The Real Estate Regulation Bill has not been greeted with much enthusiasm by stakeholders, including home buyers and builders. Both real estate developers and consumer groups have expressed dissatisfaction with the version that has been approved by the Cabinet.

Getamber Anand, President-elect of the Confederation of Real Estate Developers Associations of India (Credai), slammed the Bill as retrograde and anti-development in nature, saying that “registration with the regulator should be deemed done once applied for, rather than give a 30-day lever to the sanctioning authority to delay the application on any flimsy ground as was provided in the earlier version of the Bill. Also, cancellation of registration can be highly misused and jeopardise projects which are well underway and thereby harm even the consumers.”

Cost implications

Sanjay Dutt, Executive Manager and Director of Cushman and Wakefield, South Asia, said the short-term effect of the Bill could lead to “noticeable slowdown in launches of new projects as getting all the necessary permissions in place may delay the process of launching a project”.

He also said there will also be some cost implications, as developers wait to launch their projects with due approvals in place. This could lead to an upward pressure on prices.

Credai NCR President Anil Kumar Sharma, while welcoming a regulatory Bill, said the organisation is opposed to the current version of the Bill. “The sector is facing numerous problems and bringing in a regulatory bill at this stage may further worsen the growth in the real estate industry ,” he stated, adding that the Bill should also consider the problems of developers and not just consumers.

Real estate consultant CBRE is also critical of the Bill. Anshuman Magazine, Chairman and MD of CBRE South Asia, said: “The real estate regulator Bill should have been more balanced, taking view of challenges faced by developers and consumer grievances. While consumers need protection, for real estate development to happen more efficiently and in a transparent manner, administrative reforms are required urgently.”

Consumer groups

Consumer protection groups are not entirely pleased with the draft version approved by the Cabinet, either.

The Federation of Apartment Owners Association has argued against the inclusion of basement, cellar and open areas as part of the definition of apartments. There is fear that developers would use these ambiguous definitions to charge exorbitantly for parking space and other areas, or include parking space and basement areas under the FAR (floor area ratio) of apartments, which would thus be far greater than the actual living space in each house.

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