PANAJI: The Real Estate Regulatory Authority (RERA), though a challenge for the industry, would help develop and streamline the real estate industry while also weeding out small builders. In a bid to allay fears, experts said that the entry of a regulator is beneficial, a point that Goan real estate developers disagreed upon.
Speaking at an interactive session organized by the Goa Chamber of Commerce and Industry (GCCI), Sudip Mullick and Amit Wadhwani, partner and principle associate respectively at Khaitan & Co, said that the real estate sector had no cause to be threatened by RERA, which was notified and effective across the country from Sunday.
“Whenever a regulator has come in, the sector has developed. There are a few challenges, but over time and with practice, these will smoothen out,” Mullick said.
Some of the few challenges outlined by Mullick left quite a few developers and real estate agents squirming. “A builder can sell only the carpet area, but stamp duty has to be paid on saleable area,” he said.
The senior advocate, however, voiced his concern over the Real Estate (Regulation and Development) Act, 2016, which states that in the event of a builder failing to deliver a property by the deadline, he is liable to pay interest and compensation to the purchaser. “It is baffling to have an interest component and a compensation component… the Act doesn’t define how compensation will be calculated,” the partner at Khaitan & Co said.
Confusion also abounds on how existing projects, which also come under the ambit of the Act, will comply with the stringent norms. Builders also slammed the Act for having failed to put sufficient onus on the government authorities that delay necessary permissions. “The biggest obstacle is the grant of approval process. If approvals come fast then it is helpful but the approval authorities are not within the ambit of the Act,” Mullick said.
“There will be a huge cost push. The cost will go up significantly. There is going to be an increase in prices but the customer will get a better project. It will create a level playing field My fear is that the end user will have to pay more,” founder president of the Confederation of Real Estate Developers’ Associations of India Gera, Kumar Gera, said.
Credits ET Realty