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by Indianmandarin
on October 20, 2020
The second-largest employment generator in India after agriculture, the real estate sector has a vital role to play in the growth of the Indian economy as it contributes around 6 percent of the country’s Gross Domestic Product (GDP) each year. The sector embarked upon the journey of rapid transformation by embracing professional standards and evolving into an organized mode thanks to the implementation of RERA – Real Estate (Regulation and Development) Act 2016.
RERA aims to usher in ethical practices in the real estate sector, bringing immense relief to millions of property buyers who are largely taken for a ride by unscrupulous developers. It can be described as a crucial reform measure in the hitherto unorganized real estate sector as it establishes a Real Estate Regulatory Authority that has jurisdiction over both residential and commercial real estate transactions.
RERA claims to protect the interests of consumers by promoting transparency, fair play, and accountability in real estate transactions. With the targeted execution of projects and a uniform regulatory environment for speedy adjudication of disputes, it is supposed to pave the way for the sustained growth of the real estate sector.
Has RERA brought much-needed transparency or simply added to bureaucratic layers over the past four years?
What looks definite is the market sentiment and the faith of homebuyers is still tragically low. The introduction of the RERA, along with GST, did try to improve the situation. However, buying a property still turns out to be a nightmarish experience for consumers, given the ambiguities and complexities surrounding the real estate sector and ineffective implementation of the regulation. More often than not, it is found that a real estate consumer lands into trouble while buying a property, be it for end-use or investment purpose.
As the process of urbanization and industrial growth gains momentum necessitating the availability of real estate on a big scale, the very process of property purchase has become a highly contentious issue, involving development authorities, real estate companies, and property buyers in protracted legal battles.
Eventually, the end-users are taking the final hit because they invest their hard-earned money, apart from taking loans. They have to pay their current rental, besides the EMI against the loans borrowed, which add to their trauma. With the elusive promise of delivery, non-adherence of any time frame on completion of construction, insufficient details available on the track record of the developer, the real estate investment often turns into a non-performing asset.
Going by the increasing incidents in which home-buyers of real estate today have had no way out but to repeatedly knock on the doors of the judiciary, one can imagine the extent to which people have been exploited by developers.
Buyers put their life savings into buying a house but its possession turns out to be a distant dream. The allurement to make more on devious grounds has led us to the juncture wherein a majority of developers are looked upon with suspicion. A lot of effort will have to be put in to clear the pond which can commence only after RERA orders are implemented in letter and spirit, which, sadly, does not prevail on the ground. Clearly, as proof of the pudding lies in the eating, the real impact of RERA lies in its execution on which point it has not fared well across the country. RERA has, by and large, failed to ensure that malpractices in the sector are curbed and all processes are streamlined.
Though RERA was enacted by Parliament to bring cheer to homebuyers, and pave the way for protection from unscrupulous activities, the legal tussles between property buyers and developers due to delay and default in project completion have not come down but rather increased post-RERA establishment.
Despite punitive provisions against errant developers, the Act has largely failed to ensure ethical practices, adherence to quality control measures, timely completion of projects, clear titles, and transparent documentation, strengthening the trust and confidence of investors which in turn would have resulted in market buoyancy. The law is yet to forge a bond of trust between developers and consumers and instill confidence among investors. Against the backdrop of only a few focused and dedicated players following good practices, the regulation has not helped curb manipulations and abuse of law.
The implementation of RERA has definitely been a challenge given its inability to overcome bureaucratic hurdles. In fact, RERA has not led to an image makeover of the real estate sector on the back of much-needed transparency and professionalism. Currently, the delivery of real estate projects is a mirage in India, with RERA holding an abysmal record on the front of execution of its own orders and actual deliverance of justice to property buyers.
Posted in: news
Topics:
rera, homebuyers, builders, infrastructure, housing, corrupt practices, corruption, cheating, employment, economy