The April 30 deadline to set up real estate regulatory authorities in the states is fast closing in but most states appear to be far from ready. Majority of the states are yet to either frame or notify the rules and not even anywhere close to setting up the regulator. Without these the realty law, Real Estate (Regulation and Development) Act, 2016, framed to protect the homebuyer will be very ineffective and as good as non- existent.
Of the 29 states and seven Union Territories only Madhya Pradesh, Uttar Pradesh, Gujarat, Andhra Pradesh, Odisha and Delhi have drawn up the rules. Furthermore, many of the states are understood to have diluted the rules which might end up benefiting the developers than the homebuyers.
In such a scenario it is obvious that the already stuck and frustrated homebuyers would get even more anxious.
Left with no choice, homebuyers under their umbrella association, Fight for RERA have written to Prime Minister Narendra Modi requesting him to look at alternatives like mergers and acquisition of incomplete housing projects and involving government companies like NBCC to build affordable houses.
"It’s our humble suggestion to form an empowered group comprising of officials from the PMO, MoHUPA, real estate sector experts, consumers, bankers, renowned industrialists with impeccable integrity to suggest mergers, takeovers, asses financial conditions, immediately stop asset stripping and suggest a way forward to ensure completion of projects," Abhay Upadhyay, National Convenor, Fight For RERA wrote.
Citing the Satyam Computers fraud case, Upadhyay wrote, "we strongly feel that the time has come for your Government to take action in line with action taken during Satyam Computers Ltd. fraud for resolving the issue before it becomes more complex and reaches a point of no return,".
Industry players though have a different solution.
"A more viable solution and a doable one would be if the government creates a fund through its various nodal agencies like National Housing Bank and HUDCO and mandates these funds to buy the finished or semi finished inventory at a pre-negotiated price. What this will do this ensure cash flow to the developers in a regulated manner through an escrow account and then the projects can be auctioned," Rohit Raj Modi, Director, Ashiana Homes and Vice President, CREDAI said.
"Funds has been a major issue along with delay in approvals. So in my opinion the government should look at options that would ensure easy access to funds and making the government agencies accountable under the RERA for any delays in approvals," Prashant Solomon, MD Chintels and Member, CREDAI said.
The real estate regulatory authority Act came into force on May 1, 2016. States were given a year to get the regulator in place.
As per the law, builders will have to register projects coming up on 500sq m or more with the regulator. They cannot launch or even advertise their plan without registering with the regulator. In the absence of the regulatory authority, developers won’t have to register projects if they complete it before the regulator is notified. The law covers new as well as all those projects where completion certificate is awaited.