Time to get your supply chain right, folks!
With an aim to bring transparency and accountability to the sector, The RERA or Real Estate (Regulation and Amendment) Act, 2016 was implemented on May 1, 2016. As RERA has just turned two, the journey so far has only reiterated the importance of a robust and efficient supply chain in delivering on those promises.
Home buying is a major decision in the lives of many individuals in our country. The decision is often emotional and sometimes strategic in nature when it comes to investment. For most of the home buyers, it is a lifetime investment. So, builders have added responsibility to fulfil the dreams of their consumers. RERA, in a way, turned out to be a boon to the home buyers who now can feel empowered with the option to claim compensations from the builders and consumers can get protection if they renegade on their promises related to project completion, facilities and amenities. Similarly, under RERA the builder’s interest is also protected in-case of any sort of deferred payment or default by the home-buyers.
The fact that the onus on the builders is extremely strong is evident on this part of the RERA act which says, “In case any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale relating to such development is brought to the notice of the promoter within a period of five years by the allottee from the date of handing over possession, it shall be the duty of the promoter to rectify such defects without further charge, within thirty days, and in the event of promoter’s failure to rectify such defects within such time, the aggrieved allottees shall be entitled to receive appropriate compensation in the manner as provided under this Act.” (Clause 14 (3) of RERA)
Builders can contest the time-period or on the lack of clarity on the term ‘workmanship.’ But, the fact remains that the supply chain which involves various material suppliers has to be quality-focused, resourceful and time-bound. So, the way the RERA has initiated a phase of consolidation in the housing and real-estate market, similar consolidation process has to happen in a faster pace on the supply chain side. A prolific supply chain can only help builders become RERA-compliant and above all help them earn the trust of the homebuyers. From the builders’ point of view, there should be no compromise on the quality of the construction materials, electrical fittings, water pipes, etc.
As the builders are the key player that sets the tone and pace in the sector, they have to adopt added caution while selecting their supply chain partners. They need to evaluate the credibility and track-record of the construction material suppliers more stringently than earlier .When adherence to the project specification is the bone of contention, builders can’t afford to throw caution to the wind. At a time when the sector is in the process of regaining its momentum and the things are looking up, they can’t put their brand-equity at stake. In this competitive market scenario, it is extremely difficult to regain the lost ground. The commitment of a builder to his buyers now goes beyond the Completion Certificate. And, an efficient supply chain can always keep them on the safer side.
By Nitin Kulkarni, President Sales and Marketing Finolex Industries Ltd