Do You Have RERA Compliance Queries?

Complying with RERA provisions requires greater level of transparency, objectivity and professionalism, as it has enhanced the accountability and liability of real estate developers, property consultants etc. Therefore it is essential for real estate organizations to put in place a structured RERA compliance management process Developers need to streamline their processes, form teams and train employees on the new regulatory provisions. . However there are lots of confusion regarding RERA compliance by real estate organizations. On the other hand, NIREM with the mission to empower the Indian Real Estate sector is working to make the regulation as simple as possible.

If you are a real estate promoter or a professional into or planning to join the RERA compliance team and have any query regarding the RERA compliance, please send us your queries to info@nirem.org. Our Regulatory Compliance Expert Mr. Sumit Jha would respond to your queries. Please mail specific and relevant queries by 30^th April, 2017.

Developers scramble for Real Estate Act compliance: Hindustan Times

The year 2017 will be significant for homebuyers harassed for years because of property sale agreements lopsided in favour of developers, violation of building rules and delayed home delivery. The consumer-friendly Real Estate Regulatory Act (RERA), which kicks in from May 1, has pushed developers to sign agreements with buyers and take other initiatives which they claim are RERA compliant.

Mr. Sumit Jha, CEO, NIREM says that developers are putting up special RERA compliance teams to monitor projects and ensuring timely completion of projects, training sales professionals on customer interface post RERA and upgrading their agreement to sell. Read more at http://www.hindustantimes.com/real-estate/developers-scramble-for-real-estate-act-compliance-but-buyers-remain-sceptical/story-ixAlP94x4d8ZnFiHJJ2bpL.html

Indian realty industry to almost double to $140B by FY17

BY  Pooja Sarkar, VCCircle

The industry, which had been growing at around 8 per cent annually during 2009-11, saws a 6.5 per cent deceleration in 2012-13.

The Indian real estate industry is expected to grow to approximately $140 billion by FY17, said a research report on real estate released by advisory firm Ernst $ Young and industry body FICCI. The report said, according to industry estimates, the size of the Indian real estate market was close to $78.5 billion in FY13.

Niranjan Hiranandani, chairman of FICCI’s real estate committee and managing director, Hiranandani Constructions Pvt. Ltd, said, “Mumbai urgently needs change of infrastructure with the support of government and also reforms in taxation, with 34 per cent of cost of an affordable house going out as taxes.”

The realty industry, which had been growing at around 8 per cent during 2009-11, saw a 6.5 per cent deceleration in 2012-13 primarily due to the sluggish domestic growth, rising input costs and negative global economic sentiments.

The sector’s major growth driver has been the pumping of capital through foreign direct investment (FDI) route. Between April 2011and July 2013, the sector attracted FDI of close to Rs 100,000 crore. The report, however, said the volume of FDI into the sector has been declining.

Even for private equity funding, the sector saw its peak in 2007 when $6.8 billion came in. In 2012, the industry attracted $1.7 billion from limited partners in realty projects across the country, as per the report.

For the first half of the current calendar year, the realty industry has seen investment of close to $1.4 billion and industry experts indicate that this year would be one of the better years compared to last four years.

With negligible sales and developers’ reluctance to bring down prices of properties, even banks’ credit exposure to the real estate and housing sector declined from 10 per cent as a percentage of gross bank credit in FY10 to 7.9 per cent in FY13. While bank construction finance continues to be the cheapest source of funding, another instrument which has caught attention of developers is raising money through non-convertible debentures (NCDs). Reflecting this trend, NCDs worth $4.2 billion were issued in 2012 compared with $3.8 billion in 2011.

The realty industry recently witnessed a few big-ticked buyout transactions in commercial office space by private equity funds. Over the last three years, it has attracted investment of $1.14 billion in commercial office space portfolio development.

(Edited by Joby Puthuparampil Johnson)

Delay Hit Home Buyers to Take Legal Action against DLF after CCI Order

At a time when the Anna wave has enthralled the entire nation, capturing imagination and consciousness of millions of Indians to protest against corruption and injustice, real estate - one of the sectors perhaps most vulnerable to fraudulent practices - is facing the wrath of aggrieved buyers. Encouraged by an order of the Competition Commission of India (CCI) against DLF, the largest realty developer, home buyers hit by project delays and sudden change in building plans are considering legal action either through courts or the CCI. 

