With the help of digital innovation, data about every project is uploaded on RERA’s website, which is easily accessible. The access to any and every information related to the project and the builder empowers the buyers. It is an empowering mechanism for the citizens. This access to information and the right to make informed choices is the game-changer in the housing sector, says Gautam Chatterjee, Chairman, Maharashtra Real Estate Regulatory Authority (MahaRERA), in an exclusive interview with Harshal Desai of Elets News Network (ENN).
How has MahaRERA encouraged transparency and accountability in the real estate sector in Maharashtra?
MahaRERA is implementing the Central Act called Real Estate (Regulation and Development) Act, 2016, popularly known as RERACertain sections have come into effect since May 1, 2016. But all the provisions of the Act have been made operative from May 1, 2017.
Maharashtra has always been very progressive when it comes to necessary statutes in place to deal with issues that come up in any sector. And in this sector also if you go back to the 1963 Act, that the Maharashtra Assembly had passed, called the MOFA Act of 1963. Even at that time, it had seen the problems the sector was facing, of information asymmetry, malpractices by the developers and within the sector, all these things are mentioned in the Preamble itself. At that time, the Act was implemented to tackle these problems in that sector. Unfortunately, in the implementation, it was found that whenever there is a violation of any provision of the Act, then the Grievance Redressal Machine is not that efficient in the sense that you do not get quick disposal of your grievance.
Another problem in this sector was that, once a real estate project got completed, it is required to be passed on. The ownership of the conveyance is to be given to the allottees, the association, or the society or the legal entity. Based on the problem that was faced, Maharashtra came up with deemed conveyance or the MOFA Act. The problem lied in the fact that the grievance redressal process was not very prompt.
By 2005-2010, there is a very well entrenched IT network that is operating. So the question was how we use Information and Communication Technology (ICT) to have a better implementation and resolving the problems of the sectors.
All these were noticed and the Maharashtra Government started working on a Housing Regulation and Development Act. It went to the Assembly and got approved and went for Presidential assent. I was also associated during that time when this Bill was placed before the Maharashtra Assembly and the Assembly passed it.
By the time that Act could get implemented, the discussion was also going on at the Centre that how can we bring in regulation in this sector through a Central Act. That discussion also went on for nearly a decade and finally in 2014, the present Government came to power and decided to go ahead with the Central Act. This Act was then passed in Parliament and it also stated that it would be good to have a Central Act and if there is any State Acts, that should be repealed. By that time there was only the Maharashtra Act was there. Hence, if you see the RERA Act, Section 92 says that the Maharashtra Act stands repealed.
“With the help of digital innovation, data about every project is uploaded on RERA’s website, which is easily accessible. The access to any and every information related to the project and the builder empowers the buyers.”
This Act also highlighted the same issues and concerns as that of the MOFA Act. Essentially, when you come up with a statute, it is supposed to deal with the problem areas which would further be tackled by the Act.
What were the major issues in the Housing domain as observed by the Act?
It was observed that the issues were the same as those observed during 1963. Firstly, there is information asymmetry. Buyers often lack the basic information about the home in which they are most likely investing their lives’ savings. Second is the trust deficit factor that the buyers have towards the builders. The feeling of being cheated by the builder is a very unfortunate situation altogether. It should be something where you can try and rebuild this trust, that needed to be tackled through this Act. Thirdly, there has to be the assurance that if a housing project is registered under the RERA Act, it must get completed within the stipulated time. Only then it would be a win-win situation for all stakeholders.
What were the measures taken to improve the situation?
Accordingly, we started bringing our rules and authority into place by keeping these three objectives in mind. During that period, 90 percent of the housing projects registered were from Maharashtra.
We have 13,000 ongoing projects which are registered in Maharashtra. Another 9,000 projects are ones that got launched after the RERA came into effect. Moreover, with the help of technological mechanisms, we have ensured that people can report about any unregistered or unauthorised ongoing housing project anywhere in the state. We do a hearing of the case and take the necessary decision.
Today we have over 23,000 projects registered. The total number of homes that would be constructed within these projects is 23 lakh. This is the quantum of homes or apartments being constructed under RERA’s jurisdiction.
With the help of digital innovation, data about every project is uploaded on RERA’s website, which is easily accessible. The access to any and every information related to the project and the builder empowers the buyers. It is an empowering mechanism for the citizens. Today, the citizens are empowered and they can make informed choices about his home. He is no longer guided by the suggestion of any other person about investing in a particular project without having the right to research and get the assurance on his own. This access to information and the right to make informed choices is the game-changer in the housing sector.
What are the challenges of this?
Now the challenge comes in ensuring the completion of all the 23,000 projects. The next challenge, as well as objective, is to ensure that the data related to all 23 lakh homes are regularly updated and it is as clean as possible. The third factor is that the trust factor for the builders or the realtors has to be built, but it has to be done gradually and can’t be achieved instantly.
Solving the issue of trust deficit against builders cannot be resolved just by filing a complaint online and in a quasijudicial manner. For this, we have set up a conciliation forum. According to us, many complaints can arise due to a lack of communication. We have to enable people to communicate and during communication, buyers can get over many ambiguous areas. I am glad to note that we have been proved right. People take their grievances in a conciliation forum which is managed by the association of developers and consumers. They sit together to discuss and bridge the gaps. In this way, nine out of 10 cases in Pune and eight out of 10 cases in Mumbai have got resolved amicably. These are the things that make the implementation of RERA in Maharashtra in letter and spirit.
What about the projects which were commenced before the foundation of MahaRERA? Is it mandatory for them to register as well?
