A general view of the residential apartments is pictured at Gurgaon, on the outskirts of New Delhi. Reuters
India’s Real Estate (Regulation and Development) Act (RERA), which was passed in 2016 is the most reformatory regulation for Indian real estate. The real estate sector being a state subject, the adoption of the RERA regulation by the states was key to its success. The adoption of RERA by almost all states has been an achievement.
The completion of five years of effective implementation of RERA reveals the extent to which it has been able to achieve its objectives.
In a survey by JLL on the implications of RERA, residential sector sales and launches improved once the new process was in place and all stakeholders were aligned with changes made by RERA.
It led to improvement in accountability which brought financial discipline to the sector. This has been reflected in a shift in the capital flows witnessed by the sector. The escrow mechanism introduced by RERA led to the proper utilisation of funds.
The increased home sales led to improved cash flow for developers and reduced dependence on institutional capital funding needs. Thus, the overall impact has been improving the financial health of the sector.
The journey of Indian real estate towards building trust has been quite challenging. The lower capital commitment towards the sector despite its growth potential was primarily due to a lack of trust among its stakeholders.
The sector witnessed its first steps towards building trust to attract capital by opening the sector for foreign direct investments (FDIs). However, the global financial crisis (GFC) snapped the journey, and it took a while for the faith to be restored.
The mandatory registration of projects under RERA brought much-needed uniformity in collating information essential for homebuyers.
The registration of projects reflects the trends in the residential sector as is evident from the lowest registration during the pandemic year 2020.
The state-wise analysis of the registrations indicates that few states account for a large share of registrations
Indian states with key metros account for a higher share of registrations as evident from the top 6 states. The NCR Delhi comprises three states and one union territory and hence the registration is divided among its constituents.
Separate rules were made for the registration of agents as homebuyers rely on the information shared by the agents.
One of the important pillars of the RERA regulation was grievance redressal.
Homebuyers who suffered due to incomplete projects, project delays, layout alterations, additional charges, false promises, and one-sided home-buying agreements were looking for justice.
The success of the system can be gauged from the fact that the cumulative cases disposed of by various RERA authorities have witnessed a sharp rise annually. The cumulative number of cases disposed increased sharply from 18,543 as of 2019 to 106,428 cases as of January 2023.
The adoption of RERA by 27 states and 8 union territories in the last five years has been the first successful step in its acceptance at a national level.
Ever since the RERA has been implemented in various states, close to one lakh projects and 71,514 agents have been registered to date while over 1 lakh cases of consumer disputes have been resolved.
I have inherited immovable property in the family including agricultural land. Is there any prohibitory regulation to hold such properties as I am an OCI with business interest in many countries? Please advice. Praveen Murali, Sharjah.
No. Of course there are restrictions for NRIs and OCIs to buy agricultural land, farmhouse and plantation property. However, specific cases like yours can be represented to the RBI to obtain approval to hold inherited land.
What is the procedure to obtain a legal heir certificate for the immovable property left by my parents in Goa as there is no consensus among siblings in the family? Please advice. Roy Johnson, Dubai.
You can apply for legal heir certificate to the Tehsildar of the concerned area where the property is located. You will have to include details such as the name of the deceased, date of death along with a copy of the death certificate obtained from appropriate authorities. There is a need to mention details of persons who were legal heirs at the time of death with their contact addresses.
The Tehsildar may conduct an enquiry and will issue a consolidated certificate for the heirs succeeding to the estate.