Lawyers in Delhi, Mumbai, Bangalore and Kolkata have been approached by people whose dream homes remain a distant dream as real estate developers keep postponing projects and missing delivery deadlines. The CCI order has come as a huge boost to those looking for relief as some have decided to move the courts or the CCI, while some others are weighing the options, said lawyers. Law firms have started receiving queries from consumers on how they could seek intervention of the CCI against developers.

The competition watchdog on Tuesday slapped a penalty of 630 crore on DLF for taking undue advantage of its dominant position in the market. The commission found DLF guilty of commencement of residential project The Belaire in Haryana’s Gurgaon without approvals, increasing the number of floors mid-way through the project, delay in project completion, and forfeiture of booking amount of some buyers.

Customers at Kolkata West International City, an integrated township project spread over 400 acres in the capital of West Bengal, are thinking of approaching the CCI, as the project is far behind its delivery timeline. Even the first phase of the project, scheduled to be delivered in 2008, is yet to be completed.

“We did not move court till now because we did not want to get into legal complications. Not even consumer court because the flats are not yet ready. Some of us who have been given possession letter have approached consumer court but a verdict is yet to be out. On the contrary, we have approached West Bengal government seeking their intervention in the subject. Now, we and our lawyers plan and take a call on approaching CCI in a week’s time,” said KWIC Buyer’s Welfare Association president Abhay Upadhyay. The project, which is a mix of housing and commercial establishments, is being developed by the Salim Group of Indonesia and the Universal Success Group of Singapore, with support from the Kolkata Metropolitan Development Authority.

In a similar such instance, a home buyer Shahnawaz Deriya, along with a group of customers at residential project Sagar City in Andheri suburb of Mumbai, has been fighting for over a year against the builder Cordcon Constructions for delay in delivery for four years. The group has already filed a case in the State Consumer Court, but is now seeking legal opinion to get the intervention of the CCI against the developer. “Yes, we are handling few inquiries that have come after the CCI’s order on DLF,” said H Jayesh, Founder & Partner at law firm Juris Corp.

CCI pitches for regulatory framework for realty sector

The Competition Commission of India (CCI) today said the Centre as well as state governments should come out with regulatory framework for the realty sector to protect consumers from unfair trade practices.

"The absence of any single sectoral regulator to regulate the real estate sector in totality, so as to ensure adoption of transparent and ethical business practices and protect the consumers, has only made the situation in the real estate sector worse," said CCI in an order against DLF.

The CCI has imposed a hefty penalty of Rs 630 crore on the realty major for abusing its dominant market position on a complaint by 'The Belaire' association in Gurgaon.

At the time of ordering investigation by the director general against DLF last year, CCI had also decided to probe the practice in the real estate sector on the whole.

Realtors issue advertisements for launching projects without the land in question being actually purchased or registered and without taking prior approval of competent authorities, CCI said.

They also do not specify the total area of the plot/flat/house indicating clearly the carpet area and utility area, nor the date of delivery and consequential remedies available to the consumer in case of delay, it added.

"The commission, therefore, makes a strong recommendation to the central government and all state governments to come out with real estate regulations at the earliest for ensuring overall consumer welfare and to discourage unfair trade practices that seem prevalent in the sector," CCI said.

It also said the amount collected from the allottees against a particular project is not deposited in a designated escrow account and utilised only for the construction of the concerned building.

Besides, the information relating to the progress of works and status of account of each allottee is not made available to buyers in a transparent manner.

Also, realtors build in hidden costs, other than the initial set price and do not make relevant information public.

CCI said there is often inordinate delay in execution of the project and if the project is delayed without previously agreed valid reasons.

The CCI, which became fully functional in May 2009, draws its power from the Competition Act 2002 to check anti-competitive practices and abuse of dominant market positions. 

Source: PTI, New Delhi, Business Standard