Transparency measures have led to drop in disputes in real-estate sector: Chairman, Maha RERA

The Maharashtra Real Estate Regulatory Authority’s (MahaRERA) move of asking for quarterly progress reports from developers in the real-estate sector, nudging them to publish approved plan in public (on website) to improve transparency and inform consumers on where their projects stand is leading to a drop in disputes in the sector, said Mr Ajoy Mehta, chairman RERA, Maharashtra at the CII Annual Conclave on Indian Real Estate 2023 in New Delhi.

Mehta said the idea is to increase transparency on multiple fronts. Maharashtra RERA is now asking developers to put the approved plan of their projects on their websites and designate an account for each project so that home-buyers know exactly how their money is being spent. “The information that you have as a developer, should be there as a buyer also,” said Mehta, making a case to cut down on information asymmetry in the real estate sector.

The real-estate sector needs to access finance from the banking system and not be so heavily dependent on money of homeowners to build houses, said Mr Manoj Joshi, Secretary, Ministry of Housing and Urban Affairs in an earlier session of the CII conclave. In the real-estate sector, developers, contractors, and vendors (who work for developers) do not access credits from banks. They work on money that they get as advance from the government clients or developers who get their money from the house owners, said Mr Joshi.

Maharashtra RERA is also red-flagging projects on delays and ensuring a neat division between accountants and auditors of real-estate players to avoid conflict of interest. “As a regulator, we track when a project was to be completed and if the project is getting delayed, then the developer needs to be told that they lagging behind,” said Mehta. When RERA came in seven years ago, almost 38 per cent of projects came in seeking (time) extensions and now, only 9.6 per cent seek (time) extension (to complete projects), he estimated.

“We are working on separating accountants and auditors. Developer’s accountant cannot be its auditor,” added Mehta.

Speaking about how the MahaRERA is trying to reduce disputes in the sector, Mehta said “Even though we are regulator, we have started conciliation forums. As a regulator, my deliverable is to ensure zero disputes (between consumers and developers). Pre-2017, a third of registered projects had disputes, now three per cent of projects have disputes. My target is to bring down the disputes further to 1 per cent”.

Stressing that there have been a lot of improvement in the real-estate sector in the last seven years with Real Estate Regulatory Authority (RERAs) coming into being, Joshi, pointed out during the inaugural session at the CII conclave that most state-level regulators till now have focused on the consumers getting their booked homes on time. “The next wave of improvements have to come from RERAs on whether what was being promised to the consumer by the developers on standards of construction and other quality parameters are being delivered” he added.

29 May 2023

New Delhi