High interest rates coupled with the economic meltdown led to a substantial dip in sales in the Indian realty market. According to Confederation of Real Estate Developers Association of India (CREDAI), the sector witnessed maximum slowdown in 2008. The drop in realty sales badly impacted the real estate lawyers. However, the situation is expected to revive as the economy gathers steam.
The real estate lawyers verify land documents for customers, who are on the lookout for purchasing land or a flat, and then go through the entire registration process and charge their clients a certain amount for these procedures. During the housing boom, these procedures helped the realty lawyers to earn a lot, but the situation worsened as the chill winds of recession began to blow across the Indian realty sector — a fallout of the global financial crisis.
The realty lawyers who used to charge clients around 1% of the total land value earlier for land registration have cut down their commission percentage to a mere 0.5% at present. This reflects that heady days are over for most realty lawyers who made a neat sum dealing with clients.
Chiradeep Sinha, a realty lawyer practising at Calcutta High Court, says, “Earlier I used to charge a minimum of Rs 5,000 per client who came with documents for legal verification, land registration and other formalities. But with the current slump in the realty sales and the market instability still continuing, I am hardly making any money.”
 Realty lawyers’ pain point
Apart from the downturn in the realty sector, influx of more lawyers in the sector and in the legal profession on a whole have further added to the woes of the existing real estate lawyers. Infact, this has prompted many real estate lawyers to quit their vocation altogether.
“The economic lull has brought about a significant decline in the earnings of those lawyers who exclusively dealt with real estate clients. With more lawyers entering the sector, there is no doubt that many realty lawyers will be forced to a make a sectoral shift or take up petty cases over the coming months,” opines Sankar Das Chatterjee, advocate at the Calcutta High Court.
Q1 sales raise hopes among realty lawyers
The real estate sector in India witnessed a rise in sales in the first quarter (April-June) of 2009-10. The factors that spurred realty sales in the said quarter are — increase in affordable housing, lower interest rates and improved bank credit for the home loan segment. This increase in realty sales renewed customer interest. Big developers such as DLF and Unitechare also aggressively venturing into the mid-range housing sector, thereby lifting the mood of the real estate lawyers across India. “The significant rise in real estate sales has brought a relief to the affected realty lawyers,” says Bimal Sinha, advocate at the Calcutta High Court.
Going forward, the realty lawyers fervently hope that recession will soon be a thing of the past and the activities in the realty sector will pick-up with renewed buyer interest and stabilised market prices. This will escalate the realty business in India, and in turn will eventually lift the fortunes of the realty lawyers. Jeeta Bandopadhyay |
