“Analysis & Critical study of Impacts of RERA Act, 2016 on Housing Projects in Kolhapur” by IRJET Journal

“Analysis & Critical study of Impacts of RERA Act, 2016 on Housing Projects in Kolhapur”

Neha V. Jadhav1 , Prof. Amit B. Patil2 , Prof. G.N. Kanade3

1M. Tech Scholar, Department of Civil Engineering, Tatyasaheb Kore Institute of Technology, Kolhapur, Maharashtra, India.

2,3Professor, Department of Civil Engineering, Tatyasaheb Kore Institute of Technology, Kolhapur, Maharashtra, India ***

Abstract - For Indian real estate sector has been facing a slump since 2012. In this research project, the study's focus is restricted to the Kolhapur City. We will investigate the impact of RERA on India's building constructions industries in this project. To check the impact of RERA we are dealing with 25 factors for seller and 23 factors for buyer. For the analysis purpose we have made the questionnaire survey. From that we have calculated RII from collected data by using Likert’s Scale. A study is conducted to determine the immediate impact of this act on the Builders and the consumer.

Key Words: RERA, RII, real Estate, Likert’s Scale, Construction

1. INTRODUCTION

IntheIndianRealEstateIndustry'sHistory,TheRealEstate RegulationandDevelopmentAct(RERA)of2016isagamechanging piece of legislation. It was enacted to encourage real estate investment while simultaneously safeguarding the interests of home buyers. The Act promotes ethical behaviorintherealestateindustryandattemptstoincrease openness. The Act covers both new and ongoing projects (whichhadtoberegisteredbyJuly31,2017).Thisstatute covers both commercial and residential construction projects. Agents or brokers in the real estate industry are alsocoveredundertheumbrella.

Furthermore, the developers must report the project designs, government approvals, and the status of the land ownershiptotheregulatoryauthorities.Failuretodosowill resultinafine,jail,orboth,dependingonthegravityofthe offence.TheRealEstateIndustrywasincriticalneedofsuch atransparentsysteminordertopromotemarketmoodand protectcustomers'interests.Thebillalsorequiresbuyersto pay developers within a certain amount of time, failing whichappropriateactioncanbetakenagainstthem.Oneof the most typical challenges in the construction sector is buildingprojectdelays.Delayshaveanegativeimpactonthe project'sperformance,timeliness,andcost.Asaresult,it's criticaltounderstandthedifferentsortsofdelaysthatcan ariseinaproject.Delayscanoccurforavarietyofcauses(or, in other words, have diverse origins); they can be compensated or not; and they can occur concurrently or

afterwards.Inaddition,theimpactonprojectperformance canbedirectorindirect.Theirpresenceresultsinincreased costs, conflicts among project partners, and, in the worstcase scenario, litigation, which may result in more costs. Whendealingwithdelays,it'snecessarytonotonlydetect themandquantifytheireffectsonprojectperformance,but also to identify and quantify the implications of previous delays on future project progress. The key causes and sources of delays should also be identified in order to regulate accountability and allow for learning from these unfavorableevents.

1.1 RERA Act 2016

TheRealEstate(Regulation&Development)Actof2016 proposes to create a Real Estate Regulatory Authority to governandpromotetherealestateindustry.

Thephysicalbodywill–

 Ensure that land, buildings, or projects are sold in a timelyandtransparentmanner.

 Consumers'interestsmustbeprotected.

 Createa methodto ensure thatconflictsare resolved quickly.

 CreateanAppellateTribunaltooverseebothresidential andcommercialconstructionprojects.

