RERA in UP will grade developers on 0-5 scale

The Real Estate Regulatory Authority (RERA) in Uttar Pradesh will be coming up with a grading mechanism for all real estate developers and residential projects in the state. This will serve as a guide for homebuyers as well as financial institutions. As a result, each of the developers and the projects will be having an individual rating. This will be zero for the poorest one and five for the best. This is a welcome move from the authorities, as the scaling system will make it possible for homeowners to make an informed decision.

According to the officials, the process of scaling will start in January, 2019. Primarily, this system will be based on the feedback obtained from people who are involved in the projects and whether or not they comply with the guidelines established by RERA. This grading system will be effective in keeping a track of the developers. The benefits will be enjoyed by the stakeholders and the overall sector. Previously, long delays in delivering the projects were an issue for homebuyers. With the new guidelines of RERA coming into play, the builders are now required to complete the projects within the stated deadline. Particularly, this was common in areas like Ghaziabad, Noida and Greater Noida. In case they are unable to complete the projects on time, they will be exposed to the buyers. This will give more confidence to the property buyers, which will benefit the industry in the coming years.

A survey was carried out recently on the stalled projects in the state. It has been found that 25 out of the 98 projects that have been surveyed do not have any problem. In another 20-25 projects, the problems are serious and these might turn out to be difficult to be resolved. However, the remaining projects can be completed if a co-developer is roped in. Alternatively, seed-funding can be a solution for these projects. In these projects, the structures are physically 80% complete. The authorities are hopeful that these can be completed in a short time.

The UP government has set up a high-powered committee and has proposed to come up with a similar arrangement, so that the projects are completed by providing the real estate companies with some relaxation. According to sources, the government in UP will be considering the recommendations that the high-powered committee comes up with. Accordingly, they will plan a strategy to complete the projects in the state.

Once the rating system for real estate companies and housing projects is introduced, the property buyers will get a better view of the property they are planning to buy. It is also likely to minimize delays in delivery and keep away corruption from the industry. The real estate sector will be benefitting significantly from the decision.