4th May 2017, Gurgaon: The Haryana Government is all set to form its rules for the implementation of RERA (Real Estate Regulation and Development Act, 2016). The government hopes to resolve the issues regarding homebuyers and developers with these rules. Haryana Chief Minister Manohar Lal Khattar attended the monthly grievance committee meeting on Tuesday and expressed his concerns. The Chief Minister also promised to establish and implement the rules though he did not provide the timeline for the same.
How well the Act helps the market is yet to be seen though real estate businesses are optimistic of the outcome. Builders are rushing for registration but it will be some time before the picture becomes clear whether the act will prove beneficial for buyers or not. Officials are saying that the interest of stakeholders will be protected and law will be enforced but businesses have to work hard to regain the buyer’s trust lost in the last few years.
In fact, homebuyers have been requesting authorities to put a check on developers and ensure fair deals in real estate dealings for a long time. RERA aims to bring transparency and set accountability in the sector along with the accomplishment of stalled projects. The Urban Development Ministry has been working on same set of rules applicable in the NCR region, though state and union territory governments have the choice to come up with their own rules instead of opting for the Central Government notified rules.
The implementation of RERA is likely to prevent issues such as those of Unitech also. (The real estate company had floated an FD scheme in 2012 promising 12% returns. More than 56,000 people fell for the scheme and Unitech raised around Rs. 600 crore from their investments. The scheme was in complete violation of the law as RBI allows only NBFCs, banks, and housing finance companies to offer FDs in this way. Moreover, as the company had not returned the investors’ money, NCLT (National Company Law Tribunal) took cognizance of the issue and directed banks to freeze the company’s accounts. The Managing Directors of the company, Sanjay and Ajay Chandra were arrested in connection with the fraud.)
Unitech had to raise the funds through the FD to complete its stalled projects. The FD issue probably would not have happened if the market was more regulated. The presence of a regulator would have infused confidence in buyers and real estate firms would not have to resort to other means to raise funds.