Submitted by: Gyanaranjan Swain

Submitted to: Sabu Augustine

Guided by: Supratim Pratihar
 IMPACT OF ORERA ON THE REAL ESTATE MARKET OF
ODISHA

WHAT IS RERA?
RERA stands for Real Estate Regulatory Authority came into existence
as per the Real Estate (Regulation and Development) Act, 2016 which
aims to protect the home purchasers and also boosts the real estate
investments. The bill of this Parliament of India Act was passed on 10
March 2016 by the Upper House (Rajya Sabha). The RERA Act was
effective on and from 1 May 2016. At that time, out of 92 sections
only 52 were notified. All the other provisions were effective on and
from 1 May 2017.

WHY IS RERA IMPORTANT?

For long, home buyers complained that real estate transactions were
lopsided and heavily in favour of the developers. RERA and the
government’s model code, aim to create a more equitable and fair
transaction between the seller and the buyer of properties,
especially in the primary market. RERA, it is hoped, will make real
estate purchase simpler, by bringing in better accountability and
transparency, provided that states do not dilute the provisions and
the spirit of the central act. The RERA will give the Indian real estate
industry its first regulator. The Real Estate Act makes it mandatory
for each state and union territory, to form its own regulator and
frame the rules that will govern the functioning of the regulator.
IMPACT OF RERA ON HOME BUYERS
The most positive aspect of this Act is that it provides a unified legal
regime for the purchase of flats; apartments, etc., and seeks to
standardise the practice across the country. Below are certain key
highlights of the Act:

