Impact of Covid 19 on Real Estate Sector

Health & economic effect severely affected real estate badly affected consist of 7% of the GDP of the country it employees 15% of the labor force of India, It’s a labor-intensive industry it affects 269 other industries along with it

 

Property prices decline further covid pandemic

Rental decline, imply a good time to rent  

Property rates are down, can’t wait to sell Property rates are down can’t wait to sell

 

Journey of real estate in India

It was much lower than the financial crises back in 2008, After 2008 the financial crises we saw higher affordability easier investment help the real estate market actually better that’s why after the crash in 2008 until 2015 we see a surge of real estate investors in the market.

 

2015 most developers are unable to deliver on expectations & we see a downfall going there in 2016

 

2016 monetization dense real estate like never before it hurts the sentiment and again we see a dips over there 2016 march RERA happened than a new law is floated that streaming the dealing in the sector & bring transparency

 

Then in 2017-18, GST implemented results in a new launches & again we see a little bit ou dip over there

 

2020 we all know covid 19 records the lowest sale in the property residential property since 2008

Another trend has come up in the real estate story during the covid crises of conversation in the sector revolving, is the sector digital? Is that manageable? Is that even practical

 

What’s the future of the market when we’re in the midst of the world’s largest remote working experiment due to the covid-19 pandemic.

 

Digitization has taken over & experts believe will continue to be the foundation for the real estate sector. Digital booking for the real estate sector is already on the rise. Virtual site visits, interactions with developers online will also see a huge uptick on webinars & digital registration methods as well as payment methods are now likely to continue to be there in the future as well.

 

For example, an existing app like DocuSign & dot loop is already allowing real estate professionals to sign & send contract papers & documents on their phones so the digital applications are expected to continuously grow in popularity as investors search for ways to conduct deals on the go.

 

Virtual reality will influence the real estate world into the coming years while investors may be familiar with the idea of 3d walkthroughs and 360 pictures Experts also feel the need for space & the requirement of real estate comfort is going to be redefined for life.

 

Short term real market has come down in terms of absorption by about 40odd% it came down to absolutely zero in April & May when the lockdown happened but after that, it steadily started to grow.

 

Digital application going through quite well also there are token advances that are taken right now and harmony will reflect into real estate is still a question right now.

 

In short, the impact has been roughly about  40%  as far as price correction is concerned roughly 10% of price correction have happened across the board.

 

 

Get to know more about Real Estate and RERA Act here

 http://www.pnsrera.com/

 

 

Author

PNS RERA Consultants

http://www.pnsrera.com/

RERA Act | RERA Act Telangana

 

People usually put in their life long savings to make a house. In past, the real estate market was dominated by terms and conditions prepared by the builders or promoters. To the property buyer’s predicament, there were no standard, and hence, all the accordance were made favouring the builders. RERA which is Real Estate Regulations Act was introduced for safeguarding the interest of the property buyers. The aim was to make sure that property buyers were not used by the hands of the developers or builders.

Preceding to the implementation of this RERA act, buyers sold apartments and office spaces depending on built-up area, developed area, etc. Currently it`s a needed norm for the developer to just sell flat or office space dependent on the carpet area. Which is the region which can be used to move upon and utilized (where carpet can be laid)? This implicit a transparent picture of the purchaser even before purchasing the property. Usually, the project expands in general regarding time and cost. In some cases, the project usually won`t be varnished. This obscurity is resolved by RERA. The Act has characterized a lot of strict standards for the engineers, the intermediary, just as the consumer. There is a fight among different individuals as to how they see the consequences of the RERA ACT – some are worried about the logical increment in cost of development and compliance, while others are optimistic about the effect of the Act. The usage of the new RERA Act has comprised genuinely required preferences for the home purchasers. Or maybe, the RERA rules have set the home purchasers in an advantageous position.

According to the provisions of the Act, all going on and upcoming projects must be registered with RERA act Telangana compulsorily. All projects which are under process or which await emergence of completion certificate as on May 1st, 2019 would fall under the limit of this Real Estate Act. The advantages which would results to the property buyers because of theexecution of the latest provisions of this Act have been discussed below.

