India’s real estate authority strives to strike a fine balance

V Nagarajan

The Real Estate Regulatory Authority’s (RERA) implementation of new guidance was a significant regulatory step to address the trust deficit in consumers’ minds and instil confidence in wary end-users in realty market.

The developers were coming to terms with a changed market environment where the big boys of real estate, due to their credibility amongst buyers, eyed a larger market share and entered into joint developments or development management contracts with smaller developers.

Sadly, the Covid-19 outbreak played havoc with this subtle market recovery in the making, throwing the sector back into reverse gear, says Knight Frank India survey.

Taking note of the developers’ inability to deliver projects on time due to reverse migration of labour, break in supply chain of construction materials and interim construction bans owing to the lockdown, the government has extended the registration and completion date suo motto by six months for all registered projects expiring on or after March 25, 2020 without individual applications.

Regulatory Authorities may extend this for another period of upto three months, if needed.

However, homebuyers’ concerns yet to be addressed as they are not happy with these relaxations provided to the developers as they are staring at a situation where their troubles have been compounded and they find themselves at the crossroads of a difficult situation, yet again.

Since coming into force, Real Estate Regulatory Authority has brought in transparency and financial discipline to a sector where real estate dealings were fraught with unfair trade practices, red tapism and opaqueness.

For a sector, where there were no standardised contracts nor a grievance redressal mechanism, establishment of RERA has been a stepping stone to take care of homebuyers’ interest. As of May 30, nearly 52,000 real estate projects have been registered with the Real Estate Regulatory Authority.  To ensure that extension of project registrations and invoking of Section 6 is not misused going forward, state level RERA authorities should start populating portals with project-wise information as to where this clause has been invoked, so that buyers in those projects are not left in the lurch after six months.

There is still a long way to go as the law has not matured with time, and its success hinges upon the smooth coordination between central, state and regulator level authorities, and implementation of the orders passed.

A new initiative in the form of AIFORERA has been launched, and it aims to do a comparative study of the different State level RERA laws, classification and cataloguing of different Real Estate Regulatory Authority’s judgements and also come up with data analytics and dashboard reports which would be useful for real estate consumers and promoters both. However, the fruits of this initiative will be visible on the ground only in the long-term.

For now, the state level RERA authorities have a huge task cut out to ensure that the exception granted for extension of project registration helps in bringing the sector back on track and homebuyers are not left feeling betrayed, all over again.

I am planning to invest in a larger apartment size. Can I take a joint home loan with my father as he is still in service? Are there tax benefits for a joint loan? Please advise. Aritra Das, Sharjah.

In a joint home loan, joint applicants also enjoy tax benefits provided they are also joint owners of the property.

The tax benefit of Rs 150,000 is available to both for the principal amount repaid.

In addition, both of you will be entitled to Rs200,000 each for interest paid for self-occupied property.

The construction of the unit should be complete to claim these benefits.

My father died recently without leaving a Will for the property bought by him. Can my sister who is married and moved away from the family claim an equal share in the property? Narendra, Dubai.

Yes. As a class I legal heir, your married sister has a right to claim an equal share in your sister’s property.

I am employed in the Gulf and planning to pursue higher education by selling inherited property and repatriating sale proceeds to fund the education. Is repatriation allowed for students pursuing higher studies abroad? Sharan Gouda, Dubai

Yes. Students going abroad for studies are treated as NRIs and are eligible for all the facilities available to NRIs under FEMA including repatriation of inherited immovable property sold in India.

You will be eligible to receive remittances from India upto $1 million per financial year, out of sale proceeds of assets in your account maintained with an authorised foreign exchange dealer bank in India.