News: Rera well-equipped to deal with buyers’ plights, erring builders won’t be spared-13.02.2018
Rera well-equipped to deal with buyers’ plights, erring builders won’t be spared
The newly appointed chairperson of Gurugram bench of Haryana Real EstateRegulatory Authority (H-Rera), K K Khandelwal, has reassured that builders taking consumers for a ride will not be spared, to the relief of the lakhs of homebuyers in Gurugram — the massive real estate hub of Delhi NCR — who have been earnestly demanding a regulator for the real estate sector in the area.
Talking to TOI's Ajay Sura about his plans and ideas to regulate this sector in the NCR, where it has a reputation of being highly unregulated, Khandelwal clarified that the authority will not hesitate in exercising its powers, including suo motu ones, in launching investigations against builders who have tried to cheat buyers.
A 1985-batch IAS officer, Khandelwal, who has taken voluntary retirement from the civil services, was also of the view that with the real estate regulatory body becoming functional in Gurugram, financial institutions will have more confidence in lending to builders/developers on account of regulatory compliance. Of Haryana's total realty projects, 65% are located in Gurugram area alone.
Considering the importance of the real estate sector in NCR, what are your plans to regulate it?
Right now, the real estate market is highly unregulated. This has led to lot of practices in the sector which are not in the best interests of consumers. The challenge with any unregulated market is that over a period of time, a lot of fly-by-night operators enter it, and take consumers for a ride. Our plan is to find ways to protect the interest of consumers and ensure there is healthy competition in the market. The key to regulating an industry is the right amount of laws with 100% compliance, which entails implementing various government procedures, commitments made to the consumer as part of agreements and conditions set forth by Rera.
What are the major challenges you see in your assignment as Rera chief in Gurugram?
The first and the biggest challenge is to set up a regulatory authority from ground up. It involves assessing the needs of the industry and of consumers, and setting up an organisation which meets those requirements. We have to ensure the right kind of organisation structure, hire the best people in the market, have a good pool of lawyers and consultants in the panel and a robust IT system. Another critical challenge is to create an environment of trust and fairness, to give confidence to consumers and industry players.
Do you think Rera has enough provisions to deal with homebuyers' problems?
I strongly believe Rera has enough provisions to deal with large numbers of problems which homebuyers are currently facing. Any regulation has dual objectives of addressing the current issues in the market, and also ensuring that future projects /transactions are regulated properly.
The strength of a regulatory body is determined by its ability to implement conditions of regulations, and making sure the cost of non-compliance (financial or non-financial) is large enough for erring parties to not play by the rules.
How do you react to the allegations that H-Rera is a diluted piece of legislation because of exclusion of ongoing projects?
Firstly, it's not a diluted Act. Every legislation evolves over a period of time, based on the implementation experience and stakeholder inputs. The Act not only addresses concerns of consumers but also of developers and agents. This Act aims to balance the interest of all stakeholders. Consumers have enough protection under Rera, much beyond the ambit of the Consumer Protection Act. Moreover, it provides for timely disposal of all complaints received by the Authority, i.e. within 60 days.
Do you think Rera will be able to bring back demand in the realty sector?
The real estate sector is going through a tough period as part of the business cycle, which is a result of several factors. Some of these are specific to this sector, like unfinished projects, unsold inventory, bad practices adopted by companies, stressed assets, etc.
Rera will be able to stimulate the sector by increasing consumer confidence about on-time completion of under-construction and upcoming projects, resolution of stressed assets, thus unlocking demand and the purchasing power of consumers. Financial institutions will have more confidence in lending to builders/developers on account of regulatory compliance. Stringent compliances required to be followed by builders/developers will reduce risk for home buyers. In my assessment, we can expect a significant uptake in the activity in Gurugram's real estate sector in the next 12-18 months.
Will you have suo motu powers against irregularities committed by any real estate firm/coloniser?
An important aspect of the functioning of the authority is to ensure compliance of its regulations, orders or directions by the real estate firms and promoter. The Act provides explicit powers to the Authority to seek information suo motu and initiate investigations against any real estate company/coloniser. While the Authority is staying a suit, the Act also provides it powers as are vested in a civil court under the Code of Civil Procedure.
