Regulating real estate

For an average homebuyer, coughing up huge amounts of money is the major component of the gruelling process, but other worries loom large. Project delays, cost overruns, faulty construction, lack of information, a defective land title or maintenance after the handover are all real concerns. Realising the full potential of the Real Estate (Regulation and Development) Act, 2016, and the consequent setting up of the Real Estate Regulatory Authority (RERA) may still be a work in progress, but the governance structure has resulted in significant changes. The customer has been empowered, the builder regulated. The directions by the Haryana RERA for a complete refund for a Faridabad flat along with a huge amount as interest restore confidence in the regulatory mechanism. The complainant claimed she was not provided valid possession in a high-rise residential society within the stipulated time.

A marked improvement has been noted in the execution of residential projects in top cities after RERA was set up. From an average delay of 20 to 48 months, the gap has been reduced to 10-18 months. Better timelines are also a result of the mandated checks on utilisation of customer advances and construction-linked payment schedules in sale agreements. More customers are now willing to invest in projects under construction, especially from developers with established track records. Studies show that awareness of RERA is limited to the mandatory registration of projects and as a grievance redressal forum. A publicity pitch is required for various other benefits, such as the provision that developers cannot make alterations to the agreed project plan without approval from the buyers.

The regulatory authority has emerged as the forum of choice, but extended complaint resolution is a cause of dissatisfaction. Improved websites would assist both consumers and developers. The implementation of the legislation across states is varied, leading to large differentials in performance with respect to registrations and grievance redressal. Uniformity would ensure better compliance.