2. Literature Review

Shubhangi Salunkhe, R Mahadeva Swamy –Inthispaper, author explains carpet areatermin detail andexplains its impact on RERA. Also explains with the examples. Forthe analysis,authorusesrelativeimportanceindexmethod.For thattheydonequestionnairesurveyandcollectresponsesfor theanalysis.TheyalsomakecomparativeanalysisofRERA approachandtraditionalapproachforonesiteinPunefor thetimeandcostanalysis.Authorconcludethat,buildersare notallowedfakecommitmenttobuyerforpossessiondate

Somdutta P. Patil, Prof. Ashish P. Waghmare – Theauthor analyses the effect of RERA on the real estate business, includingtheimpactonongoingandnewprojects,aswellas

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056 Volume: 10 Issue: 03 | Mar 2023 www.irjet.net p-ISSN: 2395-0072 © 2023, IRJET | Impact Factor value: 8.226 | ISO 9001:2008 Certified Journal | Page99

theimpactonbuilders,purchasers,andagentsandbrokers. Additionally,theyexaminedtheeconomicimpactofRERAon therealestatebusiness.Theyspendthemostoftheirtime studying MahaRERA. They learn about the benefits and drawbacks of the RERA real estate legislation. Prompt possessionofapartments,projectclearance,andafter-sales servicesaresomeofthebenefitsofRERAlistedinthisarticle. Additionally, this report discusses historical challenges, project delays,and other negatives. Additionally,theysaid that this legislation is a step forward in terms of boosting opennessintherealestateindustry,increasingpromoters' and developers' responsibility, and enabling efficient channelsforgrievanceresolution.

Akshaykumar P. Udasi, Milind M. Darade– Thisstudyis dividedintotwostages.Tobegin,asurveyoftheliterature wasconductedtoascertaintheelementsthatcontributeto buildingprojectdelays.101sourcesofdelayswereidentified byaliteraturestudyanddividedintoninedistinctcategories: owner-related,contractor-related,consultant-related,designrelated,labor-related, material-related, equipment-related, andexternalfactors-related,andRERA-related.Additionally, determine their various impacts/effects on the building project. Following that, a questionnaire survey is administeredusingGoogleforms.ThisGoogleformissentto numerous stakeholders in the building business by email, whatsApp, and text messaging. There are a total of ten replies.Graphsinpaperillustratetherelationshipbetween RERAcharacteristicsandthenumberofrespondents.

Suhas G. Awari, Raju Narwade and Manisha Jamgade –Theresearchisdividedintotwostages:aliteraturereview and interviews. The first step entails doing a literature review. As a result of this evaluation, 51 delay factors appropriateforthecurrentinvestigationwerefound.These causes were then classified into eight distinct categories based on their nature and mode of occurrence: projectrelated, client-related, contractor- related,RCC consultantrelated,constructiondesign-related,constructionmaterialrelated, machinery-related, labor-related factors, and external factors. The second step is the creation of a questionnairebasedontherelativeimportanceindexandthe calculationoftheSpearmanrankcorrelationcoefficientfor theimportanceindex.Thequestionnairewassplitintothree sections,whichincludedreasonsofconstructiondelays,their effects,andwaysforreducingconstructiondelays.Thisstudy to identify the effective methods to reduce delays in constructionprojects.

Thorat Sourabh, Khandare Manish, A.K. Kanase – The empiricalassociationbetweenthecausesandconsequences of delay is also examined in this study utilizing Pearson's correlationcoefficientinSPSS23.Additionally,prescriptions for reducing delays were made in this research to clients, consultants,andcontractors.Thepurposeofthisstudyisto determine the causes and effects of delay in residential

construction projects in India and to investigate the relationshipbetweenspecificcausesandspecificeffects.This study employs an integrated approach to ascertain the impact of specific causes on specific effects in residential constructionprojectsintheIndiancontext.Thereareatotal of41causesclassifiedintosevenmaincategories,aswellas seven significant impacts of delay. A questionnaire survey wasusedtoelicitinformationonthecausesandimpactsof delay from clients, consultants, and contractors, with 67 respondents. The study's findings were satisfactory. This research will assist practitioners and scholars in better understandingprojectmanagementandmakingattemptsto eliminatedelaysinresidentialconstruction.

Tibin Joy, B.Selvam -ThisarticlediscussedtheRERAactin depth.Theauthordefinescarpetareaconceptindetail.The author created identical questionnaires for builders and purchasersandconductedsurveystoascertainthereplies.As a result of this regulation, each project must be registered withRERA,whichwillserveastheregulatoryauthority.It willincreaseopenness,astheclient/allottedwillhaveaccess to further information about the project, promoter, promoter's historical experience, and agent, among other things.

