Are We Prepared To Implement Real Estate Law?
As experts busied themselves in examining the law, real estate developers employed themselves in understanding its implications and prospective buyers eagerly awaited its full-fledged arrival, Urban Development Minister M Venkaiah Naidu in February sent a two-page letter to all the chief ministers of the country. This was to request them to stick to the May 1 deadline and formulate rules for the implementation of the Real Estate (Regulation & Development) Act, 2016.
“The Real Estate Act is one of the most important reforms for the sector, which would bring benefits to all stakeholders. It is, therefore, my sincere request to please bestow your personal attention to this matter so that the Act is implemented in time and in the spirit with which it was passed by the Parliament,” the content of the letter thus went.
Also read: RERA IS NOT JUST GOOD FOR BUYERS, IT'S GREAT FOR DEVELOPERS TOO. HERE'S WHY
However, states are seen taking their sweet time in responding.
As it stands today, only four states ─ Gujarat, Madhya Pradesh, Maharashtra and Uttar Pradesh ─ have notified the rules. Karnataka will become the fifth state to accomplish the task, say media reports. Earlier, the Centre had notified rules for six union territories which do not have a state Assembly. It is worth mentioning here that it took about eight years for the proposal to get the status of a law ─ it was proposed in January 2009 and notified by the Centre in May 2016.
There have also been reports of many states attempting to dilute the norms. “There are media reports that some states have diluted certain provisions of the Act in the rules notified by them. I want to make it clear that any compromise with the spirit of the Act will have serious implications, including public outcry. Whoever does so, will have to face the public outcry,” the minister warned.
Even if states quickly draft their notification and make the law effective by May somehow, real estate developers may not be ready to start acting with immediate effect. Mind you, the implementation would not just mean getting your papers in place. It would also have a tremendous impact on businesses. Further, while some are struggling to find ways to curb expected cost escalations others are worried they would cease to exist once the law comes into force. Till the law is fully implemented and things settle down, interpretations, assumptions and suspense are keeping real estate developers, big and small, jittery.
“It will be difficult to adapt for every developer, broker and even buyer. RERA would make business difficult for us,” Supertech Chairman R K Arora told media in October last year.
“Developers will be able to launch project only when they have all approvals. This will imply longer timeline for launches and reduced launches,” said Ankur Dhawan, Chief Business Officer (Resale) , PropTiger.com.
A buyer-friendly law need not necessarily be an anti-developer law as is the case with Real Estate Act. But, the government has been late in addressing that concern. “This law, which was widely welcomed and appreciated, benefits both the buyers and sellers if implemented in the true spirit of the Act,” Naidu told media. However, the assurance might have come too late and may not be able to smoothen the ruffled feathers.
Despite all their eagerness, home buyers are nervous, too. Their wait has been long and their patience might be thinning. In a scenario such as this, only time would tell how well the stakeholders are able to receive the law, that if states are done doing their part of the job.