Why Are Developers Rushing To Complete Projects?
While there is a lack of clarity on when the regulator proposed in the recently passed Real Estate Bill, 2016, will come into being, developers have already stepped up their speed and are going full throttle to complete the construction of their projects. The aim is to avoid regulation enforcement. The Bill makes it mandatory for developers to register themselves with the authority for building projects.
According to property research firm Liases Foras, of the 17,000 under-construction projects in the top 27 cities in India, 56 per cent are at least 60 per cent complete. Here are a few reasons why developers are in a hurry:
- The sector has been abuzz with stories of project delays. And, if developers have to comply with the norms mandated in the new Bill, the delay will only get longer. Developers also fear hefty penalties that they might be required to pay once their projects come under the ambit of the Real Estate Regulatory Authority (RERA).
- When the authority comes into force, developers will be required to disclose their work history on the portal which will be maintained by the RERA. This portal will display the information related to projects undertaken by the developers in the past, including completion details. All this information, readily available to prospective home buyers, will help find a developer with a good track record. So, before the information goes online, developers will certainly try to improve their records by completing pending projects.
- The heavy penalties and the provision of a jail term in case of non-compliance have also made developers quite apprehensive. Developers are in a hurry to speed up construction of their pending projects for this reason, too.
Keeping them on tenterhooks
After the Bill got Parliament approval, developers have been left wondering about many areas that lack clarity. For example, developers are under an impression that till the regulatory authority comes into place, they can continue with their normal business practices. Also, Urban Developer Minister M Venkaiah Naidu announced that the Bill would be applicable to under- construction projects without specifying the stage till which the law would apply over such projects.
Apart from that, states have to take steps to adopt the Bill and developers are clueless about the modifications their respective state governments might implement.
Whatever the reason, however, developers' hurry to complete projects is sure to bring cheer to eager home buyers waiting for their homes.