Similarity of sale agreement - The Rera act has permitted a common format of sale agreement to be used among between homebuyers and developers. Before, real estate agents used to put clauses that were in opposition to homebuyers which would punish them for any defaults. Consequently, such disciplinary clauses are no longer part of the agreement and homebuyers look forward to more equitable agreements in the future under the RERA act Telangana.

No Delay in Projects - Real estate developer needs to provide a delivery date as to when they will be granting the ownership of the apartments to their customers, stated under the RERA act Telangana. If the builder is not able to complete the project until the delivery date then he will have to face the effects. Also, for the builder to carry on with the project till completion, he will have to pay the interest payable from the due date to the date project is literally finished.

It is althoughrecommended to infuse in a property that is RERA registered. The real estate sector is being more professional and secure for homebuyers as well as builders under the RERA act Telangana.

MAHARERA Act

 

The RERA Act, 2016 came into consideration from May 2017. The RERA Act’s key aim is the rules of the real estate industry in every side of the country. Every state in India has its own RERA authority that supervise and regulates the real estate sector in the state. MahaRERA act has been very functional since its beginning.
Under the Rera Act 2016, all States have to initiate a regulatory authority to deal with the troubles starting from transactions in real estate market. The Rera act in Maharashtra come into consideration from May 1, 2017. The State has established MahaRERA act on March 2017 for rules and advancement of real estate sector. Since the whole State is covered under MahaRERA act, it is necessary for all ongoing commercial and residential projects to be recorded with the real estate regulator. The developers or promoters in the State are not permitted to sell, book or advertise their projects unless they don’t have Maharera registration and compliant. Maharashtra has determined a regulatory authority which will deal with revelation by developers, registration of projects as well as agents and take up consumer complaints. Any resentful person can file a complaint with MahaRERA act or the adjudicating officer with respect to any registered or non-registered real estate projects for any breaking of rules.

What is RERA Act in Maharashtra?

Under the RERA Act, 2016, all the Indian state must have its own Real Estate Regulatory Authority. RERA overseas the agreement in the real estate industry and initiates quick dispute redressal. Maharashtra is the first state to execute RERA in full swing via MahaRERA.

The RERA Act in Maharashtra functions on the following aim:

 

1.     Bring best clarity in the sale of plots, apartments and buildings.

2.      Safeguarding of customers’ interest in real estate transactions.

3.     Commence fast dispute settlement with a settling method.

4.      Evolution of the Appellate Tribunal to get complaints from buyers. In Maharashtra, all the residential and commercial project must compulsorily get registered under MahaRERA. No promoter or developer is allowed to advertise, sell or book their real estate projects otherwise. So far, the state alone has summons around 19000 applications, making up for more than 50- 60% of the RERA applications in India. Also, MahaRERA dealt with close to around 2500 complaints in the past year.

Is RERA Approval Necessary?

Commenced by the Indian Government, RERA administered the regulations in the real estate industry and fast settlement of argument. As per the Act, each state and union territory in India must set up its own RERA to safeguard the consumers’ interests and intensify transparency in the sector. It is necessary for every promoter and builder to get their projects registered under RERA act of their respective state. Consumers must also make sure to buy only RERA registered properties due to the remarkable reasons.
• Non-registered real estate projects are regarded illegal, and buyers may face problems in the future.
• On approaching the regulatory body for redressal, such buyers may be interrogated on buying an unregistered property.
• Promoters shall pay penance for non-registration along with imprisonment in utmost cases.
Developers must mention the registration numbers of their projects in all their promotions, certifying their conformance with the regulatory body. These mandates are important to meet the objectives of RERA – lucidity in the sector, safeguarding of interests, fast-tracking dispute deal etc.
Being the first state to execute RERA in full swing, the reason for MahaRERA act being unique is:

1. Number of applications processed

MahaRERA act has been effective since May, 2017, much before other state power established their regulatory body. It holds RERA registrations in Dadra and Nagar Haveli and Daman and Diu as well, and till date, it has processed more than 17000 - 18,000 applications. This makes up well over 50- 60% of the total RERA applications operated in the country.

2. Number of grievances redressed

In the previous year, the regulatory authority has handled almost 2,500 complaints of which over 2,000 appellants have finished the appeal process and around 1,200 of these were resolved. This is a huge number, and speaks of the body’s reach and appropriate communication channels for homebuyers.

