- Anthony de Sa, Chairman, Madhya Pradesh Real Estate Regulatory Authority
Madhya Pradesh was among the first states to bring in the RERA rules last year in October, along with an interactive bilingual website. Speaking on the impact of RERA on the real estate sector, Anthony de Sa, Chairman, Madhya Pradesh Real Estate Regulatory Authority, says, 'The completely unorganised sector will become organised and buyer confidence will increase.' He is confident of a positive change, among some initial teething problems in ongoing projects.
He shares further updates on the Act in conversation with SHRIYAL SETHUMADHAVAN. Expected impact of RERA in Madhya Pradesh: The impact will be positive. The Act has been designed to improve buyer confidence, which will improve the real estate sector as well. Transparency is coming in, there is guarantee inbuilt, there is provision for compensation, and so, the risk for the buyer has reduced considerably.
Projects currently registered: We have received four applications until mid-May, just two weeks since the Act came into force. Also, there were several minute loopholes in our rules, which through further interaction with stakeholders and seminars where people pointed out to problems being faced, we revised and prepared amendments and drafts.
Impact on ongoing projects: The first three months is the time for ongoing projects to register. This applies to ongoing projects that are in time, delayed ones, as well as those on a standstill.
So, construction work on these projects will continue, but by July 31, they have to register under the Act. If not done, the project becomes illegal on August 1, 2017. Now, for instance, what if the project is dissolved because the builder says that he cannot complete it! In such a scenario, the buyer needs to be returned his money with interest. In another scenario where the builder says that he will complete the project within a given timeframe, based on the delay period, a rate of interest will have to be paid to the buyer. That said, from May 1, some compensation can also be made if the project was due to be delivered before May. So, the approach will be different from project to project.
Are the current municipal laws in line with RERA? Although the provisions of the Act did not exist in the local laws, there is nothing contradictory. Construction work on projects can commence only after they are registered with RERA, which will be done only when all clearances are through.
Separate account for every project: In Madhya Pradesh, for every project there will be an account, and all the money received for the project will be deposited in to that account. That said, 70 per cent of the money received has to be spent on that particular project itself.
For ongoing projects, the builder has to submit a complete account of the amount received and spent on the project till the time of registering under RERA.
And, if at least 70 per cent of the amount received has not been spent on the project, the difference between what has been spent and 70 per cent has to be deposited in the project account.
Timeframe to approve applications: The authority has 30 working days - since the submission of complete documents by the builder - to approve or reject the registered application. We will ensure that the process at our end is much faster.