RERA seeks one-time debt recast from RBI to bolster developers

Like most other industries, the real estate sector has also fallen into hard times during the COVID-19 pandemic. With construction works slowed down and property sales declining, the realty sector is suffering from a severe credit crunch. The industry was already undergoing a period of stagnancy with liquidity issues for the past few years, from which it had just started to recover when the pandemic started.

In order to help the real estate builders against this new crisis, the real estate regulators would be approaching RBI to seek a one-time restructuring of debt. The issue of restructuring would be taken up with RBI by All India Forum of Real Estate Authorities (AIFORERA).

Homebuyers had been complaining that relief measures taken for the real estate sector were benefiting only the developers and not them. In order to make sure that the flats get completed & delivered to the property buyers, the timelines for completion have been extended by 6 months. The developers have also been asked not to penalise the homebuyers if their installation payments get defaulted. Moreover, the developers have also been warned that RERA would be forced to take action against them if they do not comply with the orders from the authorities.

The introduction of RERA has definitely been a much-needed boon for the real estate sector of India. It has been safeguarding both the developers’ and the buyers’ interests in every way possible. Moreover, RERA has ushered in an era of transparency in the industry, which had for long been an opaque sector marked by unscrupulous activities. A majority of homebuyers prefer ready-to-move homes over under-construction ones, which is a clear indicator of their wariness towards the developers. This is because many developers used to force buyers into paying up more than they should by misleading and tricking them.

However, the situation has started to change after RERA was introduced. In case if anything goes wrong, buyers can file a complaint with RERA and get their problem resolved. The developers need to submit all necessary information to RERA in order to get certified. This, along with the punitive laws to curb the shadiness in the sector, has been helping to rebuild the trust between buyers and builders. This is also benefitting the honest developers as they can now market their projects more easily.

So far, RERA has been doing a good job at upholding the rights and the interests of buyers and builders alike. It is expected that they would continue to take necessary measures to help builders and property buyers during the pandemic situation.