41 lakh homes in the pipeline in state

Over 1.6 crore citizens are waiting for delivery of 41 lakh homes in the pipeline which has an estimated investment of ₹14 lakh crore, said Maharashtra Real Estate Regulatory Authority (MahaRERA) chairperson Ajoy Mehta, emphasising why regulation was required from the government.

MUMBAI: Over 1.6 crore citizens are waiting for delivery of 41 lakh homes in the pipeline which has an estimated investment of ₹14 lakh crore, said Maharashtra Real Estate Regulatory Authority (MahaRERA) chairperson Ajoy Mehta emphasising why regulation was required from the government, and warned that Authority will not hesitate to use its powers to ensure developers comply with the statutory disclosures regarding their projects.

41 lakh homes in the pipeline in state

Mehta was addressing a a group of young developers during his talk on “The RERA ERA - Journey of 6 years of Rebuilding Trust & Credibility” organised by CREDAI-MCHI and its youth wing at a city hotel on Tuesday night.

Mehta, who retired as Chief Secretary and also served as the BMC municipal commissioner, said when the government enacted RERA to regulate real estate sector in 2017, the average overhang in delivery of housing units in Delhi was 47 months, while in Mumbai and Pune it was 27 months, and 20 months respectively. “66 per cent of litigation was related to land and property,” he said explaining the scenario in 2016-17 when demonetisation, and GST had also hit the real estate industry.

Mehta said the RERA envisages that 70% of the construction project funds should be kept in a sepate account, no Commencement Certificate should be given till all approvals are in place. It mandates monitoring of the expenditure, timely delivery as per the registered agreement, 2/3rd consent of home buyers for any change in sanctioned plans, quarterly audit of the funds, a model agreement which provides level playing field to both developers and home buyers, and defect liability till five years. “Any product you buy comes with a warranty. Why shouldn’t homes? 60% of a person’s assets are invested in a home,” he said.

Addressing complaints from developers that process of registration is taking longer, Mehta said, “I owe an explanation, but not an apology.” He said unlike in last five years of MahaRERA’s existence, registration is not going to be simple. He said a new project will be thoroughly scrutinised for sanctioned plans, all approvals and the required disclosures before registration is granted. He cited the example of a leading developer whose registration application was repeatedly rejected as his representatives had not uploaded relevant sanctioned plan documents, CC declarations etc.

Mehta said he believed in the pro-active approach of health check ups to prevent the future disease, and therefore, the Quarterly Project Reports (QPRs) mandated under RERA will be crucial to determine the health of a project. He said MahaRERA monitoring mechanism detected that out of 700-odd new projects registered in January, more than 540 had not submitted the first QPR by April 20, and these projects have been served showcause notices.

Mehta said the third aspect that will be scrutinised closely will be the funds coming into the projects and their expenditure. He said one big developer was found to have 10 of his registered projects linked to one bank account, when RERA clearly mandated that each project’s funds should be kept in a separate designated account.

Speaking on the future trends in real estate, the former bureaucrat said rental housing would be a trend that would grow over the next few years. He said globally 45 to 60% housing comprises of rental housing. “In Karnataka, 46% people live in rental housing. It is only 20% in Mumbai. Rental housing is coming,” he said.

He said, “The younger generation is into experience. Things are changing, people do not want to be stuck. So, rental housing is coming. Wht I call uberisation of real estate is likely, and we are looking at how we regulate that.”

He said the housing sector will start aligning with services that people need – like student accommodation, old age homes, homes for young couples. “Services will become more predominant than the house itself,” he said.