Establishment of the regulatory authority: The absence of a proper

regulator (like the Securities Exchange Board of India for the capital
markets) in the real estate sector, was long felt. The Act establishes
Real Estate Regulatory Authority in each state and union territory. Its
functions include protection of the interests of the stakeholders,
accumulating data at a designated repository and creating a robust
grievance redressal system. To prevent time lags, the authority has
been mandated to dispose applications within a maximum period of
60 days; and the same may be extended only if a reason is recorded
for the delay. Further, the Real Estate Appellate Authority (REAT)
shall be the appropriate forum for appeals.
Compulsory registration: According to the central act, every real
estate project (where the total area to be developed exceeds 500 sq
mtrs or more than 8 apartments is proposed to be developed in any
phase), must be registered with its respective state’s RERA. Existing
projects where the completion certificate (CC) or occupancy
certificate (OC) has not been issued, are also required to comply with
the registration requirements under the Act. While applying for
registration, promoters are required to provide detailed information
on the project e.g. land status, details of the promoter, approvals,
schedule of completion, etc. Only when registration is completed
and other approvals (construction related) are in place, can the
project be marketed.
Reserve account: One of the primary reasons for delay of projects
was that funds collected from one project, would invariably be
diverted to fund new, different projects. To prevent such a diversion,
promoters are now required to park 70% of all project receivables
into a separate reserve account. The proceeds of such account can
only be used towards land and construction expenses and will be
required to be certified by a professional.
Continual disclosures by promoters: After the implementation of the
Act, home buyers will be able to monitor the progress of the project
on the RERA website since promoters will be required to make
periodic submissions to the regulator regarding the progress of the
project.
Title representation: Promoters are now required to make a positive
warranty on his right title and interest on the land, which can be
used later against him by the home buyer, should any title defect be
discovered. Additionally, they are required to obtain insurance
against the title and construction of the projects, proceeds of which
shall go to the allottee upon execution of the agreement of sale.
Standardisation of sale agreement: The Act prescribes a standard
model sale agreement to be entered into between promoters and
homebuyers. Typically, promoters insert punitive clauses against
home buyers which penalised them for any default while similar
defaults by the promoter attracted negligible or no penalty. Such
penal clauses could well be a thing of the past and home buyers can
look forward to more balanced agreements in the future.
Penalty: To ensure that violation of the Act is not taken lightly, stiff
monetary penalty (up to 10% of the project cost) and imprisonment
has been prescribed against violators.
IMPACT OF RERA ON REAL ESTATE INDUSTRY IN INDIA
Initially, a lot of work is to be done to get the existing and new
project registered. Details such as status of each project executed in
last 5 years, promoter details, detailed execution plans, etc., needs
to be prepared. With the advent of RERA, specialised forums such as
the State Real Estate Regulatory Authority and the Real Estate
Appellate Tribunal, will be established for the resolution of disputes
pertaining to home buying and the aggrieved party will have no
recourse to other consumer forums and civil courts, on such matters.
While the RERA sets the groundwork for fast-tracking dispute
resolution, the litmus test for its success, will depend on the timely
setting up of these new dispute resolution bodies and how these
disputes are resolved expeditiously with a degree of finality.
23 states and union territories (UTs) have either established their
permanent or interim regulatory authorities. Under the RERA, every
state and UT must have its own regulator. Developers will not be
able to market their ongoing or upcoming projects, till they register
either with the permanent or interim regulator in states. For ongoing
projects, where completion or occupancy certificate has not been
given, the deadline for registration ended on July 31, 2017. Only four
states – Gujarat, Maharashtra, Madhya Pradesh and Punjab – have
established their permanent Real Estate Regulatory Authority, while
19 states/UTs have established interim authorities, an official with
the Housing and Urban Affairs Ministry said. Only 23 States/UTs have
notified the rules under the Act, while six states have drafted the
rules but have not yet notified. A total of nine states/UTs have
appointed interim Appellate Tribunals under the Real Estate Act,
while only seven states have started the online registration under
the Act.
CHALLENGES IN RERA
The RERA Act is all-encompassing and aims to make the sector a fair
ground for all stakeholders including buyers, developers, promoters
and agents. However, amidst the several positives, the Act is
believed to have certain loopholes.
No rules for delayed project approvals: RERA lays emphasis on
penalising developers for untimely project deliveries. However, a
majority of the delay in execution of projects happens during the
process of acquiring approvals and clearances from various
authorities. Currently, there are close to 50 odd approvals that
developers need to obtain before launching a project. The average
time for acquiring all the approvals can range from 1-2 years. The Act
does not make the government agencies accountable for the delay
and places complete responsibility on developers. It lacks a stringent
policy to force authorities to meet timelines or fasten the process of
granting approvals.
Lack of a single-window approval mechanism: One of the most
significant drawbacks of RERA is excusing Statutory Authorities from
granting timely permissions to real estate developers for their
projects. Since supplementing the project registration application
with permissions from such Authorities is mandatory, most
developers face the daunting task of acquiring approvals from
various agencies. This process is extremely cumbersome and time-
consuming as different subject matters fall under different
regulatory/statutory bodies and municipalities. Consequently, many
developers are not able to apply for project registration for long
periods.For example, environmental clearance is the subject matter
of the Central Government, while encumbrance certificates are the
matter of State governments. A single-window clearance system can
be created to aid developers in obtaining timely approvals so that
they can go ahead with the registration of their project
Lack of strict deadlines: The central government has been lenient
with the states regarding the deadline to draft RERA rules and their
compliance with the Centre’s regulations. Of the 14 states that have
met the deadline, almost all have diluted certain rules, thus,
defeating the purpose of strengthening the real estate sector.
Ambiguity over state-specific content: There are certain provisions
in the RERA drafts of various states that lack clarity. For instance, the
rules framed by Delhi, Karnataka, Haryana, Gujarat, Tamil Nadu, and
Uttar Pradesh do not specify the form and content of audit
certificates to be issued by architects, engineers and chartered
accountants. This may lead to overlapping and duplication of roles of
the various stakeholders and might lead to inconsistent verdicts. A
few states have also failed to give detailed information about the
paperwork and the fee required to be submitted for the registration
of real estate agents.
Lack of technological know-how: The Real Estate Regulatory
Authority of Karnataka, within two years of implementation of RERA
in the State, had identified 1,700 unregistered housing projects out
of which developers of around 700 projects did not respond to the
repeated notices of the Authority to get registered. Some of these
projects are by lesser-known developers located in small cities within
Karnataka where there is a lack of awareness about RERA. Also,
people here may not have the computing skills needed to complete
the entire online registration process by themselves. This example
can be replicated across all non-metropolitan cities of India. The
Central and State governments need to conduct a thorough outreach
program to educate all stakeholders in all small towns about the
project registration process under RERA.

