Track2Realty pan-India Survey
The Indians across the country don’t feel confident with the RERA that is supposed to safeguard their interests. In a pan-India survey by Track2Realty the consumers feel RERA has allowed the defaulting builders to get away with the faultiness.
Despite of euphoria among the sections of stakeholders along with the government and media asserting that the RERA (Real Estate Regulatory Authority) would change the fortunes of Indian real estate, the on-ground realities have not changed for the home buyers. Track2Realty tries to find out the reasons through a comprehensive survey across the country.
“RERA is like the battle of 1857 and definitely not what the homebuyers across the Indian cities were waiting for. It may help those who would fight for a level playing field in 1947 but as of now in the battle of 1857 this weak piece of legislation is nothing more than a future promise,” says a dejected homebuyer, Rehman Sheikh in Mumbai.
It is not an outburst of one home buyer who is cut off from the on-ground realities of the Indian housing market. The fact of the matter is that most of the home buyers across the key Indian cities are disappointed with the fact that the much talked about and anticipated RERA has not changed their on-ground experience.
Facts speak for themselves: Projects worth INR 4,64,300 crore for a total of 575,900 units are already significantly behind schedule. These 5,75,900 units have been stuck since 2013 or before. However, what is even more disturbing than these staggering number is the fact that in many of the states RERA has been diluted to the extent that it allows the erring developers with the existing projects to get away with the fault lines.
For example, in Lucknow Ansal API project launched in 2006 with 3 years delivery timelines has now revised the delivery deadline to 2023. The fact is that in Uttar Pradesh (and many other States) the developers have given arbitrary fresh completion datelines in RERA registration to escape penalties. In Karnataka all projects that are completed by 60% or more have been exempted from RERA purview, thus allowing nearly all long stuck projects to escape.
Similarly, in Mumbai a Chembur project has extended the delivery date from December 2017 to 2022. Mind you! These are not small time builders but prominent ones who are escaping with ease and flouting all norms & ethics.
The buyers allege that the contract has a different date while the date submitted to RERA has a different timeline of project completion. In another instance, the deadline for a redevelopment project in the eastern suburbs of Mumbai has been pushed back from 2017 to 2022.
In another such blatant violation of RERA a developer in Bandra (E) of Mumbai has taken the extreme liberty of timelines extension to give the fresh possession date of 2025 although he had started the project in 2010 and had promised delivery in 2014.
In most such cases the developers have extended the completion dateline with RERA registration that is not only violating the Builder-Buyer Agreement but also could not be termed as reasonable completion dates. Some of these projects are even 90% complete. But RERA is nowhere in the picture to raise objection while the buyers are objecting it tooth and nail.
It is hence no wonder that the RERA fails to evoke confidence of the home buyers. In this pan-India survey by Track2Realty, the vast majority of Indian consumers, as many as 82%, maintain that ground realities have not changed in the property market.
“I often come across property experts who maintain that perception against RERA exist because of pre-RERA days. But my point is why has it allowed to go pre-RERA defaults unpunished. If RERA will continue to allow defaulting builders to give arbitrary deadlines, then I don’t think it will gain ground in terms of buyers’ trust,” maintains Mihir Verma in Noida.
The fact lies that RERA provisions have been diluted by both the Center and the States. There are instances of mismatch in developer’s agreement of sale and RERA timelines. There are other developers who commit a certain longer timeline of project completion with RERA but commit to buyers that it is just to be legally safe. They continue to promise early timelines on booking.
The homebuyers across the country, as many as 78% Indians, maintain that RERA was expected to be due diligence for the gullible home buyers. Unfortunately, RERA is confused with its role as to whether to act as the watchdog or investigating agency. Today, RERA acts only when the complaint is filed by the aggrieved homebuyers.
These are the findings of a pan-India survey by Track2Realty. The survey was aimed at assessing the awareness level of the Indians vis-à-vis RERA and understand as to what extent has the new legislation brought change for them on the ground. The survey was carried in 20 cities – Delhi, Gurgaon, Noida, Ghaziabad, Chandigarh, Amritsar, Mumbai, Pune, Kolkata, Bhopal, Raipur, Lucknow, Jaipur, Bhubaneswar, Ahmedabad, Bengaluru, Hyderabad, Chennai, Kochi and Coimbatore between November 1 and November 20, 2018.
A structured set of questions that was based on the awareness level of RERA, market perception & realities, litigation issues, project delays & delivery timelines and on-ground experiences of home buyers was given to the respondents. They were mostly buyers of residential properties and only some of them were buyers of the commercial properties. The survey tried to capture the minds of the Indians who are active in the property market and for whom RERA is supposed to act as the safeguard.
