Buyers in Indian real estate sector have numerous stories to tell on builder irregularities, delayed projects, cheating, poor construction quality and so on. As per industry reports, more than half of housing projects across the country fall in ‘delayed’ category. When taken to task by courts for delay in handing over the property to home buyers, some builders have been affront in saying that they have no money to pay to the buyers!
The Real Estate (Regulation and Development) Bill, 2016, which was passed by Rajya Sabha on March 10 and by Lok Sabha on March 15, has already have 69 of the total 92 sections of the Act in force from May 1, 2016. The Act is likely to expose not just big players. The opaque practices of smaller and unlisted players, who comprise the greater landscape of the realty sector will also come under the scanner. We can expect some discipline among builders regarding promises made while selling the project, executing and even handing over the project.
There are many instances, when builders have handed over the property to buyers under pressure even without obtaining the Occupancy Certificate from the local authority. The Act promises major reform in the commercial as well as residential sector, and ensures timely completion and handover of those. It will also be required to dispose of complaints within 60 days. While the ills in the sector may have been starkly outlined by the Act, builders have also brought forth the concerns falling their way from the government quarters. The Builders Association of India have sought a time-bound system of granting permission to projects by government agencies and has called for making the authorities also fall under the purview of the Act.
The builders would like to have a single window clearance system, exemption of the ongoing projects from the Act, as well as abrogation of the clause for imprisonment. The Builders Association of India (BAI) has also urged the Union government to form a Cement Regulatory Authority to prevent cartelisation in the cement industry, and has sought for addressing numerous issues that add to the delay in completion and handing over of a project.
So, notification of the Real Estate Regulation and Development Act would be just a beginning towards cleaning up the realty sector. And it is not just builders who have to set their record straight. Even the authorities have to become party to meeting the deadlines.