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‘74% home buyers unaware of RERA compliance check process’

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Under-construction skyscrapers. (File Photo: IANS)

New Delhi, April 30 (IANS) Around 74 per cent home buyers in India are unaware of the online process to check a realty project’s compliance status under the Real Estate Regulatory Act, a Magicbricks report said here on Monday.

“Seventy four per cent of respondents do not know that it is mandatory to check if the project is registered with the state Real Estate Regulatory Authority (RERA) and how to go about checking it on the RERA website,” said the Magicbricks Consumer Choice Poll.

“For a law which is aimed at protecting consumer interest and promote fair play in real estate transactions, this is a poor number,” the report said.

“States where the governments have been proactive and got the website and the machinery going have also seen a large number of consumers using it to check the legality of their project. However, since a large number of states are yet to get their act together, consumer awareness too is low,” said E. Jayashree Kurup, Head, Editorial and Advice, Magicbricks.

According to the report, Maharashtra and Madhya Pradesh were the first states to set up the RERA authority and concerned websites on May 1, 2017, when the law was completely enacted.

“Maharashtra’s real estate developers are registering their projects with RERA authority websites and mentioning the registration number in their advertisements. Where it is not followed, the RERA regulators have been penalising them and publishing the same,” it said.

On the other hand, in Gurugram, more than 150 projects are registered but due to unavailability of an operational website to verify the projects’ compliance claims, consumers cannot check approvals or completion status, as per the report.

“However, the authorities are now set up and consumers can either mail or physically visit the offices in Gurugram and Panchkula and get their problems and doubts cleared,” it added.

IANS

Analysis

Is your building earthquake safe? Probably not

Earthquake Resistant — Immediate Occupancy” in which the building may suffer some minor damage but there would not be any loss of life or property. “Rarely in the Indian real estate scenario buildings are designed to this category.

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Under construction buildings

Though earthquakes have wreaked havoc in many parts of the country, Indian real estate and infrastructure sector still has lots more to learn — and implement — to ensure the safety of life and property.

Although structural requirements and concerned technologies are incorporated in the building process, sector players say many modern technologies used worldwide are yet to be widely used in the country.

According to V.K. Gehlot, Director, National Centre for Seismology, “base isolation” and “dampers” are the major technologies to make buildings strong enough to resist seismic vibrations. But they are not widely used in India because of the cost involved and requirement of frequent maintenance.

Through base isolation, engineers decouple the building or the superstructure from its substructure which rests on ground, thus protecting the building during an earthquake.

Dampers on the other hand work as shock absorbers and minimise the magnitude of vibrations transmitted to the building from the ground.

The cost difference between a building with and without dampers is approximately Rs 350 per square feet, according to Major Sandeep Shah, Managing Director of Taylor Devices India.

The company is a manufacturer of earthquake-resistant equipment and he says “all developers” in the country are aware of the technology.

Shah said the company’s devices have been used in Terminal-2 of Chhatrapati Shivaji International Airport, Mumbai, lobby block building of Apollo Hospital, New Delhi, and New Udaan Bhavan at the Indira Gandhi International Airport, Delhi.

He pointed out that “at present none of the buyers are aware that by using dampers buildings can be protected and would remain habitable even after a major earthquake. That may be the reason why no one (buyer) is asking for such buildings.” But once they are made aware, Shah was sure they would want the technology in the building they are going to live in.

According to Aunirban Saha, Director (Marketing, Construction and Sustainability) of the Saha Groupe of Companies, “most of real estate projects are designed to the grade of ‘Earthquake Resistant — Collapse Prevention’ “. That means that in the event of a major earthquake, the building would not collapse and there won’t be any loss of life. However, the building itself would not be in a habitable condition and would need to be demolished and reconstructed, he explained.

The next higher standard is “Earthquake Resistant — Immediate Occupancy” in which the building may suffer some minor damage but there would not be any loss of life or property. “Rarely in the Indian real estate scenario buildings are designed to this category,” Saha added.

The highest category of structural safety is that of “Earthquake Resistant — Operational”. Under this, there would be no damage to the property or any injury caused to its occupants irrespective of the magnitude of the earthquake.

Saha said most developers go for the first category of “Collapse Prevention” as they find it more cost-effective. Most home buyers are not aware of earthquake-related safety grades, he added.

The higher structural grades, Saha said, made more sense in today’s market scenario for commercial real estate because such properties are preferred by big multinational companies.

According to Dikshu C. Kukreja, Principal Architect at C.P. Kukreja Associates, “all leading architects of India have the knowledge and skill about the technologies available to incorporate them in our designs and construction.”

Other than dampers, structural concepts such as bracing — where X-shaped braces strengthen the columns of the buildings — and couplers — where bars are joined together — help in absorbing movement during an earthquake.

Siesmologist Gehlot says that earthquake resistance should be enforced as a default, even for small structures. Today, when building a house, 95 per cent people do not bother about earthquakes. “Our usual way of construction is that we will give it to a mason and they will start constructing,” he adds.

All that needs to change, he emphasises.

By Rituraj Baruah

(Rituraj Baruah can be contacted at [email protected])

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One year of RERA: Tardy implementation restricts gains

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Photo Credit: Aparna Constructions

By Vinod Behl

Two years after the Centre notified the Real Estate Regulation and Development Act (RERA) of 2016 to empower and protect property consumers and make property transactions fair and transparent by regulating the sector, the sluggish and flawed implementation of the progressive act, has put a big question mark on the gains of RERA.

