Law On A Leash

Patchy implementation of the much-hyped RERA has meant that even a year after it came into force, the homebuyer is still vulnerable

- M.G. Arun

Sunita Sharma, 32, a communications executive in the Pune office of a large IT company, began house-hunting early this year. Before she found a two-bedroom apartment in the city’s Wakad suburbs, Sharma verified the credentials of the developer on the MahaRERA website, maintained by the Maharashtra Real Estate Regulatory Authority. Only once she was satisfied with the project’s details on the website, including the progress of construction, did she book her apartment, paying 10 per cent of the total price as stipulated by the real estate regulator. “It was important to verify the developer’s credentials since stories of buyers losing their money to unscrupulous builders abound,” says Sharma. She also benefitted from the two-year stagnation in real estate prices in Pune. “There is more supply than demand,” explains Sharma.

India’s real estate sector has traditionally been largely unorganised, coupled with inordinate delays in completion of projects and some unscrupulous developers using investors’ money to cross-subsidise projects or change project plans at will, leaving buyers in the lurch. The real estate market was also notorious for the high quantum of cash in transactions, often referred to as the ‘black’ component of the deal. Many investors would use their surplus wealth to buy property and sell at the opportune moment for a profit, often pushing prices to unaffordable levels for the middle class. Cases piled up in courts as buyers took on developers for not honouring commitments. All of this accorded the real estate sector an element of opacity and uncertainty.