Survey Highlights
82% Indians think there is no change in property market post RERA
78% home buyers are confused with RERA acting as watchdog
58% feel there is no fear of RERA
62% find RERS functioning without support infrastructure
78% buyers crib RERA not final litigation
Trust deficit with RERA as high as 80%
82% Indians maintain misleading sales continues after RERA
For 84% home buyers RERA not ensuring timely delivery
90% question why RERA can’t tame government agencies
A substantial number of buyers, as many as 58% even maintain that the developers have the audacity to challenge the competence and powers of regulatory authority. There is no fear of RERA other than some paperwork to be legally safe.
“I don’t think there is any fear among the builders as far as RERA is concerned. The developers are just playing it safe with the paper work, even though on-ground practices and the customer interface remains the same. Developers are even today forcing the buyers to sign an undertaking before possession for future amendments. How many of the buyers can refuse it and fight a legal battle for years?” questions Sunanda Poddar in Gurgaon.
Even among the buyers who are not questioning the intent or authority of the RERA, a substantial number, as many as 62% maintain that RERA officials don’t have infrastructure to verify the documents of builders.
“For RERA to function the way it has been envisaged you need to have not only the powers but also the infrastructure support. For example, with RERA all project details upload by developers are scanned with 150 DPI. It is just not readable for the average home buyers. Unless someone files a specific complaint against a specific project, RERA officials don’t have infrastructure support to cross check and reject such uploads,” opines Kaamini Jaiswal in Chennai.
The real problem, as close to eight out of 10 home buyers feel (as many as 78%) is that RERA is not their last mile litigation point against the builder. If the builder wants to contest with all his resources, then one has to keep fighting from the RERA office to Appellate Tribunal and Supreme Court.
“We all know who has better resources to contest it legally. It is quite routine affair for the legal office of the builder while for a harassed homebuyer it would be a drain on financial resources and time management would also be challenging for the working class,” says Prateek Mehta in Ahmedabad.
Even more in number, as many as 80% are clueless as to how various rulings of RERA are not in sync with the apex court of the country. Moreover, RERA in various states have taken different view on the similar nature of the case.
“Even my lawyer is confused with some of the clauses of RERA in its various judgment. For example, the Supreme Court of India says parking in a housing project can’t be sold but Maharashtra RERA in a judgment says parking charges have to be shown separately in the cost,” wonders Swati Maheshwari in Mumbai.
Marketing channel of the developers with all the unsubstantiated claims is something that makes more than eight out of ten, as many as 82% home buyers question its effectiveness.
“A developer that is not listed continues to make claims of thousands of units sold worth hundreds of crores. This is to entice the new set of buyers but in the process the developer is not only making misleading claim but also violating the new accounting standards mandated with IND AS 115. But RERA is not even questioning it,” objects Rachit Sharma in Noida.
Most of the home buyers believe that RERA’s role is limited in project delivery if the developer defaults and is ready to go to jail. 84% believe RERA cannot ensure timely delivery of flats, if the developer is not conscious of his brand reputation and future projects.
The most important issue that most of the conscious Indians are asking, as many as 92%, is that whether RERA can instruct the government officials if the government offices are behind the project delays.
“We all know how sanctions and approvals take so long time. This is where corruption creeps into the system. Even if there is provision of deemed approval, these officials can raise questions a day ahead of the stipulated time; thus, giving another round of 30-45 days. RERA must have the authority to make government officials accountable and frame charges, if necessary,” says MK Andrews in Kochi.
METHODOLOGY
The survey demography belonged to a mix of property buyers and the majority of them were buyers of residential properties. Only some of the buyers were into commercial property. The respondents were mostly first time buyers and many of them had the first hand experience of some sort of exploitative behaviour of builders. A substantial number of them had waited long enough for possession of the house and were confused as to how would RERA help them.
A large sample size of 10,000 respondents (500 samples in each city) was targeted. Out of these only 8424 samples were finally zeroed down and considered for analysis. Rest 1526 respondents were not considered for evaluation since they either gave incomplete answers, contradicted their responses or were rejected for non-seriousness of their choices & concerns. The total sample size had 54% males and 46% females as a representative set.
The surveying method was one-on-one interviews, in which the researchers explained the theme and purpose of the survey. The results were based on a set of 25 open-ended & close-ended questions and the answers were grouped into five key factors of awareness level of RERA, market perception & realities, litigation issues, project delays & delivery timelines and on-ground experiences of home buyers.
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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