The Real Estate Regulation and Development Act or RERA, will have a monumental impact by weeding out malpractices and unscrupulous brokers and builders. Builders will now have to disclose all project-related information including plan, layout, government approvals. But states have been delaying to notify the rules.
After a two month long wait, the Karnataka government has finally notified the rules but there has been a lot of criticism as homebuyers believe rules have been diluted. Here are Top 3 takeways of the Karnataka RERA:
1. Ongoing projects, where 60% work has been completed or 60% sales done, will be out of the ambit of the Act. This will be a loophole for many developers to exploit.
2. Also, all this will be certified by a ‘competent agency,’ but there is ambiguity as to who the agency will be.
3. The imprisonment clause has been completely done away with.
Homebuyers are thoroughly disappointed and demand clarity of the terms.
"These exclusions create a lot of questions among the existing buyers who are eagerly waiting for RERA to resolve their problems. Every individual, every homebuyer has a question, he want to know if his project will come under the ambit of RERA or not? How will the data be compiled? Who will certify the data? Where will it be available? All homebuyers are totally in the dark,’ says Shankar, Convenor of Fight For RERA (Karnataka Chapter).
But developers and realtors claim that the draft has incorporated all other aspects of the Centre's notification. In the current scenario where Bengaluru is already reeling under pressure with launches dropping by 42% and sales by 19%, developers are betting on the implementation of this Act to help streamline and pull up the industry.
"There was a demonetisation phase, GST and then RERA. The developer group is going to be very careful before launching. Yes, the timelines are pre-committed so you have to be very sure what kind of projects you are coming up with, and what is the sales traction you are expecting. I think in the short term basis there is going to be a definite impact on the supply side of it but in the next 9 months time this scenario will change and things will pick up,’ says Shantanu Mazumder, Director of Knight Frank India – Bangalore.
Until recently Bengaluru was a resilient residential market, but today it is feeling the heat. The long list of piled up projects and deferred delivery dates has hampered the growth. Experts are hoping once RERA is in place, along with the already completed metro rail and launch of smart city project, things will turnaround for the city.