On the 7th anniversary of RERA (Real Estate Regulatory Authority), a couple of media survey finds that the satisfaction of home buyers with RERA is abysmally low. There is a general perception among the home buyers that RERA is not as effective as the consumer courts.
As RERA (Real Estate Regulatory Authority) is close to its 7 years of completion, the home buyers across the nation have more to complain than compliment with what was supposed to be a game changer legislation. The buyers rather question as to RERA has been enacted to serve whose purpose. Most of the home buyers across India’s top 10 cities point out that the ground realities have not changed for them. A vast majority of them feel it has opened another window of litigation and thus hurts than helps the buyers. Issues range from lack of transparency to accountability, and existing market realities to consumer interface.
The satisfaction index of home buyers with RERA is as low as 26% with more than seven out of ten having not-so-satisfactory experience in the Indian housing market after the enactment of the legislation. On the larger question of transparency, 70% home buyers feel RERA registered projects are not giving them more informed choices than under-construction projects of pre-RERA days.
These are the findings of a pan-India survey by Track2Realty, real estate think-tank group. The survey delved deeper into the consumer psychograph to understand whether RERA has eased their pains in the housing market. It was conducted across Delhi, Noida-Greater Noida, Gurugram, Mumbai, Pune, Ahmedabad, Kolkata, Bengaluru, Chennai and Hyderabad.
Another survey by Zee Business reports similar sentiments. In Zee Business survey, 60% buyers maintain false promises of builders is still a market reality. 78% buyers are dismissive about the timely justice under RERA regime. Only 48% buyers say projects are now being delivered on time. 55% buyers are of the opinion that transparency has not improved. More than half, 52% to be precise, crib that builders still are in commanding position to dictate terms.
Track2Realty survey findings are even more gloomy. Time & cost of litigation has shot up for no less than nearly eight out of 10 buyers, with 78% confirming to be so. RERA giving extension to housing projects baffles as many as 88% buyers. Execution of RERA orders against the builders is something that is a pain point for nearly all, with no less than 90% buyers maintaining so.
Survey Highlights:
74% buyers complain ground realities for buyers
70% feel market has not improved on transparency level
78% maintain no timely justice
88% buyers baffled with RERA extension to housing project completion
90% hurt with RERA orders not being executed
92% buyers demand Uniform Builder Buyer Agreement
88% buyers get to see BBA after having made payment
84% crib booking cancellation to be arbitrary
80% point out existing reality of pre-launches
86% question why RERA is not enforcing sales only on Carpet Area
80% expect RERA to take suo moto cognizance against malpractices
68% feel RERA adopts soft approach with builders
Disappointment with RERA maximum in Noida-Greater Noida region with 92% buyers not satisfied
Only 32% buyers call RERA ineffective in Ahmedabad
92% home buyers question the absence of Uniform Builder Buyer Agreement (BBA). Worse even, a vast majority of 78% buyers have been handed over BBA after having made the initial payment. Cancellation of booking, in the event of unfair BBA, is heavily loaded in favour of the builder with 84% saying builders demand 10-20% amount of the sales consideration (and not just payment made) to forfeit.
“I think RERA is just another window of time consuming litigation, which actually benefits the builder. Legalities apart, where RERA actually fails to serve its basic purpose is to tame the builders who continue to throw unfair contract in the face of the buyers. First, they give you BBA only after making the advance payment in the name of booking amount; then you find that the contract is arbitrary; if you question it then your booking amount is forfeited. I mean if RERA can’t take pre-emptive action, then we as middle class home buyers don’t have the might to get into lengthy & costly litigation. RERA is not a one-point litigation point,” says Raghav Verma in Greater Noida.
RERA was supposed to put an end to the unfair market practices. But in reality the watchdog rarely takes pre-emptive action, and is often too late in the event of builders’ malpractices. 80% expect RERA to take suo moto cognizance when builders start pre-launch sales. 86% complain builders are still advertising and selling Super Built-up Area and not Carpet Area.
The survey noted that the consumer disappointment with RERA is maximum in Noida-Greater Noida market with 92% buyers disappointed. Disappointment with RERA is reported least in Ahmedabad where only 32% buyers main RERA is ineffective to solve their grievances.
“If I have to run from pillar to post to first get justice with RERA, and then wait endlessly for its order to be executed, then how is RERA home buyers’ solution point? The fact is that RERA orders are not executed by the respective District Magistrates for years. And even if it is executed, the builder drags the buyers in further litigation. My question is what has RERA done to either make the housing market transparent or instil confidence in the home buyers’ minds,” says Ratna Suri in Gurugram.
What could be a matter of concern for the RERA members across the country is the fact that they are perceived to be adopting a soft approach towards the builders. About seven out of 10, as many as 68%, categorically say RERA has not been stringent with the erring builders. There is a general perception that in the name of giving a level playing field to both the parties, RERA rarely orders as harsh as consumer courts and levies only nominal penalty of MCLR (Marginal Cost of Lending Rate) plus one per cent.
Within the realm of organised and branded developers, the feeling is that of optimism. After all, they are ones who have set the best practices in the business. Abhishek Kapoor, Group CEO, Puravankara Limited maintains that RERA completing seven years marks a significant milestone in the real estate sector, underscoring its effectiveness in bringing about tangible changes on the ground. This landmark legislation has not only revolutionised the way business is conducted but has also elevated standards of transparency and accountability.
“RERA has instilled a culture of compliance and integrity for developers, fostering trust and confidence among homebuyers. Buyers now have the assurance of timely delivery, quality construction, and recourse in case of grievances. Reflecting on these seven years, we recognise RERA’s pivotal role in reshaping the industry, ultimately creating a win-win scenario for all stakeholders,” says Kapoor.
It could be debated as to what extent RERA has led to a better ecosystem in the Indian housing market. Of course, the story is different among the large & listed players. But the public perception at large is borne out of their experiences with the vast universe of the developers, against whom RERA as a legislation has not been effective. The larger question is how long will it take before RERA makes its presence felt to the home buyers who are still suffering and looking for a one-point effective & judicious remedy.
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless.
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