The proposed regulator will transform the huge Indian realty sector into a much organised one and will uplift the mood of professional brokers, property agents and buyers
The housing sector is largely dependent on the client’s advanced payments, which in most cases end up meeting the entire cost of construction. The approvals in India are mired in Central and state functionaries. The permissions do not come in a single go, thereby resulting in unnecessary delay in the projects. Most developers claim that obtaining an occupancy or completion certificate becomes much more difficult than constructing a building. The whole process is cumbersome and the money involved therein is unimaginable.
The real estate agent community is also mostly disorganised as there is no accountability, hoards of black money and customer dissatisfaction is rampant. But with the passing of the new bill the professional brokers and agents may breathe a fresh lease of life.
Benefits
The proposed bill floated by the Union Ministry of Housing has made it clear that the developers will have to submit details of sanctions and approvals from authorised agencies. Therefore, the role of civic agencies such as municipal corporations, waste management agencies, water, electricity and fire departments would become much more important with the implementation of the bill as they would all be made accountable for the irregularities, if any, in the project.
For the promoter community, the new legislation would mean that no advances can be taken from the customer unless a written sale agreement is in place with project time mark-up, possession date and payment schedule. The developer will also have to provide a bank guarantee equal to 5% of the estimated project cost.
Among several other clauses, it includes that the developer is required to provide the number and size of plots, layout plans, carpet and plinth areas of the flats/apartments. The sale agreement will be considered final and a builder has to abide by it, thereby facilitating buyers. If there is sufficient reason for the builder to cancel such sale agreement then a notice would be served to the buyer and all money taken shall be returned together with bank interest.
Furthermore, the regulator will also address serious issues such as quality of construction, provision of facilities and its pricing, control of built-up area to super area ratio and after-sales service.
Concern
However, the biggest fear that is now looming large among the realty fraternity is that as soon as the regulator comes into force there may be a significant rise in the number of approvals for a developer. Besides, how deeply the regulator will involve itself into the financial aspects of residential realty, office/retail, industrial space and SEZs will be something to watch out for. Now, the question is whether we are creating a more complex body of a red tape bureaucracy or a toothless tiger as a regulatory body?
Ashwani Singh Virk, managing director of Jagson Realtors, a New-Delhi based mid-sized realty firm |
