‘MahaRERA has restored confidence of buyers’

Rashmi Pratap Mumbai | Updated on April 29, 2018


Registration of over 16,000 under-construction real estate projects, resolution of more than 1,200 consumer complaints, penalties for non-compliance, and GPS-enabled search for that dream home – these are among the achievements of Maharashtra Real Estate Regulatory Authority (MahaRERA) as it completes a year on May 1. Chairman Gautam Chatterjee is going all out to bring back buyers’ confidence in the sector where inventory is piling up and prices have been stagnant for the last three years. BusinessLine caught up with him to get the lowdown on what’s been done and what remains. Edited excerpts:

What have been your achievements in the last one year?

We were fortunate to start the processes on time. The first quarter was meant to bring into the fold all unfinished projects. We registered 10,800 projects and kept the window open beyond the stipulated time to get another 2,000 projects registered. So we were able to do what the Act contemplated – removed the information asymmetry. While taking applications, we knew there would be deficiencies as we are putting it onto digital platform and everyone will not be at the same level of digital proficiency. To get people from Wardha, Gadchiroli, or Kolhapur, who are not digitally proficient, to register was an achievement. And after registration, there are consumer complaints. It started in the middle of second quarter and is an ongoing process. We have over 2,400 complaints filed against registered projects, out of which over 1,200 have been disposed of.

Are you satisfied with the pace of complaints resolution?

Now we have reached a stage of sustainability as the number of complaints coming in and the number of disposals are more or less on par. If we can increase our disposal further and resolve them within 60 days as the Act stipulates, it will be another major achievement. Every time we pass an order and give relief, it gives a boost to consumer confidence because they know that there is a mechanism which delivers.

But this improved buyers’ confidence is not reflected on real estate sales yet?

It will take time. It is a difficult sector, which has been unregulated for long. It is a major employment generator and has gone through many ups and downs. You have to give it time to settle down. After one year, I feel satisfied that in Maharashtra, we have made sincere efforts in letter and spirit to implement the Act and will continue to do so.

What are the challenges you continue to face?

There are huge challenges. Of the more than 16,100 projects registered as on date, nearly 7,800 would not have been registered if they were completed on time. This translates into 8 lakh homes that remain incomplete due to a variety of reasons such as delinquency, court stay orders, disputes etc. Taking these projects to completion is a big challenge because a bank may walk out with a haircut but for a home buyer, it makes no sense. He invests his hard earned money in a home. While it is tough to solve each case, we are trying our best.

Is imposing penalty the way forward ?

Once you are registered, we believe you will continue to show compliant behaviour, failing which we have also to show our teeth – be it wrong advertising or anything else. But ultimately, a penalty sucks out money from the project. We just ensure that players now play as per the rules. If they don’t, the regulator will ensure the rules are followed.

Don’t you think there should be guidelines such as booking can be done only on completion of 50 per cent of the project?

The stage at which a project is registered, is also a stage where a builder has already invested a lot of money. Today, financial institutions don’t give money to buy land. If there is a regulation like that, only the big guys will be able to participate in the market. Then how will the smaller players, who are willing to do affordable housing, fund the project? People with professional expertise, who can do a job with lesser margins, is what we should look for. So I think we should not put those kind of restrictions. If approvals take place fast without much approval costs, then that is what we should look forward to as a nation.

How about regulating prices to check the unrealistic rates in certain locations?

Price regulation is not on the table today. Government regulating everywhere is not something I would subscribe to. It is a decision between two private parties and the market should determine the rate. If you correct distortion in the market, offtake will follow. Real estate prices have corrected, the government is not raising ready reckoner rates and RERA is here. Now any ‘buy’ decision is a good decision as I will take care of everything except rates.

Published on April 29, 2018

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