The corporatization of real estate post RERA
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The Indian real estate sector, we will all agree, is gradually experiencing a revival and the activity of this segment is definitely moving away from the straitjacket of the challenges posed by the COVID-19 pandemic. However, the question that always arises is whether the industry is truly immune to unscrupulous trends and whether a home buyer truly feels that a home buying process is safe, trustworthy, and trustworthy. transparent to him.
The government’s efforts to reduce the challenges in the Indian real estate segment are commendable. It takes a lot to set in motion a positive transformation, and various government actions have proven that the right initiative with the right intention can work wonders. After the implementation of RERA, we have witnessed how the industry as a whole has been affected purely due to the unethical practices of some. RERA has been the answer to the evils that have ravaged the real estate industry.
RERA, as we all know, stands for Real Estate Regulatory Authority and the word “to regulate” is a verb meaning “to control something by using laws or rules”. Without a doubt, “control” is what we need to root out the unscrupulous elements that degrade the industry and shatter the dreams of innocent and unsuspecting buyers. The essence of RERA is to implement strict rules that justify each stakeholder of their right and ensure that the law runs its course if any of the stakeholders breaks the rules.
There are some important guidelines from RERA and the main ones are mentioned below –
- No real estate project under construction can be marketed without the agreement of RERA
- All relevant information should be published on the RERA website and all marketing materials should bear the RERA number for the buyer to verify what is promised and what is approved according to RERA
- Guidelines on the maximum payment that can be collected by the developer before actually registering the sales agreement
- Sales compromise model
- Escrow account mechanism to prevent embezzlement of funds by the developer of the respective project account to ensure timely construction and delivery
- Clear specification of the project delivery date and strict penalty for the developer in case of late delivery
- RERA Court provides a quasi-judicial redress mechanism to the buyer for a speedy hearing and decision
- Facilitation of an efficient and rapid amicable settlement through a serious and well-defined neutral arbitration
- RERA registration required for brokers as well
In addition to the direct benefits mentioned above, there are many indirect benefits of this regulatory environment. One of the major changes is the consolidation of the sector. Large companies and trusted brands like Godrej, Shapoorji Pallonji, L&T Realty, Mahindra, Lodha, Brigade Group, Prestige Group and many others are taking a major positioning. There are several buybacks and buybacks by these big brands. All are very optimistic about the sector and have drawn up major expansion plans.
This consolidation is a good signal for buyers because of the brand value, trust factor, and the trust buyers place in businesses. These companies are redefining the way a business is done in real estate. From product design to sales and aftermarket, the goal has been to delight the customer. Although it is still too early to comment on their success, their intention is very positive, strong and clear, ie “the end consumer is the king and the king must be treated as such”.
Investors, both private and institutional, are gaining confidence and money is pouring into the sector. Private equity investments have exploded, as has capital raised in the form of QIPs or IPOs, etc. Foreign investment firms are more interested in the rest of the regulatory framework.
Another upcoming trend is that the large Proptech brokerage firms are helping developers as well as brokers move towards a smooth and transparent era for a buyer and help make a buyer’s trading experience wonderful and memorable. These companies are making the most of technology to ensure a hassle-free and seamless buying experience for home buyers, and real estate brokers and developers are empowered and empowered to effectively manage their business portfolios.
While a completely reformed Indian real estate sector may be far-fetched, some positive implementations by the government to regulate the sector have certainly sparked significant ripples of change in the sector. If the government continues to adopt strategies to revive the segment, by monitoring it, reviewing it and regulating it very closely, I firmly believe that we can usher in an era of Indian real estate that will be a godsend for everyone. stakeholder in the segment.
(By Ashish Narain Agarwal, Founder and CEO, PropertyPistol.com)
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