RERA to keep corrupt builders on a tight leash in Punjab

CHANDIGARH: Amid high expectation from the new Congress government to give a fillip to the real estate sector, Real Estate (Regulation and Development) Act, 2017 ( Rera) would not just insulate buyers from unscrupulous promoters, but may also change the demand-supply equation with a section of small builders falling out of business.

While July 31 has been fixed as the deadline for implementation of Rera, Punjab is still in the process of setting up the authority under the Act and may extend the last date for registration.

Meanwhile, it notified the Act on June 12 and launched a portal for online registration. However, only a couple of applications have been received so far.

Real estate experts point out that where the supply of dwelling units is far more than the demand, it could witness a change at least during the initial few months after the Act comes into effect. However, there is still uncertainty over it effecting a price rise.

Property agents in the region are, meanwhile, divided over the impact of RERA. "Supply will reduce because developers will now launch only those projects which they are likely to complete within the promised timeframe.

Besides, they will not be able to divert funds from one housing project to another. But benefits of timely possession and lesser fleecing of buyers could attract them to buying property, thereby increasing demand to some extent," said Amarjeet Singh Aurora, a Patiala-based property consultant.

On the other hand, Kamal Tewari, a property dealer operating in Aerocity, Mohali, said the new rules will have little impact on property prices as the focus was more on ensuring that unscrupulous builders do not cheat unsuspecting buyers. "Brokers who indulge in pre-launch sales, which has been one of the most common phenomenon, will be affected. Any false representation in a certain quality or service will invite per day penalty," he said.

Additional chief secretary, Housing and Urban Development, Vini Mahajan was not available for comments but officials in the department said that as an incentive, the Punjab government will withdraw the annual increase applicable to various charges/fees deposited by the promoters.

Under RERA, the promoter would be liable to deposit, in a nationalised bank, 75% of the total money collected from consumers. This amount can be withdrawn only after the submission of the utilisation certificate.