By Quaid Najmi

Mumbai, Apr 24 (IANS): Belying apprehensions in many quarters, the implementation of the Real Estate Regulatory Act (RERA - w.e.f May 1, 2017) and later its state-level avatars, has done a world of good to the entire realty sector -- one of the biggest revenue grossers in the country, a top expert said.

Earlier, the building industry was considered the domain of the 'mafia, thugs and goons', but after the dawn of RERA, a certain level of respectability has been bestowed, lighting up the faces of the builders, buyers, financiers, international players and other stakeholders.

The generous pat came from the Builders Association of India (BAI)'s Housing & RERA Committee Chairman Anand J. Gupta, who is also the Chairman-cum-Managing Director of AYG Realty Pvt. Ltd. Group, Mumbai.

"The realty sector watchdog, RERA has done its job quite well in five years… We wish it had still sharper teeth for more overall improvements in the building-construction industry, maybe with certain amendments to the law," Gupta told IANS.

The building-construction sector was among the worst-hit during the two-year Covid-19 pandemic as it is considered a ‘high-value' decision for the masses and hence, not on their priority list.

"However, we are delighted that in 2022, it achieved an average of 15 percent higher sales compared with the pre-pandemic peak in 2019. The current picks are mostly in the affordable (1-BHK) and middle-class (2-BHK) housing segments, with the luxury (3-BHK and above, penthouses, bungalows, etc) niche lagging behind," Gupta said.

Here, he lauds Maharashtra as ‘the torchbearer' for the entire country and of the approximate 75,000 projects registered all over India, a staggering 32,000 are planned in this state alone.

"After RERA, many other states enacted their own similar laws, but some like Karnataka, Gujarat, West Bengal or Tamil Nadu tinkered with certain rules, ostensibly due to local pressures. However, they failed to live up to the legal scrutiny of the courts and finally fell in line," Gupta said.

Maharashtra and all Union Territories stuck to the central RERA guidelines and "formulated very fair laws which have boosted the industry", and the results are now visible with 45 percent of all new projects being launched in this state, he pointed out.

On the need to further ‘arm' RERA, Gupta said that "while cracking the whip has infused good discipline in all sectors of realty, there are still some gaps" which need to be sealed.

"Say... RERA has no control over the local bodies which approve the building plans and give other clearances, they often take a long time, and the builders are punished for the delays caused by the civic bodies. Even banks/financial institutions remain wary of extending project finances, certain RBI rules like the NPA declaration norms which are not practical for the realty sector, hinder our progress," rued Gupta.

He said one solution could be to bring the local bodies (municipalities), banks and financial institutions within the RERA ambit and made accountable for any/all of their acts of omission that delay projects, and RERA should be empowered to directly intervene to ensure the buyers are always protected, especially since big corporates are also entering the realty sector in a big way.

"The goal should be to achieve ‘0' stalled/stuck projects. Of the total projects in India, roughly 10 percent are currently held up due to reasons beyond the control of the developers. Though a few projects may have taken off later, it is high time RERA steps in and resolves such tricky issues to restart those stranded projects for the poor buyers who invest their life-savings for a home," Gupta said.

The BAI expert said post-RERA many international realty companies and developers looked at doing some serious business in India, but there were hiccups like demonetisation, confusing GST rules for under-construction, ready or old projects, and some RERA authorities also enforcing certain things arbitrarily, which have put the brakes on the global players.

"The Indian realty sector potential is among the greatest in the world, we need to tap foreign investments to join the development process. That can happen only if the international investors get a conducive working environment, coupled with a strong backing from RERA and the legal system to boost their confidence… The Centre must consider these aspects for long-term "ai"s," Gupta concluded.