Real estate developers and industry experts have welcomed the passage of the much-awaited Real Estate (Regulation and Development) Bill, though it is heavily stacked against builders.
The sector will now find it easy to claim infrastructure status, the benefits attached with it and tide over its negative image.
The Bill, first introduced in Rajya Sabha in 2013, will affect over a million home buyers every year, according to industry estimates.
Rajeev Talwar, CEO of DLF Ltd, India’s largest real-estate developer by market cap, said: “The setting up of the Real Estate Regulatory Authority (RERA) will usher in much-needed transparency and pave the way for implementation of standard practices across the sector.”
However, he said, the Bill did not address single window clearance for approvals. “It needs to hold local bodies and authorities, banks, contractors, financial institutions accountable and we hope they will come under its ambit in future,” he said.
The developers’ umbrella body Confederation of Real Estate Developers’ Association of India (CREDAI) said Bill created a roadblock by bringing ongoing projects under it.
“This would mean stopping the work and ensuring the compliance of ongoing projects with the new legislation. If a project has already been sold to the extent of 50% and construction is underway, it is a practical impossibility to make 50% of the project compliant with the Act,” a CREDAI statement said.
Making the project fully compliant would be inconvenient and expensive, it said.
Industry experts and analysts said the Bill will spur fresh investments but cautioned against the proposed regulator turning into just another approval authority for developers. That would bring back fears of the inspector raj back in the sector, they said.
Anshuman Magazine, chairman and managing director, CBRE South Asia, said, “If implemented in the right spirit, it could facilitate greater volumes of domestic as well as overseas investment flows into the sector. Home buyer confidence in the property market is also likely to revive.”
Others said the sector will now have strict definitions and disclosures to stick to. Neeraj Bansal, head (real estate and construction sector), KPMG in India, said developers will have to augment their project management skills as the Bill is likely to segregate quality-focused developers from the fly-by-night ones.