The registration process is too tedious: For instance, there are two
Real Estate Regulatory Authorities in Haryana and both have some
differences in the application process. This makes the application
process quite tedious for developers who have multiple projects in
the State. There are two lengthy forms required to be filled for
registration under Haryana RERA, Gurgaon, namely a detailed project
report and several online forms. Completing these forms becomes
tedious and time-consuming as these comprise of almost the same
information. Several challenges and teething issues exist in the
application process of RERA, and the Central and State governments
should take all the feedback from the market and implement the
same promptly to make the application process more
straightforward and user-friendly.

ADVANTAGES OF RERA
The Real Estate (Regulation and Development) Act, 2016 is aimed at
protecting homebuyers. To this end, it vests power in the hands of
customers to help them make informed decisions, seek solutions and
get the required compensation for any injustice meted out to them
by sellers. Along with making builders accountable for delivery
timelines, the Act offers the following benefits to the homebuyers:
Access to detailed information:The mandatory registration of
projects, developers, promoters and agents with the real estate
regulatory authorities will allow buyers the access to detailed
information on a public domain.
Increased transparency: Easy access to information will give a thrust
to housing demand in projects by established developers and will
eliminate fraudulent fly-by-night players, thus making the market
more organised.
Fair compensation for project delays: The Act will take stringent
action against builders who actively delay projects as this impacts the
financial stability of homebuyers. It imposes heavy penalty on
developers for failing to meet deadlines. Buyers will be entitled to
know the stage-wise time schedule of project construction including
the status of water, sanitation and power. Further, the Act entitles
homebuyers to claim possession of property along with completed
common areas such as parks, clubs, internal roads etc.
Fair pricing and refund policy: The regulation mandates developers
to charge only on the basis of carpet area. This will ensure that
buyers pay for only what they purchase which is expected to reduce
the overall financial burden. In addition, RERA also specifies that if a
buyer wishes to cancel the booking, the developer will have to
refund the amount, along with interest, within 45 days. This
provision safeguards the buyers from inordinate delays in the
refunding process.
Fast-tracking of grievance redressal: Further, the establishment of
an appellate tribunal under state-wise RERA is also a relief to the
buyers who have been troubled due to long-pending cases and
inefficient grievance redressal. The mandate to settle all cases within
a span of 60 days will help homebuyers regain confidence in the
judicial system and reinstate their interest in realty investments.

