Why In News
A recent meeting of the Confederation of Real Estate Developers’ Associations of India (CREDAI) in London was dominated by discussions over the Real Estate (Regulation and Development) Act 2016, better known as RERA, with industry representatives voicing their concerns particularly over the legislation’s impact on ongoing projects.
RERA AND CONCERNS
- RERA, brought in to protect the interests of home buyers, and codify the running of the sector (with the aim of boosting investment in real estate over the long term) came into force on May 1, with individual States required to declare the rules within a 90 day period.
- Under the law, developers have 90 days to register ongoing projects.
- It will help weed out unscrupulous developers and set higher standards.
- Its members are concerned about the provisions regarding ongoing projects, warning that it could have long term, negative reverberations for the industry, ultimately hitting supply and pricing.
- Part of the problem lies around the lack of clarity on what constitutes an ongoing project .
- Argued that the law, when it comes to ongoing projects, is actually unimplementable in several ways ranging from.
- The treatment of common areas in buildings to the defect liability period,
- To the legislation’s requirement that 70% of proceeds from the project be placed in a separate account.
- Developers have been struggling to meet the 90-day registration process, leaving them potentially in breach of the legislation, and unable to market or sell their projects.
- In the legislation there is no place where we can go as developers, if we don’t get a completion certification in time for a completed project, there is no provision if developers don’t get the electricity connection, the water for my completed project.
Topic : Development Studies
Source : The Hindu