Trying to make sense of the Real Estate Regulation and Development Bill
The Real Estate (Regulation and Development) Bill passed by both the Rajya Sabha and the Lok Sabha in March 2016 and subsequently given assent by the President will alter the landscape of the Real Estate sector. The Bill is part of a series of reforms introduced over the last couple of years by the central government in hopes of propelling further growth in the realty sector. While it will take a full year or more for the Bill to be implemented on the ground in each state, it is important to understand the implications of this groundbreaking and landmark bill, especially for our valued-customers.
What is the Real Estate (Regulation and Development) Bill?
The Bill requires every state to establish a Real Estate Regulatory Agency (RERA) and Appellate Tribunal, government regulatory bodies that will govern both residential and commercial real estate transactions, as well as handle the redressal of customer grievances against builders. Under this new law, all projects over 500 square meters (or more than eight apartment units) will need to be registered under RERA. Moreover, builders will need to submit all project information (from plans, schedules, land title status, government approvals etc) to the regulatory board which will in turn make available this information to customers when requested. And most importantly, the law mandates that 70% of a project’s funds be secured in an escrow account, not to be re-directed for the development of other projects.
Why is this Bill being implemented?
The purpose of the bill is to bring greater transparency and accountability to a sector. In so doing, the hope of the central government is that the implementation of such regulations on the ground will standardise India’s real estate sector in line with global standards, helping to bolster the influx of global capital into the sector. And for Kochi, a city so interconnected with the rest of the world, such developments will hopefully aid in furthering foreign investment into the city’s realty sector.
What does it mean for ABAD?
While such developments will invariably alter the landscape of Kerala’s Real Estate industry overall, for us, it’s business as usual. For the past twenty years, we, ABAD Builders have remained a constant amid a rapidly changing landscape of Kerala’s Realty market. Many developers have come and gone. Yet, we have always been here, building ever larger and ever higher. And the secret to our longevity and success lies in our steadfast and stubborn commitment to standards of transparency and accountably only now being set out by the Real Estate Regulation and Development Bill. In other words, we are RERA-ready.
What does this mean for you?
For Real Estate customers, the Bill is certainly a triumph. The establishment of RERA will mean a better safeguard from predatory transactions. The implementation of this bill will also mean increased assertion on the timely completion and delivery of projects. Nevertheless, as always it is important that you as customers do the necessary ground work and look at the delivery track record of builders before purchasing a flat. After all, there are builders who build. But there are only a few who build looking to the future; building real estate in ways that ensure capital appreciation and future investment returns.
