Real Estate Act will boost the industry’s credibility

In an exclusive interview with Housing News, Boman Irani, secretary of the Confederation of Real Estate Developers’ Associations of India (CREDAI), explains that regulatory changes, such as the passing of the Real Estate Act, the GST and other reforms, will resolve a major grievance plaguing the sector – that it is unorganised and unregulated. Addressing this major concern, is bound to benefit home buyers.

 

Q: The Real Estate (Regulation and Development) Act has been enacted. In the next 15 months, it will be implemented across states. In this changing scenario, how do you see the development firms gearing up? What hurdles do you foresee?

A: The idea behind the Real Estate Regulation Act (RERA), is that it will protect buyers and put in place a process that will benefit the entire industry, in the long run. Implementation of the RERA, will bring much needed clarity and transparency to the sector. Consequently, developers will largely welcome this move, as it will build credibility and go a long way in establishing a relationship of trust with the customers. The industry looks forward to this transition and we hope that the implementation, which holds the key, is undertaken properly. All CREDAI developers are being issued advisories and compliances that will be needed in the future.

 

Q: What other challenges do you foresee, vis-à-vis the implementation of the RERA?

A: The act mandates uploading of proposals onto an online system. As the number of proposals is likely to be huge, this will require large-scale infrastructure, especially in IT and will increase the pressure on the system. Considering this, it would be better, if only the new proposals are mandated to be uploaded and brought under the RERA’s purview.

See also: The Real Estate Act comes into force from 1st May 2016

 

Q: From the perspective of a development firm, what changes do you anticipate when RERA is fully functional?

A: At CREDAI, we have repeatedly issued internal directives that are already in line with the basic objectives of the act. On the other hand, developers who haven’t been following or serving the interest of the consumers, will now have to take into consideration the impact of the new governing body and the related regulations that will follow.

 

Q: Will the RERA bring order in transactions and more transparency in the market?

A: Over time, the RERA should bring greater transparency in the sector. The fact that all permissions, statuses and certificates, will be available in the public domain may help. At the same time, government bodies should also accept that they have a very important responsibility and are accountable for their part in the process. Only when approvals are granted in a time-bound manner and the authorities are equally transparent about their processes, will we see the necessary transparency in the sector.

 

Q: What about consumer activism? Will the number of litigations against developers come down, in the longer run?

A: All genuine consumer activism helps in reforming the sector and to understand the consumers’ perspective. However, there have been numerous complaints filed against developers, where the law is followed in letter and not in spirit. A good developer will be burdened by litigations and it is not good for the customer as well. The number of such cases, is likely to reduce though in the long run, due to the parameters laid down in the RERA.

 

Q: How can a consumer actually benefit from the RERA and how will it benefit CREDAI’s overall vision?

A: The act enables the consumer to exercise his right. The aim is to make the customer feel secure and be able to make a sound decision, when it comes to purchasing real estate. As an association, CREDAI works towards promoting fair practices in the sector and to facilitate an environment where grievances can be addressed. Along these lines, CREDAI runs a consumer grievances redressal forum and it is our belief that eventually, our efforts will merge with RERA’s mechanism.

 

Q: What are your views on the price trend? For how long will the market continue to witness a slump in the sales?

A: In many ways, the market is already witnessing a revival. Commercial realty has already started recovering, with an upswing in investment in the sector. The monsoon season, is generally a slow period for residential real estate. However, this time around, we have seen greater movement in inventory. The passing of the RERA, GST and various other factors, such as relatively cheaper home loans, higher liquidity in the market and rising incomes (the government’s salary hike was a good indicator for the market) have helped recovery.

 

Q: Do you expect an increase in prices and sales, during the upcoming festive season?

A: The festive season has always been a preferred time, for home buyers to make a purchase decision on their new homes. Going by historical data, we hope to see an upswing. The overall impact is already visible in certain markets. In the end, projects with good prices and outcome certainty, are being picked up by the customers.