Home Buyers are Uneducated about RERA
Real Estate market has faced high turbulence in the last one decade. A destabilize market impacts not only to the buyers but also to each and every stakeholder. The destabilization source can vary and hence, so its propagation time. If the destabilization source is external factors, it may propagate smoothly without hampering much of the market dynamics. However, if the source is internal factors of the market, it impedes the propagation time much more than the anticipated. The case of Indian Real Estate Market over a decade fits well in both the category. The initial shock was from western markets (US sub-prime crisis), which transmitted not much affecting the rising local demand, however, the second shock came after the news of “Possession Delays” by a number of developers broke-out and “Fund-Diversion by developers” found to be the root cause of the possession delay problem. This made a permanent damage to the exponentially growing and high employment generating industry. The sense of Faith on the developers was lost. Mechanism to follow in case of the dispute was not clear. Definitions of project terms were not standardized and so forth. To revive this industry, the government initiated various urgent policy initiatives, one of them was the formation of RERA (Real Estate Regulatory Authority). The RERA act 2016 lists various guidelines for the developers and helps in bringing transparency between the buyers and developers.In a single sentence, it could be stated that the purpose of RERA was “to create awareness among buyers about their projects by offering all the required information about that project at a single portal”. All available information will be binding for both parties and hence, any issue related to non-disclosure or partial disclosure of information could be avoided and a fair market functioning would be achieved by rebuilding confidence in the buyers.
RERA rules have been notified in almost 19 states of the country and in all the union territories. Some states like UP and Maharashtra have developed RERA online portals where a large number of projects are listed with extensive details about each project. This gives a positive feeling that government and authorities are really sensitive towards creating a transparent real-estate market. However, the other side of the mirror shows a different picture. A survey conducted recently by us shows that “buyers are uneducated about RERA”. The survey was carried out among the prospective buyers in Noida region by asking them a structured questionnaire. The questionnaire was prepared to understand the “awareness about RERA among buyers”. The interesting finding is that “Buyers have just heard the word RERA but they are not much aware of it”. Some of them said it is like an authority like DDA (Delhi Development Authority) who gives permission to developers. Buyers are a strong pillar of any market and a well-informed buyer is one of the most essential criteria to bring efficiency in any market. This brings us to conclude that in line with KYC (Know Your Customer), the government should initiate KYP (Know Your Project), an educational campaign for home buyers. This may be directed to create awareness among buyers about RERA act, its scope, filing complaint about any registered project and so on.
- Rajni Kant Rajhans
National Institute of Construction Management and Research (NICMAR)
- TS Parouthi, Ms. Baiju Agatha and Mr. Ayyappan Sethu
Students, PGP ACM , National Institute of Construction Management and Research (NICMAR) Delhi-NCR Campus