New Delhi: The Real Estate (Regulation and Development) Act will go a long way in bringing transparency into an industry plagued by a credibility crisis while ushering in more financial discipline among developers.
Industry watchers are hopeful that the law will help instrument a revival of the real estate sector in NCR, particularly Gurgaon, Noida, Greater Noida and Ghaziabad, which has been going through a prolonged slump. The main reason for the slowdown, consultants say, is the loss of credibility among developers in the eyes of buyers due to huge delays in completion of projects, in some cases by more than 10 years.
Besides, developers hardly pay any penalty to customers. Therefore, buyers land up paying EMI on loans taken to purchase the apartment and the rent for their homes. This has turned away potential buyers from the market and abetted the slowdown. But with the real estate industry now governed by a law, homebuyers can bank on legal safeguards on their investments. Under the Act, builders can be punished with imprisonment up to three years for violations. The Act also has a provision of stiff penalties for project delays that stipulates that builders should pay the same interest to customers that they charge them in case of a default in payment.
The RERA, as the Act is known, brings existing projects within its ambit. But since real estate is a state subject, the Act leaves it to state governments to announce guidelines on completion schedules of houses. A state government has to appoint a regulator, which will frame rules to govern the real estate sector.
The realtors' community is unhappy about ongoing projects being brought within the purview of the new legislation. Realtors' association Credai said it would mean stopping work to ensure ongoing projects comply with the new law.
"This is not only time-consuming but also poses insurmountable difficulties in determining the nature and scope of regulation for ongoing projects,'' said Credai president Getamber Anand. If a project has already been sold to the extent of 50% and construction is under way, it is practically impossible to make the rest of the project compliant with the Act. It would also be prohibitively expensive, Anand pointed out. The Haryana government has expressed its intent not to include existing projects in the new Act. In Delhi, a number of projects running behind schedule may now see the light of day.
SOURCE: ETRealty.com
No comments:
Post a Comment