RERA was passed by both the houses of Parliament in March 2016 and on May 1, 2016 a majority of the sections of the Act came into force. Under this model Act, every state was required to set up its regulatory authority within a year (by May 1, 2017). And in the next one year, the states were mandated to make their RERA websites operational for the benefit of home buyers. Other sections were notified in April 2017 and on May 1, 2017 the full act became operational.

Today, two years after RERA became an Act, only 20 states have notified rules. What’s more, except for the states of Maharashtra, Punjab and Madhya Pradesh, which have permanent regulators, all other states are making do with interim regulators.

Under RERA, all developers need to register to launch projects, which get registered only after all necessary permissions and land for the project are in place. They are required to provide all the mandatory information to be up on the official website of RERA to help buyers take an informed decision about buying property.

RERA’s performance on this front is also dismal as 15 states are without an operational RERA website. Even on the functional websites, the projects information is either incomplete or questionable, with no way to check its authenticity. As a result of the weak and faulty implementation of RERA, home buyers are deprived of the gains and protection guaranteed under the Act.

Notwithstanding the criticism about flawed and slow implementation of RERA, this progressive regulation has helped in project execution and delivery, boosting demand and sales, in turn contributing to the revival of residential real estate, though the gains are limited.

As RERA takes root — along with low interest rates, stable property prices and the government’s loan subsidy for affordable housing — its positive impact is already visible. There has been an eight per cent hike in housing demand in Q1, 2018, compared to Q4, 2017. Home sales registered a 33 per cent rise in the top nine cities during this period. In fact, housing sales exceeded new supply by five per cent during the last two years.

It’s another matter that buyers have so far not developed complete confidence and prefer ready homes to avoid development risks. The preventive and penal provisions of RERA have made developers focus on deliveries, readying a good pipeline of completed homes for sale.

Besides various other factors, fund constraint has been the prime reason for large-scale delivery defaults. But RERA, aided by other key reforms like GST, FDI liberalisation, ease of doing business and demonetisation, have brought in much-needed transparency, fair play and financial discipline by regulating realty, in turn giving a boost to the confidence of global investors.

Statistics speak for themselves. PE investments witnessed 52 percent rise since 2014. PE investments grew 17 percent in 2017 to Rs 42,800 crore, as against Rs 36,590 crore last year, with residential realty attracting highest investment of Rs 15,600 crore.

RERA, besides empowering and protecting consumers, has put grievance-redressal on the fast track. It was following the enactment of RERA that a group of aggrieved home buyers could directly approach the National Consumers Dispute Redressal Commission (NCRDC), thereby bypassing lower consumer courts to ensure fast-track justice. It is also because of RERA that the government, development authorities and the judiciary have become pro-active in coming to the rescue of aggrieved home buyers of stalled projects.

The much publicised cases of Jaypee Infratech and the Amrapali Group are cases in point where developers are facing the ire of about one lakh home buyers. In both cases, the companies are staring at insolvency and the Supreme Court has come down heavily on the errant developers, saying it is committed to safeguard the interests of home buyers in terms of project completion and refunds.

Meanwhile, it is also the result of the pressure created by RERA that home buyers are set to get relief under the Insolvency and Bankruptcy Code (IBC) as the government plans an ordinance to treat home buyers as financial creditors to facilitate refunds.

Considering the pros and cons, RERA needs to cover a lot of ground for its effective implementation, in order to serve its desired purpose. And according to Dr Samantak Das, Chief Economist, Knight Frank India Property Advisory, in the current scenario, the sentiment that drives the purchase of residential property is unlikely to change. He may sound too negative. But one thing is certain: The patchy implementation of RERA has delayed the revival of real estate, especially residential realty.

Gautam Chatterjee, Chairperson of the Maharashtra RERA, the front-runner in the implementation of the Act, believes that this “transition pain of RERA” may last at least a couple of years. And Anuj Puri, Chairman of Anarock Property Consultants, sums up the scenario well, saying that although real estate recovery under RERA will be gradual, yet it will be extremely durable — and based on very sound market dynamics.

(Vinod Behl is Founder & Editor, Ground Real(i)ty Media, a real estate content consultancy. He can be contacted at [email protected])

IANS

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‘Commercial space leasing up at 11 mn sq ft in Q1’

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Photo Credit, Free Press Journal

New Delhi, April 30 (IANS) Leasing activity in the commercial real estate segment rose 18 per cent on a year-on-year (YoY) basis during January-March 2018, to 11 million square feet across the country, a report said here on Monday.

“Commercial real estate leasing segment recorded 11 million sq ft of pan-Indian gross absorption in Q1 2018, representing an 18 per cent YoY rise in demand,” said Colliers International’s report, “Asia Market Snapshot – Q1 2018”.

Colliers International Group is a global real estate services company listed on the NASDAQ.

The report further said the office market segment is becoming more organised with developers being strategic in their development plans and upgrading their office portfolios.

“About nine million square feet of new Grade-A office space reached completion across major cities in Q1 2018,” it said.

The report also observed that the residential property market in the country is on the path of revival and the commercial and warehousing sectors are likely to flourish in 2018.

“With the after-effects of RERA (Real Estate Regulatory Act) and GST (Goods and Services Tax) settling in, we are starting to see the initial signs of a gradual revival in the residential sector.

“A gradual uptick is being witnessed even in the sales numbers of some of the developers, who have a good track record of delivery over the past few years,” said Gagan Randev, National Director, Capital Markets and Investment Services at Colliers International India.

He added: “Demand is primarily being seen from end-users only. Grade-A commercial, quality retail (mall) space and warehousing continues to evince strong interest.”

IANS

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