Views of Mr. Abhishek Lodhiya (Sr. Equity Research Analyst - Infrastructure, Capital goods and Real Estate, Angel Broking):
"Maharashtra will be first state to implement RERA (Real Estate Regulation & Development Act) and rest of states will soon join the league. Real Estate was earlier considered to be informal pro-developer & pro-investor sector with no regulatory body in existence. Even though RERA is more end buyer centric but it will bring in the good days for the developers too. With RERA getting implemented developers & real estate agents will get into scanner and bring in the much required transparency in the system. Although first impression of RERA was that it's more end buyer friendly but its blessing in disguise for the organized and clean developer in the space. RERA required enrolment of the developers, agents, projects, submission & disclosure of all project related document like approved design, land acquisition document and even project status on the regular basis will automatically create the brand equity for the developers and will also help them to raise funds at lower rates.
Earlier end buyer was uncertain to get delivery on time but with RERA coming in developers need to put 70% of collection from project in escrow account for better execution and timely completion. In case of delays and failing to adhere to the regulation developer will be penalized. Notably switch from build-up to carpet area will give clarity of what actually buyer will get and developer cannot temper the offered design otherwise will attract penalty too. Last but not the least the parking area needs to be clearly mentioned in the agreement. Largely RERA will safeguard the buyer's interest also change in buyers perception towards developer will lead to fasten the buying decision and will reflect in the developers sales figures coming financial year."