A lot of flats and other kinds of real estate property remain unsold in India. If you are in the real estate industry, this must be worrying you a lot.
While you strategize your sales pitches and marketing communication, keep in mind the larger laws in place governing real estate. Probably, when you began constructing the property, you hadn’t imagined the recent changes in the law.
RERA (Real Estate Regulation Act) was passed in 2016. Your expectations from the projects you started before 2016 might be different. This law, the slowdown in sales and demand, and the current economic downturn, must help you get a bit more serious about the challenges that lie ahead, especially in communicating your project features and sales propositions.
The act is intended to help the homebuyers and bring about transparency in the real estate sector as a whole. The laws earlier, if any, used to benefit the builders. If the guideline was to sell the property in terms of carpet area, the builders came up with a pricing based on the built-up and the super built-up.
Here are some more points:
1. Because RERA has been extensively covered in the media, people are aware about it. It will be tough for you to advertise and close sales on a property not registered under the Act.
2. You are obliged to deliver the project as per the deadline you’ve promised to the buyers. This comes in the wake of so many builders delivering the projects a generation later! Be careful while announcing delivery dates.
3. If the quality of your project is not good and construction defects begin to show within five years, you are obliged to take care of the damage and undertake renovation/repairs. Honest builders will not only take care of the repairs; they’ll also advertise their own initiatives about it.
4. You’ll need to declare the following on your project literature and RERA website: apartment details (number, type, and carpet area of each), inventory update, approval and compliance, timelines for completing the project, or use of puffery in advertising.
5. According to the Insolvency and Bankruptcy Amendment Bill (2019), you can’t be taken to National Company Law Tribunal (NCLT) by one homebuyer alone. The process will require 100 or 10% of the buyers to come together to take the proceedings ahead. If you have enough goodwill among some of your customers, you’ll benefit from this amendment. Your communication strategy through advertising and marketing is crucial here.
Therefore, be careful about what you convey about your project in your marketing and advertising to your potential buyers. If you exaggerate, you risk action. If you do everything just right, you might be able to earn a reputation that can help you benefit by starting more projects.
Tell us more about how you’ve been dealing with advertising and marketing in the light of RERA and the recent economic downturn. Your inputs can help developers in other cities too.