Regulating Real Estate Sector In India. Can It Be Done? Article

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Regulating Real Estate Sector in India. Can it be done?

When speaking of a competitive, emerging field such as the realFindgharestate sector, one would expect organization and a specific method of doing things.

Author: Ankan

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Real Estate in India is a multibillion dollar industry and it provides employment and sustenance to over a million people who are directly or indirectly associated with it. However, unlike a country like the USA, real estate in India is largely a freelance operation, partially regularized and involving a majority of unqualified and semi-professional individuals. The rapid boom that the real-estate sector witnessed in the early half of this decade caught the government and other regulatory bodies off guard and let in a plethora of unqualified individuals, non-professional practices and a largely localized operations to flood the market. Of course, professional realty companies co exist but their effect is neutralized by a sea of non-regulated operators.

Thus, after years spent observing the situation, the government has finally decided to step into the ring and tackle this colossal problem by its very potent horns. Mere months after the now infamous Noida Extension fiasco that left over 6,000 home buyers in a state of panic, the government is now ready with a bill to regulate the national real estate sector and protect property buyers from opportunistic real estate agents, realtors and developers. This ambitious bill, in cold storage since 2009, provides the government with some serious teeth to counter the nexus of shady developers and degenerative practices and convert the sector into a profitable source of employment and income generation. The government plans to introduce this bill in the winter session of parliament after obtaining the approval of the cabinet.

The salient points of this Real Estate (Regulation & Development) Bill are-

Developers must register themselves with a real estate regulatory authority to be set-up in each state

Developers must submit detailed project specs- approved layout plan, timeline, cost, sale agreement etc to the regulator before launching any project. This information can be accessed by anyone from the regulator’s website

The bill ensures that a margin of safety is afforded to the booking amount. The developer will have to create a buffer fund where a percentage of the money collected from the buyer will be parked to be used for the specific project

Defaulting on contract stipulations or deviation from the original layout plans will lead to the developer being penalized 10% of the project cost or jailed for up to 3 years. In extreme cases, a developer could also lose his/her license

The bill proposes a two step grievance redressal system- the aforementioned state regulator and a legal tribunal at the center. Currently, all grievances are addressed to civil courts which is a time consuming process

Buyers who default on payments will be fined

This bill, promising and productive in its implications has received the support of the general public as well as the measured acceptance from the developer fraternity via ‘Confederation of Real Estate Developers’ Association of India’- which represents over 6,000 developers across India. All that remains to be done is to establish this agreement in solid paper and streamline the real-estate sector, making it an even playing field for the developer as well as the customer.

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Name - Ankan,Emailid - ankankd@gmail.com , website - www.findghar.com

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Regulating Real Estate Sector in India. Can it be done?