Government accountability needed to meet RERA objectives

The Real Estate Regulatory Authority (RERA) Bill, which was passed earlier this year, and introduced rules to protect the interests of customers, gave home buyers a reason to rejoice. 

However, the developer community, while welcoming the Bill has raised concerns over the seeming exclusion of government agencies in matters of accountability.

The RERA Bill has set in place rules that prevent developers from conducting pre-launch and pre-selling activities unless all approvals and documentation are in place. While such stringent norms help remove fly- by- night operators from the market place, a few pressing issues concerning the non-inclusion of government agencies under the Bill have come to the fore. 

T Chitty Babu, Chairman and Managing Director of Akshaya Pvt Ltd says, “On the one hand, the Bill is a game- changer for the industry, stakeholders, customers, bankers, funding institutions, landlords and for developers. Apart from bringing in a lot more transparency into the industry, the Bill will also create a level playing field for the businesses involved.” 

Explaining further, he says, “The only element that hasn’t come together in the Bill is the government authorities and agencies. Their role is instrumental. It is upsetting that the regulatory Bill has not captured the essence, which is providing approvals or service commissions for any project. When you assure customers that a project will be completed within a certain deadline, we might start on a certain date, but we may not be in a position to hand over the building on the agreed date. The reason is that we need the electrical connection, Metrowater and drainage connection, gas supply, and other infrastructural needs which has to be fulfilled by the government.” 

He goes on to say, “In the absence of government accountability, developers will have to work in such a way that they do not commit to providing infrastructure dependent services as part of the contract, i.e. deliver a product without these amenities. Developers cannot be made accountable for facilities that need to be provided by the government itself. The corruption level could multiply tenfold in such cases. Customers need to insist that government agencies also become part of themechanism as it’s their money that is at stake.” 

Others believe that developers might have to cough up more cash to keep businesses going as RERA goes live. 

Ajit Chordia, MD, Olympia Group, says, “The RERA Bill will lead the market into becoming much more transparent. It will be good for customers and developers also. We will comply with all the rules in the larger interest of the industry. Developers will also change the way in which they are working. There will certainly be a marginal increase in cost on account of RERA compliance.” 

He adds, “RERA will definitely result in increase in price because projects cannot be launched at will and non-serious players cannot enter the picture. This will cause the supply to come down, and that itself will cause prices to go up.  Once the regulator comes in, issues like undue delays in issuance of completion certificates for the developers, can approach the body to expedite the clearance. Our major concern is that the sanctioning bodies have not been brought under the regulator with respect to timeline and stringent compliance parameters, as specified for developers.”