Head-Legal, Omkar Realtors
One of the biggest reforms in the Indian real estate sector has been the formation of Real Estate Regulatory Authority (RERA) aimed at providing a transparent and regulated environment. The reform augurs well for overall realty vertical encompassing all stakeholders, be it the customers, vendors or the developers fraternity.
On perhaps similar lines, what the SEBI body, introduced in mid 90’s, did to the domestic stock markets; RERA too is expected to usher in a highly transparent mechanism. The reform agenda is to create fairplay in all transactions and preempt non-serious players from entering the market altogether.
As per the available data, Maharasthra state RERA received close to 10,500 project applications till July 31, 2017 also happens to be the highest for any state.
With RERA registration being the benchmark, the trust deficit between the customers and developers fraternity will be bridged to a vast extent both at the domestic and globally level.
One of the challenges for developers fraternity would be addressing the customer interpretation of legal issues pertaining to specific projects. There will be instances with even the most professional brands enjoying an excellent track record carrying the baggage of legal wrangles ;while the work on the project continues smoothly. Here, qualitative customer engagement at the ground level will be the key to put the end customer at ease in case they view even routine or minor issues with magnified glasses. The ground reality is that most of the projects would have some legal wrangles; however insignificant. Brands need to simplify and address their customers the relevance and final impact quotient of such legal issues mentioned in the RERA profiling.
In Maharashtra, real estate industry in the pre-RERA era was fairly well regulated with MoFA too. As against 70% under RERA, the practice of entire amount received from customers being directly deposited in an escrow account was being followed by some of the players engaged in large projects. This was necessitated owing to an in-depth due diligence and monitoring by credible and major lenders.
In the new environ, we have to provide the same information and documents online albeit mandatorily and make full disclosures which is a welcome move. While for responsible players this is more of a procedural shift with a higher degree of transparency; the non-responsible lot would find the going hard which augurs well for the customer fraternity and the vertical’s public perception.
RERA has been enacted keeping greenfield projects in mind and the issues pertaining to redevelopment projects/schemes distinct to Mumbai have not been considered therein. However, the state government has suitably addressed the concern by providing flexibility in the rules with respect to the scheme under the state law without affecting the project registered under RERA
Lower degree of transparency was witnessed at a time when hardly any data or information was available in public domain. Today, we have transitioned to cutting edge professional management adapting and introducing systems such as SAP (system application products) amongst others to take care of information requirements both for the management and the customers. Today all the information and data pertaining to credible projects is available online and also with government authorities and relevant bodies such as MCGM, SRA, etc. who grants permissions.
A new pathway has been created for the Indian real estate sector providing a welcome opportunity for the developers and customer community to build their future together on mutual trust.