Real estate developers find difficult to comply with the norms, the consumer-friendly Real Estate (Regulation and Development) Act has put the real estate sector in a dilemma. Unless the realtor registers himself, uploads the mandatory project details and opens an account he can not publicise about the project or appoint agents. Realtors being small and medium in the non-corporate sector, they find many difficulties to comply with the norms, CREDAI Visakhapatnam Chapter president Peela Koteswara Rao expressed. About 90 notices had been issued to register by October 10, the last date.
The Act brings small and medium builders in the unorganised sector and high-end players under it and the former find it difficult to comply, he says adding the new Act cannot be implemented by issue of notices but the process should be simplified and made easy.
Duly providing the remaining statutory information the real estate developers will upload other details like his warranty and guarantee the equipment and material he uses and project completion period onto the website which can be treated as ‘Form B,’ Mr. Koteswara Rao suggests.
‘Encourage new players’
By the time of uploading itself, the developer has to invest up to 60 % if the site is purchased outright and 30 to 40 % if it is on a development basis.
The government is providing many incentives to start-ups but real estate which generally functions on the lines of start-ups by mobilising support for projects, he points out.
The developers have always been working in a start-up mode by mobilising resources on their own. But RERA regulations are working the other way.
To encourage start-ups and transparency, after the issue of the provisional certificate developers should be allowed to raise investments for the project.
To prevent the possibility of misuse of funds, escrow accounts should be opened so that the money is spent on the project properly, he suggests.
There is no escrow account in the RERA rules and those already in the business use dedicated accounts, he contends.