3. How MahaRERA website differs from the others

The MahaRERA website is said to be the most adaptable among the other RERA websites. It assist you discover minute details about the projects assume under the scheme. This permits you to make a more illuminated decision concerning your real estate investment. The MahaRERA website mentions timely information on current projects as well as fresh projects covered under the MahaRERA act. For example, you can easily get data on the building plan, number of parking spaces granted for a specific project with just one click on the MahaRERA website.The website also gives person a pretty fair plan of when they can anticipate possession of their house, flat, or apartment as it restrain the completion date as well as the revised completion deadlines, if any. They can also check the reliability of brokers of various projects here. Knowing when their project is going to be finished also allow them to decide whether they can take a home loan.

4. Buyer-friendly policies

Some of the significant policies undertaken by MahaRERA act was the prohibition on advertisements of any developer’s projects till the time it was registered. Secondly, once builders cross the 3-month extension deadline of accomplishment, they are forbid from seeking more extensions, and alternatively have to pay fines till Rs.10 lakh. Some of the policies are also advantageous to developers such as the one where MahaRERA permits developers to make rectification even after they get the signed RERA certificate of their property.

Challenges ahead for MahaRERA

The MahaRERA has gone distant in both efficiently itself as well regulating the real estate industry in Maharashtra, Dadra and Nagar Haveli, and Daman & Diu. Nevertheless, there is still a lot of ground to be protected. It lacks, for example, data on the pricing of an apartment or escrow accounts. Being the initial one to administer such a big change, RERA effect on real estate in Maharashtra is assuredly adding to investor and homebuyer trust.

 

Mahrera Rules

Maharera rules

Government of India has validated the Real Estate Regulation and Development Act 2016 and all the sections of the Act shall come into consideration with effect from May 1, 2017. Under this Act, Government of Maharashtra vide notification dated April 20th, 2017 notified the Maharashtra Real Estate Rules, 2017 and established Maharashtra Real Estate Regulatory Authority MahaRERA, for regulation and encouragement of real estate the sector in the State of Maharashtra.

Maharashtra is the first state to execute the Act with an aim to safeguard homebuyers from any distinction by real estate players Developers. The MahaRERA was entrenched with the aim to permit homebuyers to approach the authority for any failure on part of the Developers.

Some key features of MahaRERA are:

Sale on Carpet area

Before the execution of the MahaRERA, Developers sold property depend on the built-up area which is the carpet area plus the outer walls of the apartment and other common areas. However, after the execution of MahaRERA, Developers have to sell the property depending on the carpet area i.e. area which is surrounded within the four walls of the apartment and eliminate the area of balcony and gallery of the building. This will help customers to pay only the money for the area they will be using.

Definition of Parking Space

The Rules have informed the definition of the Parking space which was not present under the earlier Act or Rules. Now, the Developer requires to reveal the charges for the parking area in the official agreement individually.

Mandate on the Developer

MahaRERA includes various mandates to acquire the safety of the buyers. Some major mandates are:

·        As per the MahaRERA Rules, the Developer has to reveal the land cost, cost of construction, and evaluated cost of the real estate project as needed under the Act. Since the penalty is imposed on the cost of the project this data is important.

·        The responsibility of finishing a project within a specific time frame lies on the real estate Developer, failing which the Developer would face fine and also be sentenced to three years in jail making it a distinct offense.

·        As per the Maharera Rules, the status of ongoing projects requires to be revealed as per the last sanctioned plan and also about the status of development of common areas along with the anticipated period of completion to be revealed.

·        The amounts deposited in different account can be withdrawn by the Developer on the basis of certificate issued by the engineer, architect and CA on the extent of project completed by the estimated cost of the project.

·        Registration the period contains the period where actual work could not be started because of the particular orders from any court of law, Competent Authority, Tribunal, etc. or such circumstances as may be noticeable by the Authority.

·        As per provision of the Maharera Rules, a Developer cannot sell apartments if such The developer has not registered the specific project within 90 days from the date of the notification.

·        The registration of the project is important for the Developer. However, registration of the project may not be needed if the project is for renovation or repair or redevelopment motive and which does not require marketing, advertisement and selling of apartments.

