With the Real Estate (Regulation and Development) Act 2016 (RERA) becoming effective from May 1, 2017 and to comply with the stringent conditions enforced builders to redraw their building plans and finance arrangements.
With the Real Estate (Regulation and Development) Act 2016 (RERA) becoming effective from May 1, 2017, builders are being forced to redraw their building plans and finance arrangements to comply with the stringent conditions enforced by the law.
The law enforces developer to market only those projects, which have received all approvals.
Developers have to disclose all approvals, timelines and master plan for the project before the launch. They have to keep 70 percent of sales proceeds in an escrow account for each project.
The report said that the top developers in Mumbai like Hiranandani Group, Tata Housing Development Co. Ltd and Wadhwa Group are splitting their big projects into different phases to register them individually.
As obtaining permission in one go for a project is hard to come by, developers think that registering each building as a phase as the easiest way to deal with the law.
Builders may face up to three years in prison or heavy fines on violation of law. A builder can register his ongoing project till July 31.Developers are in talks with finance companies for long-term funding to take support major part of the construction.