- CREDAI asks the PM, finance ministry & RBI to mediate the facilitation of the new law
- The lack of synchronization in implementation of the act between state authorities has led to a disparity in registration of real estate projects, resulting in delays and having negative implications on all stakeholders
New Delhi, 17th August, 2017: Confederation of Real Estate Developers' Associations of India (CREDAI) today requested the Prime Minister of India, Shri Narendra Modi, to intervene in a bid to facilitate the successful implementation of the Real Estate Regulation & Development Act (RERA) in the country. Having fully welcomed and supported the revolutionary law, CREDAI seeks more clarity on various aspects such as the definition of an ‘ongoing project’ and requests for expedition of processes from the state and central authorities. The lack of an appropriate infrastructure and notification of RERA rules has also led to majority of developers not being able to register their projects on time, leading to delays and a loss of revenue for the state and central governments as well.
In its letter addressed to the PM, CREDAI recognizes the act as a game changer for the industry which will protect the interest of the consumers, but points to the negative implications it has had on several stakeholders on account of the delay in notifying the different provisions of the law –
• A large number of states today have not yet appointed a regulator, while some appointed the same only recently. This hasn’t allowed the developers enough time in registering their projects with the Authority leading to their increasing difficulty in adhering to delivery timelines. This has a direct impact on the consumers since they continue losing money, in the form of EMIs on the home loan and paying for a rented accommodation.
• Banks and Financial Institutions have stopped funding unregistered projects which has led to a shortage of funds and an eventual blockage of cash liquidity in the system. However, there is no legal support in place for this stance taken by them. This move further hampers the developers in completing their projects which means delayed possession to customers who have taken loans, pushing them into financial distress.
• The interest of foreign investors will soon shift to the regulated markets while unregulated market face a lack in the same leading to decline in the Centre and the States’ revenues.
• Real Estate allied industries are witnessing a drastic reduction in demand due to the abandonment of numerous on- going projects, which is also leading to the large scale unemployment of the majority of the 50 million workers operating in India.
Speaking on the subject, Mr. Jaxay Shah, President, CREDAI National, said, “While Real Estate Regulation & Development Act (RERA) is bound to enhance the level of ease of doing business, it has experienced some teething problems owing to the delays in processing the different provisions of the law by the state authorities. To make matters worse, banks and FIs have stopped sanctions and disbursements of housing and project loans to real estate which will negatively impact delivery timelines and adversely impact allied industries and workers. It is absolutely imperative, therefore that appropriate guidelines be issued to resume sanctions and disbursements for housing projects.”