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CREDAI’s Response to TOI on RERA

Letter to the Editor, Times of India

Your editorial of May 2 entitled “Subverting RERA” is premised on the concern for the home buyer and as such there can be no dispute with the concern. While the concern for home buyers is laudable, half-truths and falsehoods in the name of the consumer would only end up compromising the consumer interest.

First of all, it is simply false to say that real estate is ‘singularly unregulated’. Umpteen World Bank reports and the Government of India Committee under the Chairmanship of Dhanendra Kumar, Ex-Chairman, Competition Commission of India noted that India has one of the most cumbersome and lengthy procedures for construction permits. India has 34 procedures which take an average of 196 days for construction permits. India is ranked 182 out of 185 countries in ease of doing business on this score.

Secondly, RERA is an Act passed by the Parliament. It is a settled constitutional principle that no State Legislature can override a statute passed by the Parliament. Leave alone the State Government, even the State Legislature cannot undermine or ‘subvert’ RERA.

Thirdly, it is misinformation to allege that State Governments have diluted RERA. No state has diluted RERA. For instance, Maharashtra continues to operate Maharashtra Apartment Ownership Act, subjecting real estate to two competing legislation and there is no sign that they wish to repeal it.

Fourthly, RERA provides a three-month window for ongoing projects to apply for registration. Since Section 3 of RERA has been notified on April 21, 2017, the window of three months is available until July 20, 2017. Delay in setting up regulatory authority under RERA is not a matter of design by promoters of projects and actually hurts them as they get less time to apply for registration of ongoing projects.

Lastly, real estate is not a market where it must always be promoter vs. buyer. Faster permits, lower transaction costs, lower interest rates help both promoter and consumers alike. RERA is a part of institutional reform to strengthen the trust and confidence in real estate markets. As President of CREDAI, the largest organisation representing 11,940 members spread across 23 states and 170 cities, I wish to claim that we have been among the most vociferous amongst the supporters of RERA because we believe that honest and law-abiding real estate developers cannot be lumped with rogues eyeing to pocket the hard-earned savings of unsuspecting public. Cleansing real estate of the rogue elements is as much in the interest of promoters as the consumers.

Best
Jaxay Shah
President CREDAI