The online registration of projects is mandatory if the project’s construction is still going on, complete and still not completed. There could be certain cases and or even a large number of cases within which a project was taken by a developer around 10 years back but could not take the construction forward. For online registration at RERA, there has to be certain validity, such as the appreciation given by the Planning Commission or the Municipal bodies. They have a validity period. The projects are given commencement certificates or building plan approvals, which need to be acted upon a timeframe of one year. If you do not act upon that, then the approval loses its validity and has to be revalidated again. Essentially, in such cases, the consumers have to get after the developers to see that those approvals which have become dead, have to be revalidated. It is only when the consumer applies to RERA with a revalidation; the Authority would force the builder to register. Without the project approval, one cannot request for registration and endanger the lives of other people. There is brand equity of a project that is registered, and by forcing to register a defunct project would mean a significant risk to other potential consumers.
Does assessing the quality of construction also come under the purview of RERA?
Although quality assessment is not a direct part of RERA, we have implemented it on our own. We have made it a part of the mandatory information that needs to be captured during the ongoing project. From December 1, 2018, onwards, we have mandated the designated site engineer to post about the qualitative aspects of every project in every quarter. The information is about input materials and other processes that go on in input materials be it intermediary or a product like concrete etc., tests carried out to ensure that the materials conform to the industry standards, among others. This process ensures accountability for the professionals involved in the project.
MahaRERA has undertaken certain skilling initiatives. Please share some details about those.
We ensure providing all sorts of information for the buyers since he is putting his entire life’s savings in buying his dream home. Along with getting the possession of his home on time, the buyer also deserves all information about the project, which includes the materials used, whether it’s of proper quality and the materials have been used with proper workmen. This would give the assurance to the buyers that his home has been built by a skilled workforce.
To ensure this, we started focusing on the people who are working on these projects. We came to know that 80 percent of them are unskilled and 20 percent are semi-skilled and skilled. We need to have some accreditation to see that these people have a certain certified skill. To ensure that the people working on the site have the necessary skills, we make them undergo that skilling course and get a certification. That is why we have started and there we felt that major problem would be, who would skill them? For over lakhs of people working on the 23,000 projects, there needs to have a sufficient number of trainers. MahaRERA on its own has taken up the initiative of skilling of expert trainers or certifying expert trainers. These expert trainers would, in turn, go to every project site and train the workers.
How does MahaRERA meet the expenses of training these expert trainers?
There is a Labour CESS which is collected and the Labour Department manages that. We have tied up with them. In Maharashtra, this programme was inaugurated by the then Chief Minister Devendra Fadnavis. The Labour Department is going to fund those training programmes. The initial expert trainer programme is funded by us. When the expert trainers go out, they start training those people on-site in every RERA registered project and the whole expense is picked up by the programme which is run by the Labour and Skill Department.
How will the Self-Regulatory Organisation (SRO) help ensure greater professionalism among the developers?
This is a unique concept and should be adopted by everyone. We are talking about developers who work in their own manner. It was a unorganised and unregulated sector. Anybody who has got land, raw material, money and approval from the planning authorities are eligible to get their projects registered at RERA, but the buyers are at the mercy of the developers as we do not know about the quality of products and materials used in the projects. We are seeing that the distressed customers of those ongoing projects of the past are coming to us and asking all sorts of questions. Who should be held responsible in this case? There are bodies such as Confederation of Real Estate Developers Association of India (CREDAI), National Real Estate Development Council (NAREDCO) etc. who claim to be the bodies and association and are also managing our conciliation forum. They have to take this responsibility to see that henceforth there is professionalism in the sector. Anyone who needs to perform has to be someone who adheres to the basic norms of professionalism and conduct. These can only be ensured when you tell these people that henceforth, from December 2019, if you want to register a project in RERA, you have to be a member of a registered SRO. MahaRERA is the first to ensure that. It has become a mandatory document as per our regulation.
Are there enough members and staff at MahaRERA right now?
We believe in minimum government maximum governance. At present, we are dealing with around 55,000 cases and we do not have a staff strength of more than 50. But we believe that we have performed and I am sure that none of the stakeholders will say that we have not been able to deliver justice on time. This has been possible because we have utilised the digital platform to the fullest. The requisite data is available on our fingertip and that is how it has been working fine so far.
It has been stated that property portals are also supposed to register.
Yes, this is because the Act requires agents to register as well. Certain portals are also facilitating transactions and they should also be held accountable if some untoward incident takes place later. A positive scenario is that we do not have to force the stakeholders to register, but they are doing it on their own. Moreover, the registration gives them extra value in society. The MahaRERA registration gives them the much-valued authenticity and credibility.
What is the role of MahaRERA in the Affordable Housing Scheme?
The demand from the users is mostly for the Affordable Housing. The State and Central Governments are also offering subsidies in the housing projects through the Affordable Housing Scheme. When there is such a large demand for affordable homes, then it is quite obvious that when a RERA registration is to happen, he should then go back to his drawing board and create homes where the mismatch between the demand and supply is minimal. RERA has helped the entire industry to go back and work on projects where there is demand, which is the best thing that can happen. Lesser return and more volume is the order of the day.
How have you transformed the digital platform?
I think it is a brilliant platform. Maha Online is taking care of the digital platform at present and is doing a fantastic job. Earlier it was KPMG, which was out knowledge partner. They were there for the last two-and-a-half-years but now they are no longer associated with us. We have created our inhouse team. It should be the order of the day in the future that every cutting-edge level service that a government or a municipal body or any other public authority provides, should move towards a digital space and solo digital interface and minimal physical interface. If you can do away with the physical interface, and push everything into a digital interface, it will curb red-tapism, rent-seeking behaviour, and corruption. That should be the way ahead.