Rera Chiefs: “Without much ado, start construction at site except Covid hotspots but be prepared for localised outbreaks”

By Namrata Kohli

The issue of starting work at construction sites has been a bone of contention between builders and authorities. In an exclusive webinar with Rera chiefs that took place on Saturday to take stock of real estate and construction industry, developers put forth the main issues they were facing and begun with the stalemate of work at construction sites.
“Forget those workers who have left the town, but let us at least start work with those who are at the site,” said Dr Niranjan Hiranandani, National President-NAREDCO, adding that developers have been taking care of “food, medicines, hygiene, and salaries for the month of March and April. But there is a limit to which this can continue. They have been at the site and willing to work but not allowed to. This is ironical.”

The RERA Chiefs were united in their stance for construction work to be started on ground except at COVID-19 hotspots. According to Dr. Amarjit Singh Chairman–Gujarat RERA, “There should be a careful analysis of hotspots and in the clear spots, we must start work.” The first thing would be to train the labour to follow the best practices in hygiene, safety, sanitising. But be prepared for any contingency. Rajive Kumar, Chairman– UP Rera raised an important point – “Developers should prepare themselves to deal with a situation of second wave of COVID-19 occurring and a localised shutdown at some places.” Nevertheless he said it is imperative to start early but to simultaneously prepare for an outbreak at a few places and act accordingly with a local kind of closure.

In the past few weeks during the lockdown, the real estate stakeholders have been making demands on two fronts- one on the supply side (industry related issues) and other to revive demand (consumption in the market from the customer).

For the sector revival, collective efforts at Government and RBI level are required in terms of reduction in Stamp Duty, GST and home loan interest rates, Liquidity boost, relaxation in interest payments etc. GST on steel should come down to 12% from 18% and cement from 28% to 18%, said builder Prem Kumar.

Steps need to taken for the sector with the highest multiplier impact on the economy. According to K K Khandelwal Chairman–Haryana RERA- “I suggest two measures. A stamp duty reduction and single window clearances can reduce the cost of units by one fifth. We need to not only roll engines but get moving at a higher pace.”

There were suggestions that developers should equip themselves with advanced technology to cut costs, reduce time, improve efficiency of resources and enhance quality of the product. We need to learn from adversity, said Anthony De Sa, Chairman–Madhya Pradesh MP Rera- “Technology should be deployed as much as possible.” He also suggested that the Ready Reckoner Rates (RR) must be revisited again especially after COVID-19 scenario citing the example of MP which slashed RR by 20% to stimulate demand.

The webinar discussed legal clauses such as Section 6 of the RERA Act 2016, allowing extension of project registration by one year with recording its reasons in writing. Said Justice B. Rajendran Chairperson, Tamil Nadu Real Estate Appellate Tribunal, “There is no requirement of a separate Force Majeure clause since the existing clause covers disasters like COVID-19 as “other calamity caused by nature affecting the regular development of the real estate project.”

The silver lining is that people are warming to the idea of booking flats online. “Now everyone will understand online sales and already we are seeing bookings at our portal www.housingforall,” said Rajan Bandelkar, President, NAREDCO- “This has the potential of becoming the Amazon of real estate industry.”

These days the buzzword is Coronavirus and after that it is “Stay home”. As providers of home, the post Covid times may be the best period for the builders, said Bandelkar.

My Take: Life and livelihood go hand in hand. With demarcation of hotspots, most of the working population being young (demographic dividend in our favour in the country as a whole), the demand for utilizing labour on the site is not an unreasonable one. Everything to revive demand and supply must be done. At the same time, developers need to be ready to look beyond just homes and offices and build India – technology is a key lever to improve efficiency – take the instance of China, a country that could erect a hospital within a few days. We need such rapid and agile solutions. Can we start working towards it?

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2 thoughts on “Real Estate Musings

  1. Is it fair for the builders to issue a demand letter during lockdown when people are requested to stay home. Is it a chance to earn interest by builders? I think they must understand that it is a crucial time for all of us!!

  2. Builders should not be raising demand during the Lockdown for payments and I don't think they are (may be a few exceptions). But overall no builder, and no bank is raising demand as RBI has allowed banks to provide a 3-month moratorium on loans and EMI repayments.

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