Vast Improvements Expected in Housing Projects in Lucknow Following RERA

The real estate industry is among the most globally recognized industries. In India, the real estate sector is the second biggest employer after agriculture. It is the sector that directly impacts the overall economic growth of India and market analysts expect the realty sector to grow at 25 percent over the next few years.

However, in the last 7-8 years, it has been observed that property market is not performing up to the mark. There are quite a few reasons behind this, such as number of unsold inventories increasing and sales decreasing, resulting in liquidity crisis, which made builders fall from heights. In 2017, Indian realty market was estimated at INR 5,87,000 crore, but adversely, Rs. 5,82,000 crore were in unorganized market and only Rs. 5,000 crore were in organized market. This led to an increase in unethical business practices and rise in the emergence of unprofessional developers. Moreover, during the year 2000, when the demand for commercial and residential projects increased significantly, builders made rather hasty decisions to make quick money, which resulted in unplanned launches, delay in the completion of projects and liquidity crunch. All this marred the reputation of real estate market in the country.

In a major step towards getting rid of all the ills and bringing transparency and accountability in real estate sector, the central government recently implemented the much needed law, Real Estate Regulation and Development Act (RERA). The RERA is expected to take the regulation of real estate developers in Lucknow to a new level, bringing professionalism, reliability and transparency in business practices, which would protect the interest of buyers as well. Among a bunch of measures included in RERA, real estate builders in Lucknow need to pay 10.9 percent annual interest rate to buyers if the project is not completed within the stipulated timeframe. At the same time, full refund would be given to customers if they do not get timely possession of their property.

Under RERA, developers need to do the following:

• Disclose all the information and details of their real estate projects in Lucknow.
• Register the project with the official state regulatory authority.
• Report quarterly progress of their residential projects in Lucknow with images and even provide details of sales.
• Provide all the information of original sanctioned plans, licenses, approvals, alterations made, total funds obtained from customers and actual money spent.
• Keep 70 percent of unused funds collected from homebuyers for a specific project in separate bank account. Until now, builders channeled their funds to other projects.
• Developers can also charge late payments on customers if they fail to make their payments on time.

Gulam Zia, Director of Knight Frank India, says implementing RERA is a massive bureaucratic exercise, which requires extensive planning and strong will on the part of respective states. First, they need to finalize the changes made in the act, identify right people and set up infrastructure, which again would take considerable amount of time, effort and money.

Once RERA is fully operational, it will certainly bring clarity, accountability and reliability in real estate that had been plagued by red-tapism and corruption. So, if you are planning to invest your money in new or upcoming housing projects in Lucknow, the time is ideal to move forward with your plan.

About the Author: Rajeev is sales and marketing consultant at Azea Botanica, a new residential property in Lucknow being developed by Azeagaia Development Pvt. Ltd., the top real estate development company in Lucknow, promoted by Singapore-based firms through foreign direct investment. Azea Botanica offers 3 & 4 BHK luxury flats in Lucknow at a prime location of Vrindavan Yojna, Raebareli Road. Rajeev has a hobby of writing articles, blogs and likes driving sports bikes and cars.

Rajeev is an avid writer and regularly writes articles and blogs on Lucknow real estate.