“Real estate regulators in India face transparency issues, non-compliance, and pre-2016 project challenges, hindering effective implementation of regulations”
Despite the Real Estate (Regulation and Development) Act coming into effect in 2016, state regulators in India continue to grapple with various issues, hindering the smooth functioning of the regulatory framework. Anita Karwal, chairperson of the Gujarat Real Estate Regulatory Authority, highlighted significant challenges at the National Real Estate Development Council’s 16th convention in New Delhi on February 2.
The predominant problems, according to Karwal, are related to projects initiated before the enactment of the Real Estate Act in 2016. Developers’ lack of transparency, non-cooperation, and compliance issues make it challenging for authorities to address and resolve issues efficiently. Karwal cited an example where out of 900 cases, about 880 developers were unaware of the proceedings, as many companies had hired mediators to handle the cases.
Redevelopment projects that currently do not fall under the purview of RERA were also discussed as a potential concern. Major redevelopment projects, like the Dharavi slum rehabilitation project in Mumbai involving one million people, are exempt from RERA as they don’t involve the sale of houses.
Another issue raised was the non-compliance of developers with the transfer of land titles, particularly in projects in Karnataka. Cases were reported where authorities had to intervene to instruct developers to transfer common areas of projects to homebuyers.
Experts suggested that state governments should enact compliance laws to enforce the execution of orders from regulatory authorities. In a positive development, the Odisha Apartment (Ownership and Management) Act, 2023, was cited as an example, defining the ownership of an apartment and the use of common areas and facilities.
Pradeep Kumar Biswal, a member of the Odisha Real Estate Regulatory Authority, highlighted the challenge of timely execution of orders due to RERA’s limited powers as a quasi-judicial body. He stressed the need for a more efficient interface between local authorities and RERA to expedite case resolution.
Kaushal Kishore, Minister of State for Housing and Urban Affairs, urged the construction and real estate sector to avoid underquoting prices during the bidding process for government projects, emphasizing the negative consequences of incomplete projects and escalating costs.
Housing and Urban Affairs Secretary Manoj Joshi encouraged states to increase property tax, incentivizing them for housing and affordable housing projects. The central government is actively supporting this initiative, anticipating progress as it aligns with the 16th Finance Commission’s considerations for future allocations.
In response to the challenges discussed, NAREDCO (National Real Estate Development Council) President G Hari Babu assured the government of the organization’s full support in urban planning, leveraging its expertise and experience to address the issues raised during the convention.