Big and small real estate developers have been working hard to re-align their processes and business practices to the Real Estate (Regulation & Development) Act or Rera, which comes into force from May 1. Some have hired external consultants, while most developers have put their internal teams to work on regulatory compliance.
“We have studied the law, attended seminars and prepared for it. But we need to understand how the government defines agreements, financial mechanism, on-going projects, etc,” said J C Sharma, vice-chairman at Bengaluru-based developer Sobha.
Sharma points out that the company is not anxious about the implication of the legislation as it has projects in West Asia, where regulations are tougher than in India. Karnataka, where Sobha is headquartered, is yet to notify the law.
While Sobha relied on internal resources to study the law and its implications, Pune- based Kolte Patil Developers has hired global audit firms and law firms to understand the rules.
“We are fully geared up. We have been following some practices like separate accounts for each project,” says Gopal Sarda, group CEO at Kolte Patil.
Rajiv Talwar, chief executive at DLF, the country’s largest developer, says they have been studying the regulations for the last couple of years. “We will sell residential properties only after completion. Anyway, we do not sell malls and office space as they are leased out,” he adds.
Mumbai-based Hiranandani group, that has been studying the regulation for the last six months, says it will be ready with compliance over the next two-three weeks. “We have been working on meeting the terms and conditions for the last six months,” says Niranjan Hiranandani, chairman of the group. Though some of the penalties seem to be harsh, he adds, developers have to live with it given the negative public perception about developers.
Wadhwa group, another prominent developer in Mumbai, has already trained its legal, execution and documentation staff, says chairman Vijay Wadhwa.