. RERA has definitely eased life for them. But, this is just one part of the benefit. People do not buy houses to fight cases. Homes are for living and usually bought once in a lifetime, with the savings of a lifetime. Such a purchase needs greater scrutiny as well as protection.

The greatest protection for demand side comes in the form of much higher transparency and an assurance on proper deployment of funds by builders. Similarly, alterations to promised layouts or designs are not possible anymore, at least under normal circumstances. RERA seeks to establish information symmetry, and as it is implemented across the country, we should have a market which is open to scrutiny and is transparent.

It has been vigorously argued on numerous platforms whether these changes, of which RERA happened to be the first link in the chain, have been worth the pain. However, it is evident that RERA is the need of the hour and is here to stay. The two years since it was born, have been turbulent, arguably making it look bigger than it is. There is little doubt, nonetheless, that it has altered an industry that was often opaque at best, or, notoriously oblivious to customer interests at worst.


Home buyers to pay in accordance with a project’s progress: MP-RERA


Government boards and authorities involved in housing projects cannot charge money from buyers in a fixed date linked schedule — a practice common in Madhya Pradesh till now. Boards and authorities will now charge money on the basis of the completion stages of a project or in construction-linked payment module.

After coming across several complaints related to housing projects by government organisations, the Real Estate Regulatory Authority (RERA) observed that the money charged by government agencies was not connected with the actual construction while, ideally, people should be asked to pay in accordance with the progress of a project, RERA observed.

RERA has requested the state government to correct its price charging structure after which the government recently issued circular to all boards and authorities to do the needful.

So far, irrespective of a project that has started or been completed, the government boards and authorities would charge money in a fixed slot of three-month, six-month and on yearly instalments. The buyers would be fined if they do not pay the instalment on the fixed date.

Government boards and corporations often roll out major real estate projects in a city. In Bhopal, the most prestigious housing projects are of the housing board and Bhopal Development Authority.

RERA chairman Antony de Sa said a government agency — be it a board or authority — can charge money in a dated schedule only if the project is complete. But if a project has been announced or is an on-going one, the money demanded from buyers has to be linked with construction, he added.

RERA has received around 40 complaints with regard to impractical payment structures by the government agencies. Housing projects by government agencies would also have to mention delivery date. It is not mentioned in the projects yet.

Similarly, the government agencies would also not be able to do cost escalation of land in a project on a yearly basis. It would be restricted only till the due date of project completion.

If a property was due for completion in the year 2015, the agencies, in case of delay, cannot charge yearly cost escalation on land, the officials added.

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MahaRERA releases SOP to remove delaying developers


The Maharashtra Real Estate Regulatory Authority (MahaRERA) on Thursday issued a standard operating procedure (SOP) to allow homebuyers to remove a developer in case the project was delayed. The project would then be handed over to an expert panel for completion.

The authority, however, clarified that it could initiate such action only against non-litigated projects.

“It will help complete all delayed projects in the state. This is an unique move, probably the first in the country, under the Real Estate Regulatory Act, 2016, which will help the association of allottees (homebuyers) take control of the situation,’’ Vasant Prabhu, MahaRERA secretary, told TOI.

In case of revocation orders, the developer will lose rights to the project and his bank accounts will stay frozen, the order said, adding that the authority would then set up a panel of experts to prepare a project report within four months to decide on future course of action.

The panel would prepare a blueprint for project completion. The blueprint would consist financial details and a detailed roadmap towards arranging the said finances.

The SOP has been issued under section 37 of the RERA Act, 2016, with reference to sections 7 and 8. MahaRERA officials said the authority will only consider complaints received from an association of allottees and not from single homebuyers for such action. “The complainants should not be less than 51% of the total allottees,” they said.

MahaRERA will serve a notice to the promoter with 30-day deadline to present his/her case.

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Nila Mohanan holds interim Goa-RERA charge


With the transfer of bureaucrat Sudhir Mahajan to Andaman and Nicobar Islands, the post of the interim Real Estate Regulatory Authority has fallen vacant.

The government has issued an order stating the secretary of urban development will officiate as the regulatory authority, however, Goa lacks a full time urban development secretary, too.

IAS officer Nila Mohanan has been given charge as urban development secretary as an interim measure along with her full time assignments as secretary education and secretary revenue.

“Government of Goa hereby designates the secretary urban development as the regulatory authority for the purpose. This order shall come into force with immediate effect,” director and additional secretary for municipal administration R Menaka said in the official order.

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Incomplete projects in Indore & Bhopal get MP-RERA breather


Over a dozen real estate projects led by Indore and Bhopal have sought extension from MP Real Estate Regulatory Authority (RERA) after they failed to complete project as per proposed deadline at the time of registration.

At the time of registration of project under RERA, promoters have to propose deadline for completing the project and if deadline is breached, promoter has to take extension from the authority or else the project will fall in illegal category.

RERA chairman Anthony De Sa said, “There are over a dozen projects that have asked for extension. Extensions are being granted so that they do not become illegal projects. In case of illegal the project will be of no use to the allottee and the builder.”

The authority is giving extensions after promoter pays a certain fee and project remains under regular monitoring. De sa said extensions are given with mandatory condition that it does not any way affect right of allotee and they get compensation for delay.

According to Rera, extensions can be given for a maximum one year in phased manner while under certain circumstances considering interest of allottees, extensions can be above a year.

Recently at a hearing in Indore, an Indore based commercial project costing around Rs 13 crore has been granted an extension of 3 months over an year.

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MR Kamble appointed as Chairman of Karnataka RERA


The Real Estate Regulatory Authority (RERA) of Karnataka has finally appointed M R Kamble, a retired IAS officer, as the chairman.

The authority that was notified on July 10, 2017 has seen four interim chiefs since inception.

Karnataka Real Estate Regulatory Authority constituted a 3-member team to appoint the chairman of the RERA authority apart from setting up a tribunal with a High Court judge as part of it. The housing department received nearly 60 applications for the top post.

The K-RERA has appointed the chairman and the prayers of home buyers have been listened. Hoping the RERA functions to bring desired relief to the homebuyers, ” said MS Shankar, secretary, Forum for People’s Collective Efforts.

However, the government is yet to notify model sales agreement as per central government rules and RERA appellate tribunal members. “The appellate tribunal appointment has been with held for now,” said Shankar.

“We had submitted request to the government to reconsider the transfer of RERA secretary K S Latha kumari for the smooth transition,” said Shankar.

The Karnataka government notified Karnataka Real Estate (Regulation and Development) Rules-2017 in the state gazette in July last year with the setting up of Karnataka RERA.

The law was passed by Parliament in March 2016 to address the woes of millions of homebuyers and to ensure better governance in a sector that was hitherto unregulated. According to the RERA registration, Maharashtra has the highest share of registered projects under RERA, followed by Uttar Pradesh, Gujarat, Karnataka and Madhya Pradesh.

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