New Delhi, August 11, 2018: Buying a house is the dream of every person. However, in the recent past, customers have faced major problems with realty developers.
The real estate market in India suffered a huge blow after theaccountability of various developers was put under questioning. Almost 1 million residential properties, across eight metropolitans have either not been sold yet or not handed over to the buyers.
Two years ago, RERA, Real Estate (Regulation and Development) Act, was introduced to safeguard the investment of buyers in upcoming projects. While it has ensured this safety net to a certain extent, buyers remain vulnerable in a scenario where the developer files for bankruptcy.
Keeping that in mind, the Supreme Court made an amendment to the Insolvency and Bankruptcy Code (IBC) and shifted the control balance towards homebuyers. This amendment has placed them in the league of banks and homebuyers are now also equivalent to financial creditors for realty developers.
According to Nitin Agrawal, Vice Chairman of CREDAI, this is a great initiative by the government.” The biggest advantage is that these changes promote a sense of transparency between the involved parties, since buyers can hold builders more accountable.This increases customer confidence and promotes investment, which will further help in restoring the condition of Indian real estate,” he says.
Even though these changes are in the right direction, there are unaddressed loopholes in IBC. If a company is in the process of insolvency, it is the responsibility of the home-seeker to prove their creditor category and agreement with the company.
On the legal changes made by officials, the Swadesh Builders Bhopal MD expressed his support as it would increase the faith of customers in the real estate market. ”Home buyers have breathed a sigh of relief as they witnessed the Indian government and the Supreme Court working in alignment with their ideology. They firmly believe that the remaining shortcomings will be addressed swiftly by the concerned authorities,” he says.
The combination of IBC and RERA has placed adequate restrictions to minimize builder incompetence in any manner. Such decisions will prove instrumental in reestablishing the trust of customers in real estate and encourage them to invest in future projects.
Corporate Comm India(CCI Newswire)