3. Methodology

3.1 Objectives:

1. To study the present status & collect the information about chronological event from developmentofRERAtotilldate.

2. Identificationofongoingproblemsinconstruction industry&toanalysesthem.

3. Topreparequestionnairesurveyobtainedthrough builders.

4. Tocarryoutanalysisofvariousresponsesobtained throughliveconstructionprojectinKolhapur.

5. To recommend best suggestive measures for reducingcostsanddelay.

3.2 Research Methodology:

1) Collection of preliminary information through literaturereview.

2) Descriptive analysis by collection of data by questionnairesurvey&interviews.

3) Assessing the current situation of construction industrypertainingRERAeffectsbyquestionnaire survey.

4) Definingproblemsinconstructionindustrythrough surveyconducted.

5) Givingsuggestivemeasuresforreducingproblems throughRERA.

6) Givingresults&conclusionsfromdataanalyzed.

The questionnaire designed by consideration of factors affectingtheRERAactonconstructionindustrythroughpreexistingliteratureandstudiedmodel.Thefollowingfactors areconsideredinthedesignofthequestionnaire.

to relative importance indices (RII) for each factor as follows;Where,

N1=numberofrespondentswhovotedforStronglyNot Effective

N2=numberofrespondentswhovotedforLeast Effective

N3=numberofrespondentswhovotedforNeutral

N4=numberofrespondentswhovotedforEffective

N5=numberofrespondentswhovotedforStrongly Effective

Nistheweightinggiventoeachfactorbytherespondents (rangingfrom1to5).TheRIIvaluehadarangefrom1to5, the higher the value of RII, the more important was the factoraffectingRERA.

2.3

AdoptedscaleisFive-pointscalerangingfrom1(Strongly NotEffective)to5(StronglyEffective)anditistransformed

Considered factors:

Sr.No. BUYER’S FACTORS SELLER’S FACTORS 1 Restrictionsto diversionofmoney Restrictionsto diversionofmoney 2 Propertysoldoncarpet area Punctuality 3 Punctuality Securityofmoney 4 Disputeresolution Qualityofwork 5 Penalties Moreprofitableto buyer 6 Moreprofitableto buyer Transparency 7 Transparency Qualityisimproved 8 Securityofmoney Penaltiesondelay 9 Responsibilityof defects Professionalism 10 Professionalism Disputeresolution 11 Qualityofwork Structuralwarranty 12 UseofICT Nomisleadingclaims 13 Balancedagreement andtreatment UseofICT 14 Nomisleadingclaims Propertysoldoncarpet area 15 Structuralwarranty Advertisingonlyafter RERA 16 Valueofmoney Easyproblemsolution 17 Easyproblemsolution Valueofmoney 18 Hikeinpropertyprices Valueofmoney 19 Easyproblemsolution Authorization 20 Hikeinpropertyprices Realadvertisement 21 Investmentrate Responsibilityof defects 22 Qualityisimproved Harshpenaltiesfor seller 23 Penaltiesondelay Hikeinpropertyprices 24 Investmentrates 25 Supplydemand imbalance

2.DataAnalysisbyusingLikert’sScale

RANK BUYER’S FACTORS RII% 1 Restrictionstodiversionofmoney 82% 2 Propertysoldoncarpetarea 80% 2 Punctuality 80% 2 Disputeresolution 80% 3 Penalties 79% 4 Moreprofitabletobuyer 77% 5 Transparency 76% 6 Securityofmoney 75% 6 Responsibilityofdefects 75% 7 Professionalism 72% 7 Qualityofwork 72% 8 UseofICT 70% 9 Balancedagreementandtreatment 69% 9 Nomisleadingclaims 69% 9 Structuralwarranty 69% 10 Valueofmoney 68% 11 Easyproblemsolution 66% 12 Hikeinpropertyprices 65% 13 Investmentrate 61% 14 Qualityisimproved 60% 14 Penaltiesondelay 60%

Results: Table -1: ResultforBuyer:

Table -2: Resultforseller

4. The land should be free from any type of litigation beforethebeginningoftheproject.Thesellersshould provideallclearancedocumentstotheRERA.

5. For the transparency purpose and restriction for the money diversion, every project has to make separate bankaccountfortransactions.

