With RERA set to become a reality soon, developers are leaving no stone unturned to ensure they comply with the demands of the Act. We have the details…
Is now the right time to buy your dream home? This question gets being asked over and over again. And ex perts believe that with RERA soon becoming a reality, it is indeed the apt time to take the plunge.Ameet Hariani, managing partner, Hariani & Co, explains, “The Real Estate (Regulation and Development) Act, 2016 (RERA), is slated to come into force in May 2017. Once RERA is in force, every developer developing a project for sale in the planning stage, will be required to comply with it. RERA applies to both, new projects and ongoing projects, for which a completion certificate has not been granted, provided the project involves the sale of plots, apartments or buildings. Compliance with RERA is not optional. Any failure to comply with the terms of RERA, could lead to significant penalties for developers, as well as individuals who are directors or partners involved in the day-to-day operations of the developercompany. The penalties imposed under RERA are not to be ignored they could extend upto 5 to 10 per cent of the cost of the project being developed. So, all developers working on projects or planning to work on projects, falling within the scope of RERA, will need to ensure strict compliance with the provisions of the Act.“
Developers will need to ensure and get the lengthy requirements under RERA in terms of paperwork, permissions from all authorities, financial details and projectrelated information such as project size, amenities, phases, time lines and the projected completion date. “Though the emphasis on various requirements will vary from state to state, their core will remain the same. For example, in Maharashtra’s RERA, a lot of emphasis is laid upon the land details i.e. ownership, development agreements, clearances, etc, while other states will not have the same emphasis but would still require the land details to be submitted. Once all these elements, as defined by the Act, are collated and compiled by the developer, complete RERA compliance would be possible.This will require a lot of manpower and working hours, with experts brought in to understand the nuances of the Act in the beginning and later on to ensure compliance for all projects,“ suggests Mayur Shah, CREDAI banking and finance, committee chairman.
The passage of RERA has and will go a long way towards improving the perception that the real estate sector is finally regulated adequately to cover the interests of all stakeholders and most importantly, the customers. It sets the stage for a uniform regulatory landscape based on transparency and governance, which can certainly be capitalised upon by a serious developer to showcase his business. Rajesh Krishnan, MD and CEO, Brick Eagle points out, “Following are some of the requirements necessary for RERA-compliance:
Developers shall be responsible for and ensure the registration of their projects with the regula tor (as and when it becomes operational);
Maintenance of a separate proj ect account with a 70 per cent float to be released as per the percentage completion of the project (including payments to wards land);
Documentation and agreements to be based on basic formats rec ommended by the RERA rules;
Requirement of consents from all affected customers allottees in case of any change in project plans;
No advertisements before the registration of the project with the regulator;
All advertisements to be correct and realistic;
All relevant and necessary ap provals to be disclosed and put up on the Regulator’s website;
Disclosure of carpet area of the units in the project.“
RERA, WHY NOW?
Although RERA allows a grace period of three months during which ongoing projects can be registered with the authority, no new units in such projects can be sold during this three-month period until the registration.
“It will be mandatory to register the ongoing projects with the regulator within three months from the date of commencement of the Real Estate (Regulation and Development) Act 2016. As a part of this registration process, details of all projects launched by a developer in the last five years, requisite approvals, sanctioned plans, allotment letters, agreements for sale and conveyance deeds proposed to be signed with the allottee, along with the names and addresses of contractors, architects and structural engineers, are required to be shared. It is therefore advisable to begin the preparatory process as early as possible, to ensure timely compliance,“ says Sunil Sharma, VP marketing and CRM, Mahindra Lifespaces.
PREPARATION FOR RERA-COMPLIANCE:
The essence of RERA is to ensure accountability for real estate projects. It does so by ensuring that all the necessary documents, permissions, certificates and information, are collated and made available at a single source, which can be accessed by potential and existing consumers. “This Act will ensure that developers are more accountable to their buyers. Developers will earn goodwill, thereby enhancing their reputation. Another pressing issue of a lack of transparency will get resolved by restoring the faith of the buyers back into the industry.However, established corporates will not be greatly impacted by the Act as this has been a standard practice for them and those developers have always been fair to their valuable customers,“ concludes Girish Shah, director, The Wadhwa Group.