ROARING CUSTOMERS, DISMAYED BUILDERS

Real estate sector has been one of the most unorganised sectors of the Indian economy and
the situation has only worsened over the years due to the ever increasing presence of fresh
entrants. Eventually, it is the end user who is taking the final hit because its them who have
invested their hard earned money. Customers put in their savings or take over additional
loans, but this decision is usually taken in a hurry without proper checks and verifications,
hence the trouble. Also, they need to payout their current rentals, pledge the fixed EMIs
against the loans borrowed, etc. which adds to the mess. With no promise of delivery, no time
frame disclosed on the progress of work, no details divulged on the work style of the
developer, but still there is an investment which has now turned into a non performing
asset. In light of the recent happenings, which incited buyers of Unitech who had no way out
but to knock on the doors of the judiciary, one can imagine the extent to which people have
been exploited by developers.
Sharing his views on such developments off late, Mr. Rajesh Goyal, Vice President CREDAIWestern U.P. & MD, RG Group shares, With more and more new players coming into
Indian realty, people have been spoiled with options to invest their money but that also brings
along the need for home-buyers to be even more cautious while short listing or finalising
their home. A lot of nuisance is being created by these newbie who either do not carry a
strong background or sound technical knowledge/ expertise or professionalism that the sector
demands thus failing to deliver their promises and bringing a bad name to the whole sector.
We are hopeful that, in 2016 the implementation of RERA will put an end to all these
misdoings.
What has been in store?
This sector has brought cheers to a lot many people but off late it has gained the status of a
swindle. The sole reason being the entire hoax which has been rough-hewn by the new
builders and isolating these from the lot is like finding needle in a stack of hay. Not only are
the end users affected, even the channel partners are also on the suffering side. Adding weight
to this, Mr. Vikas Khurana, Co-Founder, HomzCart believes, We being channel partners are
no less at risk in these scenarios. In our model of business when we get into contract for the
exclusive marketing and branding rights of a project and the project gets delayed, we cannot
expect to sell out the project on time. Be it any reason, the end user who invests will never
understand, the simplest reason being consumer psychology. If you are paying for anything,
either tangible or intangible, you will definitely expect the product or services to be delivered
on time. Failing this, you are sure to gain mistrust in the market.
Taking NCR realty market as an example, the average delay range from 3-5 years and this has
definitely played its part in the boil up to these events. Many builders had raised money from
the market on the promises of assured returns but even after substantial time has elapsed,
there is no construction work in progress and neither has there been any word on the returns
which they had promised to the investors and buyers. There are various reasons which

builders cite for the delay in projects like the authority not providing necessary approvals on
time, limited availability of raw materials, labours, etc. but the actual reason is something
else. Once a project is launched and they pick up money from the market, they tend to invest
that money in acquiring land for new projects. Explaining further, Mr. Kushagr Ansal,
Director, Ansal Housing states, Most of the times, the greed to earn more is what makes
these builders err and come in the wrong sight of the buyers. Once they are able to achieve a
pompous launch to their debut project and collect handsome amount from the market, they
invest that money in acquiring new land masses for future projects rather utilizing the funds
on the development of the project. What follows then is what we all are very well aware of
and the ruckus it creates.
Will RERA be the saviour?
Various reforms and policies are in the pipeline to be implemented in the coming months
which will change the entire landscape of real estate in the country, and several important
ones have been lingering in the parliament for its approval. The most important being the
Real Estate Regulatory Act which will redefine the concept of real estate in the country. Also,
it will help regularise this sector which till this date stands much unorganised. Speaking his
sentiments on the same, Mr. Ankit Aggarwal, CMD, Devika Group states, No doubt the real
estate sector is one with very high returns but the allurement to make more on immoral
grounds has led us to this juncture wherein even prominent developers are looked upon with
suspicion. A lot of effort will have to be put in to clear the pond which can commence only
after RERA is implemented. This will not only restrict irrelevant builders to enter the
developers fraternity but also tighten the noose on those who are already in it but not
performing by the standards of the sector.
Once RERA is implemented in full force, bills like GST, Land acquisition, etc. can follow
suit. The sole reason to impart such high weightage to RERA can be adjudged by the recent
amendments in the bill which were approved by the cabinet. Some significant points of it
were to maintain escrow accounts for individual projects to ensure there is no shortage of
funds for the project, making sure that builders stick to their proposed plan unless major
architectural revamps are required, etc. Adding substance to this, Mr. Vikas Bhasin, MD,
Saya Group avers, In addition to RERA, single window clearance will hold key to the real
estate sector coming to its own because agreeably or disagreeably, approvals do eat up a lot
of time. Once these issues are addressed, notorious developers will definitely run short of
excuses to give and help bring some sanity back in the sector. To some extent, RERA will
also ensure much effective implementation of land acquisition bill and awarding of industry
status to this sector.
Aware of the dubious nature of this sector and the image it has built for itself, Mr. Vikas
Sahani, CMD, Property Guru concludes, RERA is not the ultimate goal of the real estate
sector but yes, once RERA is in place, the road ahead for major revamps like Industry status
for the sector, Single Window Clearance system, etc. will become easier because RERA will
help ensure that malpractices in the sector are curbed and processes are streamlined. The
roads ahead are tougher and tougher with deadline for various schemes like AMRUT,

Housing for All, Smart City Mission, etc. in near vicinity, RERA will hold key to all these
because it will work as the centres eyes to monitor developments on a Pan India basis.