RERA's Journey Future of Real Estate!

 

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“Real estate is an imperishable asset, ever increasing in value. It is the most solid security that human ingenuity has devised. It is the basis of all security and about the only indestructible security.” … Russell Sage.

 Sage (August 4, 1816 – July 22, 1906), was a financier, railroad executive and Whig politician from New York, United States. And the USA is the Mother of Real Estate Business (even with such big land availability), & no wonder personalities like Sage have understood the importance of real estate long back! Unfortunately, in our country, real estate may have been dear to most people for the money it generates yet as an industry it never gets the respect it deserves, which is a bitter fact for the entire industry! And this was once again proved when, The Real Estate (Regulation & Development) Act 2016, came into force in 2017, means, the Act is nearly five years old now. Though five years is a very less time & the Act is young, especially considering the age-old nature of real estate which has been here not just for a few decades but for centuries, the forms may be different, the RERA Act has been talk of the town (country) since it has been in force! As per this Act, every State in India must have its own RERA authority, so in our State its MahaRERA i.e., Maharashtra Real Estate Regulatory Authority. Frankly, I am not a lawyer or even a builder in traditional way (most will understand, what I meant by builder in traditional way) yet I am one & real estate is my business so I am connected to RERA & for mine as well my fellow builders & the end users i.e. our customers I thought taking this subject for sharing as its five years since the Act has come in the force & a lot has been changed & more than that a lot has been spoken! Any Law, even criminal (we know MOCA, TADA, MPID) is effective only when its practical as well backed up by proper enforcement system for implementation of that act & that is why MahaRERA’s importance is very much when its real estate!  The first thing I noticed is how conveniently we made short form as RERA act (from common public & even builders view) as if you read the full name of act it as Regulation & Development also in it but neither in making short form of the act not in formation of the RERA authorities, development word has been omitted, coincidence or reputation of the builders, I will like to draw attention of all the concerned parties to this small fact which many will say what big deal & even Shakespeare has said what’s in name, but in a country where even your surname is important as it tells about your caste & religion & from that the treatment you get changes, this small fact about deleting term Development from short form of RERA does matters a lot! Because it shows our attitude towards the entire real estate industry which common man (so does the govt) thinks is guilty or culprit, it’s only the Regulation part has kept in making short form, so every time RERA is mention all you think is about Regulation but we forget that there is Development too, was focus of the Act!

This is my object of sharing, to make people (builders as well home buyers) understand, why RERA came in existence & what it is today (after five years) & what it should be in future, from not just builder’s perspective (which no one wants actually) but from the society’s perspective. Before I start my sharing, I repeat, neither I am a lawyer nor I am some expert in policies related to real estate, especially legal ones such as society or apartment by-laws etc, yet I felt like taking the RERA aspect for sharing as I am in the business of real estate. More than that, recently I came across someone who is authority (read as The Authority) on RERA & he shared very important aspect (an eye-opener) with me , which says, if a developer fails to deliver something which he has committed & later says that it wasn’t in his control to foresee such things & the commitment he has made to the flat buyer gets failed, then its solely the builder’s fault as he can’t escape RERA proceedings under the shield saying things went beyond his control! RERA understands only the builder & his commitments & is keen to protect the clients & if a builder doesn't want to get under RERA scanner (read as punished) then he should be careful before he commits anything to his clients before they enter into the agreement! And the agreement also is no longer under the control of the builder as RERA has made a standard form of agreement with basic do’s & don’ts conditions & the builder must follow that format, all he (or she) can change is, details about the land as well project respectively! Till now the flat sale agreement was a one-way thing (sorry fellow builders, a fact) i.e.  builder used to put every possible escape route from his commitments & the flat purchaser had no say about it, which was, is (will be) RERA’s prime focus. Because the biggest complaints regarding developers from their clients was (and is) failure in fulfilling commitments made by the builder to them & getting away under the shield of the one-way clauses in the agreement! I am sorry if I have offended to my fellow builders buts this is what public thinks about our industry & that’s why, ours is the only industry for which a separate Act at Nation level has to be made & authority like RERA is created, we like it or not doesn’t matter as RERA is in very much existence, legally is a fact!