Establishment of Tribunal

To address the grievances of property buyers, the law mandates the implementation of a Maharashtra Regulatory Authority Board as a tribunal. The tribunal will comprehend of the Chief Justice of the High Court, the law and judiciary secretary, and the housing secretary.

Criticism

·        The state rules have a facility for ‘phases of real estate project’. It appears to advise a set of buildings and even a wing of building as a project. While the Act permits for large projects that are spread over 100 acres to be finished in phases, it does not permit for splitting a project into buildings.

·        Maharera rules have a new denotation called ‘proposed plans’ as per the RERA Act notified by the Centre, only sanctioned plans can be proposed and not proposed plans.

·        It also has a facility of ‘last approved sanctioned plan’. RERA clearly states that consent from two-third allottees is needed for changes in approved sanctioned plans shared at the time of booking a house. Considering only the last approved sanctioned plan is a complete indication to legalize all changes made by the promoter in the plan ensuing to booking.

·        MahaRERA also gives elective power to the Authority, to withhold any data or document from uploading on the website for public viewing. RERA does not give for any such power to be given to the Authority. Providing for such discretionary powers fully defeats the aim of the Act.

·        In the absence of express close shops till registration rule, Developers can pursue marketing and sales activities for their ongoing projects till the end of the three-month timeline.

·        The nature of prohibition under MahaRERA only prohibits sales and marketing of unregistered projects, it is secured to conclude that sold-out projects pending grant of possession until the issue of the completion certificate, need not register under MahaRERA.

·        Other than the State rules providing templates of the agreements to sell, RERA as well as most of the State rules do not describe whether re-executing transactions with the existing allottees of ongoing projects are compulsory or not. Therefore, without an express provision, such a need can also be safely presumed to not apply.

MahaRERA is a step towards altering the real estate sector in India, encouraging appreciable transparency, citizen centricity, accountability, and financial discipline.

Maharera Act

Maharera Act

The Rera Act, 2016 has come into consideration since May 2017. This law was executed to direct and supervise the real estate sector. The MahaRERA act is the body that governs the real estate sector in Maharashtra.

WHAT IS MahaRERA?

Under the Rera Act 2016, all States have to initiate a regulatory authority to deal with the troubles starting from transactions in real estate market. The Rera act in Maharashtra come into consideration from May 1, 2017. The State has established MahaRERA act on March 2017 for rules and advancement of real estate sector. Since the whole State is covered under MahaRERA act, it is necessary for all ongoing commercial and residential projects to be recorded with the real estate regulator. The developers or promoters in the State are not permitted to sell, book or advertise their projects unless they don’t have Maharera registration and compliant. Maharashtra has determined a regulatory authority which will deal with revelation by developers, registration of projects as well as agents and take up consumer complaints. Any resentful person can file a complaint with MahaRERA act or the adjudicating officer with respect to any registered or non-registered real estate projects for any breaking of rules.

Maharera rules has the mandate to:

·        Have real estate projects and agents registered.

·        Usher in clarity in the sale of flats, plots and buildings.

·        Safeguard customers, allottees, real estate agents and promoters who are connected with the real estate transactions.

·        Facilitate dispute resolution with a dispute settlement method.

·        Make an appellate tribunal which buyers can hail to resolve disputes.

·        Give recommendations to the appropriate government authorities in matters related to development and promotion of real estate.2

·        In Maharashtra, Maharera registration is necessary for all the residential and commercial project. Real estate builders are not allowed to advertise, book or sell any real estate without Maharera registration.

Features OF MahaRERA Act

There are number of features and advantages of MahaRERA act. These are as follows:

1.      RERA AUTHORITY: MahaRERA act handles registrations linked to the state of Maharashtra as well as the union territories.

2.     VOLUME OF GRIEVANCES: The regulatory authority has received almost 9000 complaints till 23 September 2019, Out of which near about 8,300 complaints were against the registered projects and around 700 complaints were against unregistered projects.

3.     EASY TO USE WEBSITE: MahaRERA act also has an official website which is very user-friendly and is comprehensive and easy to understand. It gives data of projects which have been registered with the MahaRERA act. It facilitates homebuyers and property investors to be better educated. Users of the website can find data linked to expected date of possession, credibility of brokers, etc. Most importantly, now that borrowers or the home buyers know when the project is going to be finished, they can determine when they should apply for a home loan.

