Moving on to 2021 – A pro-consumer year for real estate

The year 2020 has been a year of trials, challenges and perseverance, as mankind battled a virus that almost brought the world to a standstill. There were several pivotal regulatory and legislative measures for real estate this year. To begin with, the Real Estate (Regulation and Development) Act (RERA) notified in 2017 has already significantly increased trust, transparency and accountability within India's real estate sector, and bodes well for homebuyers. It is forward-looking legislation as it incorporates technology for registration of a real estate project and ongoing compliance. With the pandemic's impact creating a force majeure situation, extensions have been granted, thereby facilitating the completion of projects.

The new Consumer Protection Act was notified in 2019. Under this Act, the definition of 'consumer' includes any person who buys goods, digitally or offline, via teleshopping, direct selling or multi-level marketing. It provides for e-filing of complaints and a video conferencing option to participate in complaint redressal. In addition, the Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020 has been drafted to prevent unfair trade practices and misleading advertisements. 

The Code of Wages consolidates the Payment of Wages Act, Minimum Wages Act, Payment of Bonus Act and Equal Remunerations Act. The Code is applicable irrespective of the wage ceiling and sector and seeks to unify the definition of 'wages'. The Code streamlines the minimum wages where the Central government shall set the national floor rate and shall consider the living standards of workers, time, pieces produced, the skill of the worker and the difficulty of the nature of work.

The Code is a pivotal transformation from the earlier mechanism of only a post-facto complaint and penalty mechanism to having inspectors-cum-facilitators where they shall advise on compliance. It also removes arbitrariness and malpractices via web-based inspection schemes. With respect to offences and penalties, there is substantial rationalisation and proportionality, with an intent to support rather than hamper the conduct of business.

There is a graded penalty system, an increase in the quantum of fines, etc. The Code encourages technology adoption in matters such as mode of payment of wages and inspection procedures, which aim to achieve at achieving its digitalisation goals in governance. It is a well-intentioned piece of legislation and aims to balance the interests of the employer and the employee. It attempts to replace obsolete provisions and inspires confidence in the business community.

The Ministry of Housing and Urban Affairs has introduced operational guidelines for Affordable Rental Housing Complexes (ARHC). Under the aegis of Pradhan Mantri Awas Yojana, ARHC aims to make available sustainable and inclusive affordable rental housing for urban migrants/poor by the aggregation of their demand at a given site.

These ARHCs will ensure dignified living standards with all civic amenities for urban migrants, in proximity to their workplace - either by converting existing Government-funded vacant houses in cities into ARHCs under Public Private Partnership; or by public agencies; or by construction, operation and maintenance of ARHC by public/private entities on their own available vacant land. Economically weaker sections with annual income up to Rs 3 lakhs and lower-income groups having annual income ranging from Rs 3 lakhs to 6 lakhs can benefit from this scheme. 

There are several other incentives which are provided such as exemption under Income Tax of any profits gained on similar lines for affordable housing. There is also exemption from GST at par with rental services of residential premises. Loans are sought to be available at a lower interest rate, and trunk infrastructure up to the project site shall be provided by the State, free of cost.

ARHC occupants also stand to benefit from municipal services that are at par with other residential projects. Developers have been given incentives via a Technology Innovation Grant and 50 percent additional FAR free of cost. Further, the developer can sell or rent the permissible commercial built-up area as per local regulations. These ARHCs would, therefore make available a balanced community life on a rental basis for migrant workers.

The Government of India is clearly driven to ensure transparency for the consumer, speedy redressal of complaints and digitisation for compliance by companies. The government has also tried to address the concerns of all categories of home buyers. With work from home now expected to be the new normal in 2021, a homebuyer can have the confidence that s/he has access to all the information needed to make a well-researched home purchase decision.

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