Pranay Vakil, Chairman, Knight Frank India
Regulation is required for any industry to function properly and the real estate industry is no exception. The market is being manipulated by the big and influential real estate lobby causing large inequities in resource and product allocation. It is imperative that a governing body such as the Real Estate Regulatory Authority (RERA) comes into force. The RERA which is being lobbied for by CREDAI be an implementer of laws rather than just act in an advisory capacity.
The new Bill should evolve procedures supported by law and ensure the safety of the common man which is severely compromised in the current scenario. The RERA should ensure transparency in new projects by imposing mandatory clearances from the RERA after careful scrutiny from all angles of feasibility and successful implementation.
Basic clearance documents such as the Commencement Certificate and Completion Certificate should be made available to all prospective buyers before the agreement for sale is signed. The RERA should be furnished with all details of the project, credibility of the promoter as well as the availability of resources with the promoter to deliver the project in a time-bound schedule.
Accounting norms for the listed players should be standardised across the industry. It is extremely difficult to judge the financial health of developers by studying their balance sheets. For example the method by which these companies book revenues differ across the industry, some prefer to use the Percentage Completion method while others book revenues on completion of the project. A company might not even stick to the same method every year which makes it very difficult to compare results between periods and between companies as well.