4.    BUYER FRIENDLY: MahaRERA act is buyer friendly due to the only projects under Maharera registration and are permitted to advertise. Lag in completion of projects are handled firmly; in case of lag in project completion, If the allottees or the buyers do not want to withdraw from the project, the builders are needed to compensate the buyers by way of refunding the buyers or the allottees’ money along with interest at the specified rate for each month of lag till the developer hands over the property to the allottee.

 Benefits OF MahaRERA Act

1.      HIGH LEVEL OF CLARITY: Before RERA Act, there was a lack of clarity in the real estate sector; buyers were left to the forgiveness of developers to get possession of property they buy, promoters and developers could publish non-factual advertisements, etc. However, with the introduction of RERA act, the consumer is given all the data linked to the project he has bought his property in, the developer has to mandatorily adhere to registration of the project with RERA act, report on its progress, intimate about lags, if any, is penalized for the same, etc. Additionally, buyers have the right to question each step intricated in both development and promotion.

2.     ADHERENCE TO LAW AND ORDER: Now that MahaRERA act has come into consideration, there is no scope for developers to funnel funds gathered from investors and redirect them to some other projects. Down payment has been fixed at 10%. Non-compliance to RERA provisions interests penal action of imprisonment up to 3 years as well as financial punishment.

3.     RESPONSIBILITY: It is necessary for Developers to deposit 70% of all money paid towards a particular project into a single account. These funds are to be utilized only for cost of land or the construction cost. Developers must also report advancement systematically on the project to the regulatory authorities.

4.    INCREASED TRUST: Perhaps the greatest advantage that customers have is the reinforced trust in the real estate sector. This has led to rejuvenation of the sector and greater belief among property buyers.

What is RERA Act?

As India nourishes its position as a key player in the global market, industries, and businesses have observed remarkable development, which further has provided in the excessive rise in the real estate prices. In order to control the increasing real estate price and to safeguard the interest of the home buyers, the government has set up RERA or Real Estate Regulation and Development Act in 2016 that controls and observe the real estate sector across the states.

What is RERA Act?

RERA is Real Estate Regulatory Authority and was launched in 2016. The Real Estate Regulation and Development Act, 2016 focuses to safeguard home-buyers and increase investment in the real estate sector. PNS RERA Act is imposed in every state to control the real estate sector and assist in speedy and systematic argument correction.

According to PNS RERA Act, it becomes mandatory for all residential and commercial real estate projects wherein the land is almost 500 square meters to register with the Real Estate Regulatory Authority (RERA) for the beginning of any project. This registration assist in producing better lucidity in the implementation of started projects.

Under Section 84 of the RERA Act, it explains that within six months of the RERA Act being implemented, State Governments shall make regulations for carrying out the provisions of the Act.

Advantages of RERA for home buyers

·         Common Carpet Area

·         Levant Rate of Interest

·         Decreased Risk of Bankruptcy

·         Advance remission

·         Right to Information

·         Possession Delay which is the Buyer’s right

·         Defect in title also the Buyer’s right

·         Fake promises the Buyer’s right

Key Features of RERA ACT are

1.       Betterment of Oversight of Projects: Ensuing to the ratification of this act by an individual state, a State Real Estate Regulatory Authority will be set up. This state-level authority would be authorized to oversee all commercial and residential realty transactions in the state and also give redress to the wronged parties on a case to case basis. The State Real Estate Regulatory Authority will also have the power to enforce punishment and fines on those who do not follow the new rules and regulations.

2.      Increased Transparency: As per the RERA Act, real estate developers are mandatorily required to deposit 70% of the funds allocated for project development into a designated bank account. Each project will have a separate dedicated account so that the funding for one project is not diverted to another by the developer. Additionally, it is now mandatory for the developer to provide all pertinent project information including plans, layout, approvals, subcontractors’ list, timelines etc. such that it can be easily accessed by customers as per their requirement.

3.      Clear Legal Definitions: Prior to implementation of the RERA Act, it was common practice to advertise the size of property on the basis of a super-built area. The super-built area did not have a legal definition and it generally misled home-buyers. Now, project data will be given based on the carpet area, which has been legally explained in the law making it feasible for homebuyers to assess properties.