Homebuyers’ satisfaction index low after seven years of RERA

As RERA (Real Estate Regulatory Authority) is close to its seven years of completion, homebuyers across the nation have more to complain than compliment with what was supposed to be a gamechanger law.

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Findings of a pan-India survey by Track2Realty, a real estate think-tank group, show most homebuyers across India’s top-10 cities point out that the ground realities have not changed for them. A vast majority feels it has opened another window of litigation and hurts buyers. They face issues that range from lack of transparency to accountability and existing market realities to consumer interface.

The survey delved deeper into the consumer psychograph to understand whether the RERA has eased their pains in the housing market. It was conducted across Delhi, Noida-Greater, Noida, Gurugram, Mumbai, Pune, Ahmedabad, Kolkata, Bengaluru, Chennai, and Hyderabad.

Homebuyers feel RERA registered projects not giving them informed choices

According to the survey, the satisfaction index of homebuyers with RERA is as low as 26% with more than seven of 10 having not-so-satisfactory experience in the Indian housing market after the enactment of the legislation. On the question of transparency, 70% homebuyers feel RERA registered projects are not giving them more informed choices than under-construction projects of pre-RERA days.

Another survey suggests similar sentiments

Another survey by Zee Business suggests similar sentiments. In Zee Business survey, 60% buyers maintain builders’ false promises is still a market reality. At least 78% buyers are dismissive about the timely justice under RERA regime. Only 48% buyers say projects are now being delivered on time. About 55% buyers are of the opinion that transparency has not improved. More than half, 52% to be precise, crib that builders still are in commanding position to dictate terms.

Time and cost of litigation has shot up

Track2Realty survey findings are gloomier. Time and cost of litigation has shot up for no less than nearly eight of 10 buyers, with 78% confirming to be so. RERA giving extension to housing projects baffles as many as 88% buyers. Execution of RERA orders against the builders are a pain point for nearly all, with no less than 90% buyers maintained so.

At least 92% homebuyers question the absence of uniform Builder Buyer Agreement (BBA). A vast majority of 78% buyers have been handed over BBA after having made the initial payment. Cancellation of booking, in the event of unfair BBA, is loaded in favour of the builder with 84% saying builders demand 10-20% amount of the sales consideration (and not just payment made) to forfeit.

“I think RERA is just another window of time-consuming litigation, which benefits the builder. Legalities apart, where RERA fails to serve its basic purpose is to tame the builders who continue to throw unfair contracts in the face of buyers. First, they give you BBA only after making the advance payment in the name of booking amount; then you find that the contract is arbitrary; if you question it then your booking amount is forfeited. I mean if RERA can’t take pre-emptive action, then we as middle-class homebuyers don’t have the might to get into lengthy and costly litigation. RERA is not a one-point litigation point,” says Raghav Verma, Greater Noida.

RERA often too late in the event of builders’ malpractices

RERA was supposed to put an end to the unfair market practices. But the watchdog rarely takes pre-emptive action and is often too late in the event of builders’ malpractices. About 80% expect RERA to take suo moto cognizance when builders start pre-launch sales. At least 86% complain builders are still advertising and selling Super Built-Up Area and not Carpet Area.

The survey noted that the consumer disappointment with RERA is maximum in Noida-Greater Noida market with 92% buyers disappointed. Disappointment with RERA is reported least in Ahmedabad where only 32% buyers maintain that RERA is ineffective to solve problems.

“If I have to run from pillar to post to get justice with RERA, and then wait endlessly for its order to be executed, then how does RERA find homebuyers’ solution points? The fact is that RERA orders are not executed by the respective District Magistrates for years. And even if it is executed, the builder drags the buyers in further litigation. My question is what RERA has done to either make the housing market transparent or instil confidence in homebuyers,” asks Ratna Suri, Gurugram.

RERA perceived to be adopting a soft approach towards builders

What could be a matter of concern for the RERA members across the country is the fact that it is perceived to be adopting a soft approach towards builders. About seven of 10, as many as 68%, categorically say RERA has not been stringent with the erring builders. There is a perception that in the name of giving a level playing field to both the parties, RERA rarely pass orders as harsh as consumer courts and levies only nominal penalty of MCLR (Marginal Cost of Lending Rate) plus one per cent.

RERA elevated standards of transparency and accountability

Within the realm of organised and branded developers, the feeling is that of optimism. After all, they are ones who have set the best practices in the business. Abhishek Kapoor, Group CEO, Puravankara Limited, maintains that RERA completing seven years marks a significant milestone in the real estate sector, underscoring its effectiveness in bringing about tangible changes on the ground. This landmark legislation has not only revolutionised the way business is conducted but has also elevated standards of transparency and accountability.

“RERA has instilled a culture of compliance and integrity for developers, fostering trust and confidence among homebuyers. Buyers now have the assurance of timely delivery, quality construction, and recourse in case of grievances. Reflecting these seven years, we recognise RERA’s pivotal role in reshaping the industry, ultimately creating a win-win scenario for all stakeholders,” says Kapoor.

How long it will take for RERA to make its presence felt to homebuyers?

It could be debated as to what extent RERA has led to a better ecosystem in the Indian housing market. Of course, the story is different among the large and listed players. But the public perception at large is borne out of their experiences with developers, against whom RERA as a legislation has not been effective. The larger question is how long it will take for RERA to make its presence felt to homebuyers who are suffering and looking for a one-point effective and judicious remedy.

Survey highlights

74% buyers complain ground realities for buyers
70% feel market has not improved on transparency level
78% maintain no timely justice
88% buyers baffled with RERA extension to housing project completion
90% hurt with RERA orders not being executed
92% buyers demand Uniform Builder Buyer Agreement
88% buyers get to see BBA after having made payment
84% crib booking cancellation to be arbitrary
80% point out existing reality of pre-launches
86% question why RERA is not enforcing sales only on Carpet Area
80% expect RERA to take suo moto cognizance against malpractices
68% feel RERA adopts soft approach with builders
92% disappointed with RERA maximum in Noida-Greater and Noida region and are not satisfied
Only 32% buyers call RERA ineffective in Ahmedabad

( The author is CEO and Managing Editor at Track2Media Research.)

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Ravi Sinha

Ravi Sinha is a journalist with nearly two decades of cross-discipline media exposure. He is the CEO of real estate think-tank group Track2Realty. He has been writing extensively on the real estate sector for nearly a decade. Evaluation of real estate brand performance is his expertise and he has immense insight into consumers’ psychograph in the property market.

Twitter: https://twitter.com/ravitrack2media