Time for a realty regulator?

Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} Endusers have for long demanded a real estate regulator to safeguard theirinvestment. But, many developers are against it, arguing that they may betargeted, and that the regulator would only add to red tape Areyou a victim of delayed projectby developers ? Where do you turn to? Do you thinkthere is a need for a real estate regulator in India? Developers are wary ofthis as they feel a regulator will be particularly harsh on builders as againstother stakeholders. KumarGera, president of Confederation of Real Estate Developers 'Associations of India (CREDAI), voices his skepticism: "There is no harmin having a regulator, provided the objective is to ensure that all partiesresponsible for the successful completion of a real estate project fulfil theirrespective obligations. The parties I refer to are the developer, the localauthority, the service providers, the purchasers, and the financing agency. Itis only when all these parties do what they are obliged to do that a projectwill be successful. If any one of them fails, the desired result is notachieved. Hence, all responsible parties need regulation under the same act orbill. If this is not done and only a developer is targeted, the desired resultscannot be achieved and it will be one more bottleneck in the system." Ashiana'sVishal Gupta reiterates this point and says that this will only create anotherlevel of authority leading to more delays, red tapism, and higher cost, whichwill be ultimately counterproductive for end users. He says that by doing this,we are challenging the competence of existing authorities who regulate real estate at local level, as now, every developer needs to get his project planssanctioned, land use changed, get license for construction, follow buildingbylaws, and get a commencement and a completion certificate. He suggests thatinstead of a regulator, we need a fast track consumer redressal court wherejustice is dispensed, as real estate investment is the single largestinvestment a person makes in his lifetime. Givinganother perspective, RE/MAX (a global network of brokers) India's Samir Choprafeels that a regulator would help eliminate anomalies in the existing legalsystem due to multiplicity of authorities and procedural complexities. He saysthis federal regulatory body cannot hold responsibilities like providingguidance on policy framework, resolution of stakeholders' concerns, andconsumer rights' protection. "Broadly, an independent regulator withclearly set guidelines and directives to follow will ensure fair competitionand protect the interests of builders, brokers, investors, and above all -consumers. The model regulation could have a quick redressal mechanism for real estate industry ,which is often faced with a litany of disputes." Someindustry insiders also feel that having a regulator may not solve the problemand there are enough regulations at present. According to Sharad Jhingan, COOof Pvt Equity Fund at Lanco Infratech Ltd, "The real issue is enforcementand enactment of regulations." He adds that there are several regulationsfor a lot many things now, despite which real estate developers have major timeand cost overruns in their projects. Besides, they continue to violate norms byindulging in pre-launches or assuring a fixed return on investment, therebyacting more as NBFCs (non-banking financial companies). Cutto the consumers, and they badly want someone to lend a voice to their woeswhen they are at the receiving end. According to an MNC executive, ManishKhurana, "We people put all our savings into a property ,which can turn out to be a big risk in this highly speculative market. Its hightime real estate sector got organized and our rights protected." Consumersfeel a regulator will not only lend a voice to consumers, but also help increation of a more transparent market and hold developers accountable.According to Akash Kapur, an investor: "When telecom, petroleum and civilaviation industry are doing well with a regulator - the end user is abeneficiary. Also, it provides a level playing field for market players. It'shigh time the real estate industry is regulated." DeepakParekh, chairman of HDFC, has been very vocal about a regulator. He feels thatthe regulator's primary role should be to ensure adequate consumer protectionin any case of real estate fraud. Today, the only recourse a consumer has iseither a consumer court or a civil court, both of which can take ages before acase even comes up for hearing. Thus, there is a need for basic consumerprotection for an individual's largest investment in a physical asset . Drawinga simple parallel, Parekh says that a person who sells you a mutual fundproduct, irrespective of the amount invested, has to be registered with theAssociation of Mutual Funds of India and has to clear an advisory module exam.Similarly, insurance agents have to be licensed and go through mandatorytraining and an examination under the auspices of IRDA. But when one buys ahouse, there is no regulator to ensure that the transactions are in order. Allthat a common man relies upon is good luck and trust. Aregulator needs to ensure best practices and transparency within the sector.For instance, the regulator can mandate that all apartments be sold only on the basis of carpet area and not super-builtup area. Further, the realestate regulator can ensure that projects are completed on time and cleartitles are given to consumers. Thenext question which arises is that since real estate is a state subject, will aregulator have to be set up at the state level. "Admittedly, thelogistical challenge with setting up a real estate regulator is that it willhave to be done at the state level. Again, at the state level, there will be aneed to coordinate with municipalities and other local bodies. But even if eachstate has its own regulator, there should be a national body that will promotebest practices and oversee the functioning of the state-level real estate regulators .Citing a relevant example, he says it happened with electricity. How did somany states agree to break transmission, distribution and generation chain?Initially, only one or two states were willing to do the trifurcation, the restwere not. Again, it happened because the Centre promised states funds underAPDRP (accelerated power development and reforms programme), if they wentthrough the trifurcation. When there is something like that, states comply,because they want cheaper money or they want grants or something. The samemodel as in electricity, where you have the Central Electricity Authority andthen the state regulators, can be adopted for real estate, “says Parekh. Courtesy:-ET Realty dt:- 05-Mar-2010 For more information regarding apartment in mumbai, bedroomapartments, buy property in india, commercial complex in india, commercial realestate, commercial space in mumbai, dealers, flats for sale, indian real estateinvestment, investment options in real estate, luxurious flats, malls, officespace, office space in mumbai, online real estate, penthouses mumbai, plots,property consultants, property in mumbai, property india, property investment,real estate company, real estate developer, real estate mumbai, real estate inindia, real estate investment strategies, real estate market, real estate news,real estate portals, realtors, realty, residence, residential real estate, sellproperty, shop, villas, Residential Apartment   Visit    www.zameen-zaidad.com             www.propertycafeteria.com

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  End users have for long demanded a real estate regulator to safeguard their investment, saying that it is the single largest investment a person makes in his lifetime. But,...

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