[ecis2016.org] In an exclusive interview with ecis2016.org News, Balvinder Kumar, member of the UP RERA, shares his roadmap for making RERA an ideal platform for due diligence, in addition to addressing consumer grievances
In only its second year of functioning, the Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has emerged as a trusted resource for aggrieved home buyers. Considering that UP is home to some of the most affected property markets, such as Noida, Greater Noida and Ghaziabad, a number of fast track judgments by the UP RERA have ensured that both, the builders and the buyers are looking up to the RERA, with hope. Balvinder Kumar, member of the UP RERA, a former bureaucrat, who has held many key positions, including a stint with the Delhi Development Authority (DDA), shares his roadmap for making RERA an ideal platform.
You are reading: Star rating to be a game-changer for real estate: Balvinder Kumar, member, UP RERA
Q: When the RERA came into existence, there was a big question mark over its functioning in Uttar Pradesh. Now, in its second year, it has earned the trust of the home buyers. How differently have you handled the challenges?
A: In a broader perspective, the National Capital Region (NCR) has been the worst affected, whether it is in terms of the delay in delivery of projects or projects that have failed completely. There are a large number of abandoned projects. Cases of fraud and cheating by builders, are maximum in this pocket. So far 13,000 complaints have been filed before the RERA and we have so far succeeded in issuing orders in about 8,000 cases.
Of course, the compliance of the orders that we have passed, is another challenge. However, gradually, there has been confidence among the buyers that they will get justice through RERA. We are taking various measures to build confidence among the buyers.
Q: Considering the financial stress in the market, many of the developers are not in a position to deliver their projects here. How do you handle this situation?
A: Basically there are three kinds of situations. First, when the construction work was stalled for a long time due to the farmers’ agitation. Second was due to the orders of the NGT (National Green Tribunal). The third situation was where there were many court cases, because of land disputes. Due to these reasons, construction was stuck for a long time. Now, the state government has decided to give a ‘zero period’ benefit to the builders, in cases where the construction work could not happen and there will not be any interest amount charged for the pending period. This is a big relief for builders.
Moreover, the central government has come up with the stress fund scheme, wherein, they are pooling about Rs 25,000 crores and they will be extending loans to builders to complete their projects. So, the benefit offered by the state government, as well as the stress fund of the central government, will prompt builders to complete their delayed projects.
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Q: Are most of the consumers demanding penalty for delays or refunds?
A: Buyers are approaching us primarily for refund of their money, because real estate prices have fallen considerably in the last 4-5 years. So, the buyers feel that if they get the refund along with the interest, this would be far more beneficial than taking possession. However, we are taking a very balanced approach, because if we reward refund in all the cases, then, many of these projects that could otherwise be completed would not be completed.
In cases where the builder is giving us a fixed timeline of a maximum of up to December 2020, we are asking the buyers to take possession, along with a penalty for the delay. We are giving penalties of MCLR plus 1% for the period that the project has been delayed.
Q: There is a general apprehension in the minds of buyers that even if the RERA awards a penalty, the developer will challenge it in the higher courts and not all buyers from the NCR can go to the Allahabad High Court to contest that.
A: As far as appeal is concerned, there is an Appellate Authority that is stationed at Lucknow. All the builders have to deposit 30% of the amount, before their appeal is admitted. It is not that easy for the builders to file appeals in each and every case. In 99% cases, the high court is not admitting the case against the buyers. They are directing the builders to exhaust the remedy of appeal that is available under the available legal provision.
In cases of refund where the builder is not completing the projects within the time frame, which they had given to us prior to the passing of the judgments, in those cases, we are issuing the notices to the builder to comply with our orders. If they fail to do so in 45 days, then, we issue recovery certificates and send those recovery certificates to the district magistrate for recovery of the amount.
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Q: How do you deal with situations, where the delay is due to government agencies?
A: The state government has already passed the order of ‘zero period’ benefit where the construction work has stopped. In case of delay on the part of government authorities, in granting the Occupancy Certificate or Completion Certificate, we are pursuing such issues with the relevant authorities, to ensure prompt issue of certificates, once the construction work is completed.
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Q: A number of RERA members from across states have gone on record, saying that the RERA needs more legislative teeth to make it more effective. Do you agree with this?
A: I do not completely agree, because I feel that we already have substantial powers to implement various provisions of the legislation. However, I feel that there should be one additional provision added to the legislation and that is, the power to issue directives to different institutions, as well as government agencies, so that whenever we feel that something needs to be done to give due benefit to the buyer or the builder, then, there should be binding directives for these agencies. If we get this power, it will help us a lot. Nevertheless, I feel that the RERA has sufficient powers and provisions, to make it an effective legislation.
Q: Noida, Greater Noida and Ghaziabad have a long backlog of delays and defaults. How long will it take to clean the system?
A: It will take 1-2 years, before all the projects are streamlined. The year 2019 has been quite good – many projects were completed and thousands of buyers who were waiting for a very long time, have got possession of their properties. 2020 will again be a very crucial period and I feel that more than 50 projects that have been delayed will be completed, either fully or partially.
Q: RERA is a grievance-redressal forum for home buyers. Can it act as a watchdog for due diligence, as well?
A: We are starting a ‘star rating’ system for the same and we have already awarded work to one consultancy firm, wherein, all the builders and their projects would be rated between 1 and 5 stars. With this star rating, investors and the buyers will come to know about their past performance, quality, maintenance and all other related things, before investing money.
We hope to implement this rating system in the next 3-4 months and with this, the buyers will be in a far better position to judge the project and the builder. It will be builder-specific and project-specific, because the builder may not be very good but some of his projects can be of very high quality.
(The writer is CEO, Track2Realty)
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Source: https://ecis2016.org
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