Using RERA Websites for project research and shortlisting
How can home buyers leverage the freely available information on state RERA websites before signing on the dotted line.
Real estate has unfortunately been one of the least transparent sectors in India and many property developers used to take advantage of the information asymmetry that existed between the developer and home buyers.
After RERA came into force in 2017, the disclosure standards have certainly improved, with developers now mandated to disclose multiple details about the project from approval stage to construction progress on the respective state RERA authority’s website. You can even verify availability of specific inventory on some RERA websites.
Details of all projects that have not received the occupancy/completion certificate from the municipal authority have to be uploaded by developers and updated on a quarterly basis on the RERA website.
The RERA website is a trove of information that each of us should leverage as a home buyer. There is so much data freely available to undertake basic due diligence without much dependency on the developers’ teams.
Snapshot of project information that can be obtained from state-wise RERA websites
Each state’s RERA regulatory authority maintains their own website for access to property developers, agents and home buyers.
We try to present a broad snapshot of project level information available on these different state-wise RERA websites for home buyer research.
Note: Bengaluru is not featured in the city-wise snapshot table as the Karnataka RERA website was consistently inaccessible (ironic for a tech hub!).
What documents can you commonly access and review as a home buyer?
Most RERA websites allow you to key in the project name or project RERA registration number (found on the project/developer’s website and marketing materials) to access the project page and then review all available documents uploaded by the developer.
1. Regulatory approval documents
You can access and download all required regulatory documents including legal title report, no-encumbrance certificates, approved layout and building permit plans to evaluate the stage of approval for your project.
Most critical of approval documents is the project commencement certificate approval. If this is not found on the RERA website, ensure you get the status in writing from the developer.
2. Formats of allotment letter and agreement for sale/sale deed
Reading the sale agreement draft is a must for any home buyer prior to signing up for a purchase as many caveats which are not likely to be verbally discussed by sales teams would likely be found in the draft.
If you are buying in the early launch phases, it is likely the developer would have just uploaded a declaration stating that the agreement draft is still under preparation. In such a scenario, insist for the allotment letter draft to look for specific caveats intended to be captured in sale agreement.
Maharashtra RERA also requires developers to capture deviations in their uploaded sale agreement drafts from the standard draft prescribed by the RERA authority.
3. Project progress status as authorized by architect and engineer
Developers are required to upload project progress validation certificates by the developer’s appointed architect, engineer and chartered account. Architect certificates validate construction completion stage, engineer declaration even covers the quality aspects (though unreliable from a buyer stand point) and CA declarations validate cost spent on the project till date.
Image: Engineer’s validation certificate on work completion on cost incurred basis, extracted from an actual project.
The work done percentage is a good indicator of project progress. For example, two years after work on a project is commenced, if 60-70% of the project cost incurred is validated in the certificate, it offers comfort that the project progress in on track. Remember the construction spends are not linear and mostly front-loaded. Assuming a typical residential project construction spans over 4 years, ideally at least 60% of the spends should be incurred in the initial 2 years.
4. List and availability of inventory in the project
RERA websites allow you to see tower-wise typology-wise details in a project. Developers are also required to upload cumulative sales status of different unit sizes, their overall availability and their current sales status.
Gone are the days when developers used to hoard inventory by telling you that it is all sold out. You can actually verify the available inventory for your unit size and ask the developer why it is unavailable for you as a buyer.
Maharashtra and Gujarat RERA takes this one step further by asking developers to upload sales status of every single apartment and not just by unit size. This is excellent for home buyers as you have the entire inventory availability for your choice. This eliminates information asymmetries and offers a level playing field. Unfortunately due to this very fact of diminishing information asymmetry, only a few developers seem to be uploading this detail on sales status..
Image: Apartment wise sale status and date of registration is required to be uploaded on Maharashtra RERA.
5. Current construction status
This section breaks down the construction status into parts starting from excavation to plinth completion, number of slabs constructed in super-structure, block work inside units and finally the finishing works broken down – plumbing, flooring, electrical works, painting, etc.
This offers a detailed understanding of every project’s construction stage and help shortlist projects basis this initial research.
UP RERA website takes this one step ahead by asking developers to upload quarterly construction progress targets until completion.
This is a much needed intervention, considering number of stalled residential projects in Noida adding to plight of home buyers in the region. Disclosure does not guarantee delivery though, especially going by the track record of NCR-based developers.
6. Joint development /JV/ redevelopment agreement
Given the land-scarce nature of many of our tier-1 cities (artificially induced scarcity in many cities) and the low risk appetite of developers, joint development agreements (JDAs/JVs) are the norm for many residential projects. In cities like Mumbai, redevelopment is one of the larger types of new projects launched.
Maharashtra RERA mandates developers to upload the joint development agreement between the partners who have come together to develop a project. This is a critical document to review and understand roles and responsibilities and financial stake of each of the parties involved.
Image: Sample Joint development agreement section on Maharashtra RERA. No reference to following text.
Typically in any JDA/JV project, there is one developer who owns the land and typically secures regulatory approvals for construction (say the shadow developer) and one developer who is a more trusted brand responsible for project design, execution and marketing (the face for the home buyer and the brand being marketed).
The structuring of these agreements and subsequent performance of respective duties by these partners is crucial to project delivery for home buyers.
As a home buyer, one needs to be extremely cautious about the developer-partner who works behind the scenes – his ability and intent to meet his obligation will be a make or break for the project.
In Mumbai’s Ghatkopar suburb, a consortium of 4 real estate developers and a financial entity came together in full strength to develop a large residential project in over 100 acres of land, way back in 2013. The project was committed to be delivered in 2018. A decade after the project launch, the development is far from completion and hundreds of home buyers have no option left but to create social media groups and plead the authorities for action.
More the number of joint development entities involved, the riskier it is for the home buyer as this throws up more opportunities for passing the parcel during execution. If anything goes amiss in the execution, even one partner’s lack of intent or ability to course correct can hamper the whole project for years altogether.
7. List of consumer complaints and RERA response
Any customer complaint about the project and subsequent RERA authority verdict have to be captured by the developer on the RERA page of the project. This gives good insight as a home buyer to understand if there are any issues ongoing with the project or developer.
Common complaints listed typically include buyers disputing any forfeiture of initial token deposit by development as the buyer has withdrawn/cancelled their booking. These are typically found in most projects. However, one needs to watch out for any other major issue that has been highlighted in these complaints.
Some RERA websites also capture the list of civil cases pending with respect to the project or the land. It helps to engage a legal associate to review these and clarify queries with the developer before signing up.