Special Correspondent
Daijiworld Media Network - Business

Mangaluru, Jan 12: In a strange move last month, the new watchdog of the real estate industry in Karnataka - the Real Estate Regulatory Authority (RERA), published a list of projects in its web portal under the heading 'Projects under Investigation'. Included was a note in red, cautioning people that they would have to deal with these projects at their own risk.

This unexplained move by RERA sent the whole real estate industry in the state into a tizzy. The list began to be circulated in the social media, creating panic among customers who had already invested in many of the projects listed.

What was really puzzling about this move was that RERA had not bothered to check with the builders concerned before publishing the list, which mainly contained old projects, dating back to 15-20 years. The regulatory body has powers only to register ongoing and new projects and has no jurisdiction over old, completed projects.

Though RERA was clearly in the wrong to publish such a list and create unnecessary panic, several builders of repute, who had for many years maintained impeccable records, sent the occupancy/completion certificates of their projects listed by RERA to the body, as proof that their projects had perfect titles and were completely approved by government authorities. Their plea was that this erroneous list be corrected immediately since it was sending a wrong impression to their customers that the builder had done something wrong.

However, their pleas fell on deaf ears as RERA continued to show their projects in the 'Investigation' list.

Several questions arise about this move by RERA:

• What was the need to publish lists of old projects, over which it had no jurisdiction, and create an impression that these buildings were somehow 'illegal'?

• Why did RERA fail to check with the builders concerned about the projects before publishing the list?

• Why is it taking RERA an inordinately long time to check the occupancy/completion certificates sent by builders and correct the list?

Many of the builders whom Daijiworld spoke to say that this extreme move by RERA is causing irreversible damage to the reputation of the industry and will harm the development of the real estate sector itself. By some estimates, the value of the projects across the state that has been put under a 'cloud' by RERA is nearly Rs 50,000 crore. Many of these are already fully sold and several are backed up by housing loans from public sector banks. At a time when the real estate industry is going through a tough phase because of new legislation like GST, this unilateral action by RERA is sure to result in further hardship to builders and customers alike.

Says a prominent builder in the city, "What has been forgotten by the new watchdog is that RERA is under the statutory obligation to act not only as a regulatory machinery but also a development body to facilitate the growth of the housing sector. At a time when the focus should be on how to help the common citizen acquire a much needed shelter, RERA is creating unnecessary fear in the minds of people who wish to invest in a home."