Real estate developers are concerned that restrictions on the sale of projects not registered under the Real Estate (Regulation and Development) Act (RERA) will hit revenues.
Developers were given 90 days till 31 July to register projects under the new real estate law came that into effect from 1 May. From 1 August, developers can sell only projects with a registration number.
In Maharashtra, more than 9,000 real estate projects had been registered till Monday evening. In Mumbai alone, around 2,500 projects had been registered. These numbers are well below estimates. “According to the Confederation of Real Estate Developers Association of India (Credai), no less than 30,000 projects should be registered in Maharashtra," said a 8 June note from property consultant Colliers International. Last month, Gautam Chatterjee, Maharashtra’s RERA regulator said he expected around 15,000 projects to be registered by the end of July.
Maharashtra was an early mover in terms of notifying RERA guidelines and starting registrations for projects and real estate agents. Karnataka, Rajasthan, Uttar Pradesh, Madhya Pradesh and Gujarat have followed. In total, 15 states and seven union territories have notified RERA guidelines. None of the states that have notified the rules have allowed for an extension of the 31 July deadline for registering projects, though some are believed to be considering.
On Sunday, Goa announced a three-month extension (the state is yet to notify the rules). And even some of the states that have notified the rules do not have all required systems in place.
“RERA’s restriction on sale of any project without registration will adversely affect business cycles and can cripple the entire industry," said Jaxay Shah, president, Credai.
“We will review how many applications are there and how many are left. Details will be submitted to the authority and the authority will soon take a call on its next move," said Vasant Prabhu, Maharashtra’s RERA secretary.
Neeraj Sharma, director, Grant Thornton Advisory Ltd, said the deadline should be extended in states where the systems are not in place .
“You really can’t penalise the developers for not registering when the system itself is not ready .The government has to be pragmatic," he added.