RERA brings promises of reforms and transparency

THE year 2017, for the real estate sector, could be considered epoch-making, thanks to the introduction of Maharashtra Real Estate Regulatory Authority, or MahaRera. Most buyers welcomed MahaRera, as they believed it would curb irregular operators in the sector and force builders to have some accountability, a much-needed move as the end consumer often ended up paying the price for the builder’s delay. The regulator has the power to initiate action against the builder, in case of complaints by buyers, and can also ask for financial payments to the latter in case of a delay. Another aspect of MahaRera is the transparency it is expected to usher in. The regulator has made it mandatory for realtors to upload details of their projects, as well as the progress of the work, on the MahaRera website. The government is hopeful that this will also curb the menace of unauthorised constructions mushrooming in several cities across the state. Many realtors and builders have also welcomed the legislation which, they hope, will help streamline their business. While the real estate sector had much to cheer about in terms of regulatory norms, the business side didn’t quite pick up. The industry continued to register slow growth as sluggish sentiments of buyers continued to plague the market. Towards the end of last year, demonetisation had hit the sector, but the subdued buyer sentiments continued this year as well, according to realtors. The office of the Inspector General of Stamp Duty and Registration had seen registration of 1,26,182 documents by the end of November, higher than the number last year — 1,20,022 documents. In June, however, sales picked up as builders flooded the market, in view of the impending implementation of the Goods and Services Tax. Shailesh Puranik, managing director of Puranik Builders Private Limited, believes that the sector will witness more transparency next year. “It’s hard to predict the way the real estate market will move, as it is largely sentiment-driven in India… but these steps will lead to transparency in the real estate sector, which in turn will help improve the perception of investors and financial institutions towards the sector, and will provide developers capital and cash flow for the completion of the project within the stipulated time… I am a firm believer of the positive impact these reforms will have and believe that the current hurdles are minor ones. The overall property market should be on the edge of recovery shortly. These reforms will yield higher growth prospects for builders, as well as better returns for the end consumers,” he said.