Here one more aspect was there, it's about the customer reading the clauses in the agreement, even today hardly ten percent of clients read the flat sale agreement in detail (some read it in too much detail, that's a different story) & one percent of them take professional legal assistance in doing that. And these very same people even while buying groceries or vegetables check the goods a hundred times, that’s the irony of real estate as it's because of such an attitude only the ill elements in real estate have grown like cancer. Though the authorities says that its monopoly of the builder which made clients to surrender on such fronts like agreement draft but this is where I differ (with due respect to RERA bosses) as nobody can force a product on his client, it is the greed of the clients also which made builder dare to draft one-way agreement is equally true. As even today thousands of clients book the flats in the illegal buildings which don’t have a legal sanction, leave apart a RERA registration; so, my question is what RERA is going to do against such clients? Because if an illegal building is the outcome of a corrupt system (read as govt) & bad builders then it's equally the outcome of the greed of the buyers to save money which would have been more if they had gone to a legal builder, right? Here again the system (read as society, govt, judicially) will say it’s because of financial constraints a person has to surrender to buy his home in an illegal building & I do sympathize with all such flat buyers but what they are doing is not right as the price has to be paid to entire real estate which is doing business by following all the norms, will RERA throw light on what’s being done about the biggest threat to real estate industry i.e., illegal homes?  Because just like the most popular Bollywood Cinema script, “aadmi bura nahi hota, wakt bura hota hai” & justifying the crime then the same can be said about the builders also! And the very same Bollywood teaches us this philosophy too, “Jurm jkaranewalese jada gunhagar jurm sahanewala hota hai”, making flat buyers more guilty than the defaulting builders in such illegal projects, isn’t it? And why just being ignorant attitude towards sale agreement drafts, I will show you thousands of cases where flat buyers have bought a home with their life time’s money with some builder about whom they don’t know anything, just because he is giving them a home at a location where they want & in their budget, even redevelopments are not expectation to this greed of land-owners/flat holders, so, is it just builder’s fault?

As on one side RERA expects transparency as well committed deals by the builders & is ready to axe any head in case of failure on these fronts but on the other side the “Mai Bapp” govt is hell bend to legalize all the illegal homes (read as projects) under humanity, what is RERA’s stand on this entire legalizing illegal homes all over the State, isn’t that will be injustice to all the builders who are trying their best to follow all the RERA norms just because they want to make some money by following law! I am not against RERA as what it is asking is a normal fair deal & which should be followed by every business-man, what I am asking is, every coin has two sides & an edge too, so what about other side & the edge? As, by now why RERA hasn’t entered in the petitions against illegal homes & asking Hon Court to demolish all such buildings as well making Govt to pay to the flat holders in such buildings for their money locked-up & ask them to book with a regular RERA registered project their home with that money, isn’t this also expectation from a law-abiding builder from RERA authorities?

And then comes the second aspect of REAR formation i.e., Regulation & Development; can someone guide what Development term was included in the name of RERA act along with regulation? What I feel (I am not saying I think) is, Development means any Development such as plot, flats, offices, IT parks etc, & it was the job of the authority to see that this development also should happen along with regulation! If RERA is meant to protect the interests of the flat buyers, then please do mind when a deal is struck, then both parties are in one boat, and especially the real estate industry named boat which is controlled by many captions making the builder helpless at times! I repeat, I am neither sympathizing with the builders nor asking RERA to make rules related to Urban Development or Revenue or Development Plans, what I am saying is RERA authorities must take these aspects & builder’s helplessness on these fronts, just as a natural justice! I agree, the builder must consider all such things about NOC’s & Sanctions before launching any project & keep his flat holders updated as well informed yet when an under-construction project gets stop work due to some weird norm of some govt authority, it’s the respective builder who has to face more losses than the flat holders, please consider this fact, is what my appeal to Hon RERA bosses!  At the same time, it’s a young law & is still evolving, what I feel is a dialogue (with open mind) is important on regular basis to refine the law as well its implementation as already real estate (those who do fair business) has to face maximum number or authorities & regulations, & in such situation we don’t want o RERA to be one more pinching  nail in the shoe but should act like a sole which will protect us from the other existing (and new )nails & I thinks that’s a fair expectation considering the Development part of the act!

Lastly, about giving clarity to the clients (read as confusion) about how a financially stuck project can be completed with the help of RERA, as that’s the worst thing which can happen to any real estate project. Agreed, RERA is supposed to keep a tap on financials of the project, yet with too much supply in the market (at some places) demand can get reduced & a project can go in loss. Especially in real estate where may private as well co-operative financers (read as loan sharks) are ready for the needy builder (read as kill), how RERA is going to assure that a financially loss-making project can be through when only some percent of the units have been booked as there have been cases where clients are waiting for the possession, builder is absconding & possession date is in hanging! Here, a word of advice (well at age fifty plus I can say that) to the home buyers, just because RERA is there that doesn’t mean it will take care of everything & it’s an act/ authority to monitor real estate; do mind, RERA is not your insurance policy for the deal you are entering in with any builder, & you only have to be careful while you choose with whom you book your home! For the builders all I will share (can’t dare to advise builders) some basics (which I also try to follow at my end), RERA or no RERA, it’s what your clients thinks about you is what decides fate of your business & for that, it’s always better to say “No’ & deliver than saying ‘Yes’ & failing to deliver, adios with this note!

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Sanjay Deshpande 

Sanjeevani Dev.

Please view my sharing about real estate in Pune at You Tube link below..

 

https://www.youtube.com/watch?v=g4xX7eopH5o&t=5s

 

Please do visit my blog links below to read about real estate & home buying! 

https://visonoflife.blogspot.com/2023/01/defining-good-home-real-estate-in-2023.html

http://jivnachadrushtikon.blogspot.com/2023/02/blog-post.html

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