While the implementation of RERA has been below target, it has indeed seen positive steps forward. The achievements of the past year should be seen in the light of the fact that previously, there were no regulations for the sector. RERA brought about a paradigm shift in the real estate landscape of the country. We all hoped that it would be enforced within time limit set by the government, but it would have been an uphill task to enforce it in a short window of a few months. However, the commitment from the various state authorities look promising. We believe that RERA will come to force across the country soon. Predictably in the next 12- 18 months, all the States and Union Territories should be able to establish respective permanent regulator. One of the aspects that the central government should to do to make RERA impactful is align the Insolvency and Bankruptcy Code to it, creating a proper option for exit for development companies.
On the first anniversary of RERA, the implementation across states is nowhere close to its goal. As of April 2018, only 19 States and Union Territories have online portal in place and 5 States and Union Territories have a permanent real estate regulatory authority. So far 27,000 projects are registered under various state RERA, while 17,000 agents are registered under RERA.
The primary objective of RERA was to ensure that an end – user of real estate is better protected by bringing in transparency into the sector. Buyers have welcomed RERA as it protects their purchase in real estate by providing a dedicated tribunal for addressing their concerns. Buyers have also appreciated the sense of empowerment it brings as the information asymmetry is reduced helping buyers in taking appropriate decisions. RERA has been welcomed by developers in most cases as this being a straight forward ruling, adherence has been high. Further, it has ensured that developers complete the due process as required by the law before launching their projects.
Going forward, RERA will create the much-needed transparency in the real estate sector. A well-governed and transparent system will allow the sector to grow and contribute positively towards economic growth. This will also allow the real estate sector to attract investments from institutions. The implementation of RERA would be good for the banking sector helping them evaluate projects prior to extending loans and mortgages. For home buyers, it will ensure that their capital in real estate is protected and that they receive the product they have paid for. All of this will increase the overall market confidence and eventually sales velocity in the sector.
Of the various states where RERA has been implemented, Maharashtra has shown good results. Maharashtra has recorded the highest number of registered projects estimated to be 16,000. MahaRERA has been active in redressing customer complaints and queries. MahaRERA has empowered and protected consumers and at the same time has given comfort to developers for being fair to all. It has also helped settling of disputes mutually between parties thus showing the way to other RERAs about being practical and proactive. Icing on the cake will be introduction of a single-window clearance or taking steps to address the time spent in seeking approvals from the Local Corporation and government agencies.