Welcoming the RERA (Real Estate Regulation and Development Act, 2016), which will come into full effect from May 1, developers on Friday, however, raised concerns over the registration of "existing projects" under the act.
They also said the construction cost will likely to go up close to 10 per cent after the implementation of the act, which aims at protecting the interest of home buyers.
"As per the law, one has to register the existing projects. But it is disputable area. We are trying to convey to the government to exclude the existing projects and to concentrate on new projects only," CREDAI Bengal President Nandu Belani said.
The new act clearly lays down that projects for which completion certificate has not been issued cannot be considered as completed projects, said Girja Choudhary, whole-time Director and CFO Emami Infrastructure.
"Developers have to maintain the escrow account for these projects. It would be good if states adopt what Uttar Pradesh government has notified about some exemptions about existing projects," he said at an event organised by Bengal Chamber of Commerce and Industry and MACJ.
So far, only 13 states and Union territories have notified rules under RERA while others have prepared draft rules, Choudhary said.
However, developers say price-rise is expected after the implementation of the act.
"Compliance and finance cost will definitely go up. After the implementation of RERA, the construction cost will rise close to 10 per cent," Belani said.
New launches of real estate projects are expected to come down during the transitory period, Belani said, adding that transitory phase after the implementation of the act will be "painful" but "long term benefits are immense".
"Builders cannot sell without registration in RERA," he added.
However, home inspectors or independent auditors are hoping the exercise of third party audit will be part of regulatory framework in the next two years' time, said MACJ- A Buyer's Choice Home Inspection director and CEO Mahendra Sureka.