Senior Vice President - Legal & Company Secretary, Mahindra Lifespaces Developers Limited
India’s real estate and infrastructure sector is a significant contributor to the national economy. Over the last seven decades, its journey of transformation and consolidation has been marked with several transformative trends, responsible for changing the country’s urban landscape.
The sector has come a long way, from the early years of unorganised development, implementation and funds crunch, to a planned, organised and transformative industry, spurring urban resurgence. Significant change began in the early 1990s, owing to liberalisation and after the National Housing Policy and the National Housing Board (NHB) were established. It was around this time that a proper framework, both legal and financial, was created to encourage the involvement of the private sector in housing, with the Government’s role changing from a provider to an enabler.
One of the biggest reforms undertaken in Indian real estate has been the implementation of the Real Estate (Regulation and Development) Act, 2016 (RERA).
In 2000, 100% FDI in construction development projects was introduced and over the last couple of years, we have seen initiatives such as ‘Amrut’ which aims to rejuvenate 500 Indian cities, the ‘100 Smart Cities Mission’ and ‘Housing for All’ being launched. However, one of the biggest reforms undertaken in Indian real estate has been the implementation of the Real Estate (Regulation and Development) Act, 2016 (RERA). The Real Estate Bill was passed in March 2016, with a few sections notified in May 2016 and the remaining provisions implemented in May 2017.
POTENTIAL HOME BUYERS MUST ASCERTAIN THE FOLLOWING ASPECTS OF THE PROJECTS THEY ARE INTERESTED IN:
The RERA seeks to improve transparency and accountability in Indian real estate, thereby protecting the rights and interests of home buyers. The key provisions of the Act include registration of projects with requisite approvals in place before the launch of any project, penalties for delayed delivery, 70% collection from customers to be mandatorily set aside for use in a specific project and a five-year defect liability period, amongst others. Consequently, home buyers are now in a position to make better-informed decisions. The mandatory disclosure of project details, including those of the promoter, land status and clearances means that consumers now have access to detailed project information at the time of booking.
At Mahindra Lifespaces, we believe that RERA will pave the way for a stronger and more robust real estate sector in India by bringing in greater uniformity in the processes followed by developers and removing the trust deficit between them and the buyers. We were, in fact, already compliant on many aspects of RERA pertaining to launch before approvals and our levels of preparedness for adherence have, therefore, been high. We also believe that RERA will throw up opportunities for investments in greenfield/brownfield real estate projects.
This is a good time for serious investors and end users to evaluate projects. While location and connectivity specifications, together with features, amenities and nearby social infrastructure should be considered, brand credibility and prior track record are equally critical, given the inherent advantages to serious players in the current regulatory environment.