IMPACT OF ODISHA RERA IN ODISHA

The Odisha Real Estate Regulatory Authority (Odisha RERA) has
shared a list of approved ongoing real estate projects and agents
across the State on its RERA website with necessary details. The
RERA office is located at 371, Vivekananda Marg, Near Bhubaneswar
Municipal Corporation Office, Bhubaneswar. Talking about the
registered RERA projects in Odisha, a total of 360 realty projects
have gained RERA approval. Most of the registered projects are
residential. The Odisha government had notified the Real Estate
(Regulation and Development) Act (RERA) in February 2017. Later, in
October, the government had established Odisha Real Estate
Regulatory Authority (Odisha RERA). Now, Odisha RERA has launched
its official website for registration of ongoing real estate projects and
agents under the Act across the State. On the Odisha RERA website,
home seekers can check all details about RERA registered projects
and agents. You can also check the complaint status on the same
portal.
As per the latest information on the Odisha RERA portal, a total of
113 ongoing realty projects have gained RERA certificates from the
regulatory authority. Talking about the registered agents, the
Authority has given RERA certificates to only 12 agents till date.
More than a month post the registration deadline, the Odisha
government has failed to establish a regulatory body and a website
for registration of ongoing realty projects in the state under the Real
Estate (Regulation and Development) Act (RERA).
DS Tripathy, President, Confederation of Real Estate Developers’
Association of India (CREDAI), Odisha, has stated that the lack of
infrastructure has aggravated the registration issues among
developers and agents. The registrations had commenced only after
31 July as several developers in the state were not well informed
about RERA and its full functioning.
Experts point out that other states have simplified the registration
process by establishing RERA website for online registration and
giving instant registration number of projects. On the contrary, all
applications for registration in Odisha till now have been received
manually.
Further, an extended deadline for registration of ongoing projects
under Odisha RERA has been demanded by developers, owing to the
lack of awareness and unavailability of a proper RERA portal.
PROJECTS THAT COME UNDER RERA
 Every kind of residential and commercial project including
plotted development comes under RERA.
 These projects should be more than8 units or 500 square
metres.
 Any project that doesn't have a Completion Certificate.
 Projects that are only for repair or renovation and don't involve
any re-allotment, marketing, or selling, will not come under this
act.
PENALTIES APPLICABLE UNDER RERA
 According to section 9 (7), Breach of terms for which
registration obtained and registration secured through
misrepresentation or fraud will lead to revocation of the agent
registration number.
 Contravention of section 9 and 10, Penalty of 10,000 Rs per day
will be charged. This penalty comes under section 62.
 Under section 65, Contravention of orders of RERA authorities
will lead to a penalty up to 5% of the cost of the unit sold.
 Under section 66, Contravention of orders of Appellate Tribunal
can lead to one year of imprisonment with a fine up to 10% of
the cost of unit sold

ODISHA RERA APPROVED PROJECTS IN BHUBANESHWAR

Project Developer Configuration

Mahima Plaza Mahima Infracon Pvt Ltd. 3 BHK apartment

Evos Mahaveer Enclave Evos Buildcon Pvt. Ltd. 2, 3 BHK apartment

JB AB Elysium J B Assets Pvt. Ltd. 3 BHK apartment

Evos Bilasini Enclave Evos Buildcon Pvt Ltd 3 BHK apartment

Skytech Infinity Villa Skytech Infraprojects Pvt Ltd 4 BHK villa

Odisha  Udyog 9 Grand
Odisha  Udyog Infra Projects 2, 3 BHK apartment
Avenue

D N Fairytale D.N. Homes 2, 3 BHK apartment

Auroville Narula Homes 4 BHK apartment

Mahadev Griha Nirman

Mahadev Homes  2, 3 BHK apartment
Bhubaneswar

Metro Premia Phase III A Metro Garden Estate Pvt Ltd  3 BHK villa

JPS Sun City JPS Infra Projects Pvt Ltd 3 BHK villa

CURRENT SITUATION OF MARKET AFTER RERA

 The fewer project launches with a higher execution rate.
Builders have focused on the completion of the projects.
 To avoid litigation
 , developers have tried to adhere to compliances.
 Developers have got an escape window due to the relaxed
delivery timelines for ongoing projects.
 The market has now more interested buyers and investors.

SUMMARY
For many years, investors and buyers of real estate projects were
facing issues with the transactions. Because all the transactions were
in favour of the developers and most lopsided. Therefore, the Indian
Parliament introduced this act to create a fair transaction between
the buyer and seller of real estate properties. Every state and union
territory are required to introduce their regulations. Thus, you
should only buy RERA approved projects in India. If you are in Odisha
then you can look for RERA Registered Builders in Bhubaneswar to
get assistance.
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