6. Aftersellingtheflat,thesellershouldprovidestructural warrantyfor5yearsspan.

B. Negative Impact:

1.Registrationbecamemandatoryonlyforprojectswhich are more than 500 Sq m area. But it should be bound to everyseller.

2. Old projects with some litigations are supposed to be delayedbecauseoftherulesoftheRERA

3.Foreveryquarterlyperiodgovernmentapprovalbecame mandatoryforprojectwhichmaybedelayedbecauseoflate workofgovernmentagencies.

4.Registrationfeesincreasedthat'swhyprojectvaluesare rising.

REFERENCES

[1] Aditya V Kadam, Rushikesh R Jangam, Rushikesh R Pawar,AshwiniASagavekar,Prof.G.D.Parulekar,Prof. S.S.Patil,‘DetailedStudyandAnalysisofRERAAct’,

[2] www.irjet.net,Volume:05Issue:04Apr-2018.

Akshaykumar P. Udasi, Milind M. Darade, ‘Delays in construction projects : causes, effects and impacts of RERA’,2018IJRTI|Volume3,Issue7.

[3] Thorat, Manish Khandare, A.K.Kanase, ‘Exploratory Study Of Causes And Effects Of Delay In Indian ResidentialProjects’,Volume:04Issue:06|June-2017

3. CONCLUSIONS

A. Positive Impact

1. Sellers cannot make any false commitment regarding possessiondate.Ifitisnothappenedthensellershould facetheharshpenalties.

2. Sellersneedtomentionallthedetailswhichtheyare goingtoprovideintheprojectaccurately.

3. Thesellersbecamemorespecificaboutthecarpetarea sothatthebuyerscangettheideaaboutforwhatthey arepaying.

[4] Dr.AshishB.Joshi,NishaSingh,‘RealEstateRegulation Act (RERA), 2016: Implementation and Issues’, International Journal of Management Studies, Vol.–V, Issue–4(8),October2018.

[5] MeghwantSinghThakur,‘EffectofRERAonprofitability ofIndianrealestatedevelopers’,InternationalJournalof Management and Applied Science, ISSN: 2394- 7926 Volume-4,Issue-9,Sep.-2018.

[6] Prof. S. G. Rodgi, ‘An Overview of „RERA‟ in India: A RegulatoryShift’,www.rrjournals.com,Volume4,Issue 01,January2019.

RANK SELLER’S FACTORS RII% 1 Restrictionstodiversionofmoney 94% 2 Punctuality 90% 3 Securityofmoney 88% 3 Qualityofwork 88% 3 Moreprofitabletobuyer 88% 4 Transparency 86% 5 Qualityisimproved 84% 5 Penaltiesondelay 84% 5 Professionalism 84% 5 Disputeresolution 84% 6 Structuralwarranty 78% 7 Nomisleadingclaims 76% 7 UseofICT 76% 8 Propertysoldoncarpetarea 74% 8 AdvertisingonlyafterRERA 74% 8 Easyproblemsolution 74% 9 Valueofmoney 72% 9 Authorization 72% 10 Realadvertisement 70% 10 Responsibilityofdefects 70% 11 Harshpenaltiesforseller 68% 12 Hikeinpropertyprices 64% 13 Investmentrates 58% 13 Supplydemandimbalance 58%

[7] 7)S.Radhakrishnan,Dr.K.G.Selvan,‘ImpactofRERAon Construction of Multi Storied Buildings’, International ResearchJournalofAdvancedEngineeringandScience, Volume4,Issue1.

[8] SomduttaP.Patil,Prof.AshishP.Waghmare,‘Impactof RealEstateRegulationandDevelopmentAct(RERA)on India’sRealEstateSector’,2017IJSRST|Volume3Issue 8.

[9] Suhas G. Awari, Raju Narwade and Manisha Jamgade, ‘Analysis for cause identification for delay in building constructionindustry’,InternationalJournalofModern TrendsinEngineeringandResearch(IJMTER)Volume 03,Issue10,October2016.

[10] Tibin Joy, B.Selvam, ‘Impact of Real estate regulation authority(RERA)onresidentialproject’,IRJET,Volume: 05Issue:11|Nov2018.