New Delhi, December 19, 2016: “It is a good thing that the government has finally released the draft rules for RERA. This will help reduce the uncertainty for new projects. For new projects, the transparency and the protection for customers will usher in a new era in the real estate development industry. As a professional developer, we are delighted that these high standards of transparency and customer service will now be the norm for the industry. Further, the 5 year warranty is now a mandatory for all projects and this will lead to a better quality for customers.
While it is a good thing that ongoing projects are covered under RERA thereby providing relief to many home buyers, the need of placing 70% of funds in separate account for ongoing projects is likely to cause a great problem for home buyers. In these projects, the developers have followed the practices that were on going in the past. As a result, the percentage of amount collected is in excess of percentage of work done as defined in the rules. It means that developers will not be able to use any of the money that comes from customers towards the cost of construction till such time as the construction percentage equals the collection percentage. While this is good in theory, the reality is that many developers do not have access to capital and the government has not addressed this issue at all. As a result, many more projects which are under construction are likely to get stalled for want of capital and as a result the exact reverse of the government subjective will happen.”
Corporate Comm India(CCI Newswire)
