Real Estate Regulatory Bill may become breeding ground of corruption, says CREDAI chairman
Our fear is that those with expertise to handle political influencers will only survive.
Jun 06, 2013
Source : The Times Of India
CREDAI Chairman Mr. Lalit Kumar Jain

 

MUMBAI: Stating that the Real Estate Regulatory Bill approved by the Union Cabinet seeks to whip only errant developers, realtors apex body CREDAI Chairman Mr. Lalit Kumar Jain has expressed fear that it could encourage corruption instead of curtailing the social menace.

Lalit Kumar Jain expressed his views on the subject based on the press release from the Union Cabinet and added that he would provide detailed observation after receiving the draft legislation.

Jain, who is also the chairman and managing director of Mumbai-Pune developer Kumar Urban Development Limited (KUL), said the real estate sector definitely needs a regulator on the lines of the one controlling telecom, banking, stock markets and insurance sectors.

He lauded the intent of the housing minister but said that the discretionary powers for registering or deregistering projects and adjudication by a bureaucrat could become breeding grounds for corruption. Moreover, the provision for criminal prosecution of developers could lead to the exit of professional and qualified developers.

"Our fear is that those with expertise to handle political influencers will only survive, thus leaving the all important industry in the hands of corrupt people," Jain said and called for regulator covering all stakeholders like defaulting customers, the approving authorities and financial institutions that fund projects.

"How can anyone blame the developer if a project is held up due to approval delays or funds for that matter?" he asked.

"CREDAI has worked hard to advise the ministry to come out with appropriate comprehensive Bill with teeth to direct all stakeholders including approving authorities which will protect consumers while enhancing quality environment for the business," he pointed out. Otherwise it will be an added establishment with huge costs, serving no purpose other than adding cost, thereby making tenements costlier.

Jain welcomed the statement of Mr. Ajay Maken, Union Minister for Housing and Urban Poverty Alleviation, that the Bill provides for a uniform regulatory environment to protect consumer interests, help speedy adjudication of disputes and ensure orderly growth of the real estate sector.

"Also, the promotional role of the proposed Regulator like standardization in the sector carpet area, checking money trail and curbing money laundering, professionalism and promoting planned development are music to our ears," he quipped.

On the provision in the Bill for mandatory deposit of 70% of the cost in an escrow account, Jain pointed out: "This is impractical."

The construction cost of the project varies in different markets. For instance, in micro markets as in prime areas, the cost of construction may be around 30% where as in suburban areas it could be a high at 80% of the entire cost elements. The provision should be based on the ratio of the extent of the construction cost so as to ensure timely completion of projects, and prevent fund diversion. Otherwise, the growth in the sector will get arrested as the reality of the day is that funding for land purchase is just not available from banks, thanks to the negative weightage given by the RBI for real estate finance.

He explained that the Bill provides for a speedy and specialized adjudication mechanism to settle disputes by an officer of the rank of joint secretary. This is also not practical since the judicial process is a specialized task and hence an expert of the field only can redress the disputes. Or, it should be left to a judicial officer and not bureaucrats, in any case, who may be influenced by higher-ups or corruption.

The Bill should have aimed at catalyzing domestic and foreign investment into the real estate, thereby contributing to enhance economic activity and increase in GDP growth. Sadly, this is missing, Jain added.

 

Latest Realty News

A regulator to ease your concerns
Jun 06, 2013
MUMBAI: Real estate buyers probably did not have too many options but to seek redressal of their grievances through consumer forums. Even then, buyer agreements were always favourably tilted towards the developer and often against a buyer's interest. Now with the Cabinet clearing the Real Estate (Regulation and Development) Bill, not only will builders' disclosures and transparency on projects increase, it will also allay buyers' fears and concerns, and speedily redress grievances.
The Real Estate Bill only adds to the confusion
Jun 06, 2013
MUMBAI: If anything, the Real Estate (Regulation and Development) Bill is only going to add to the confusion existing in the sector. In any real estate project, there are three principal stakeholders -– developer, consumer and the authorities. The bill has been designed to empower the authorities further. There is little in it for the consumer, as for the developer, his project completion time has just got longer.
Renowned urban planner bats for green building movement
Jun 06, 2013
KOLKATA: Inclusive city planning is imperative for the planned growth of any 'green' township, American urban planning expert Robert Brosnan has said.
CREDAI for maintaining equilibrium between public and realtor
Jun 06, 2013
CHENNAI: Proposed Real Estate Regulatory Bill should maintain "equilibrium" between the realtor and the public besides regulating the entire industry, industry body CREDAI said today.
Plush residential areas in Hyderabad
Jun 06, 2013
The land of the royals, Hyderabad, is familiar to the concept of luxury and opulence. Premium properties are making a comeback in the city. New real estate developers such as Mahindra Lifespaces, Emmar Group, Bollineni Developers Ltd and Aliens Group, among others are active in this segment.
Mira Road-Bhayandar East witnesses max supply of 2BHK
Jun 06, 2013
MUMBAI: Situated in the Western peripheral area of Mumbai, Mira Road and Bhayandar East are amongst the fastest growing suburbs of the city.
Surge in Rs 4-6 cr ultra luxury homes in Bangalore
Jun 06, 2013
BANGLORE: Last year, around this time (mid 2012), the residential real estate price in Bangalore kissed sky high with Rs 33,000 per sq ft for an upscale project on the Vittal Mallya Road. Rough calculations pegged a 8,200 sq ft apartment in the project at about Rs 27 crore.
Wait over, Cabinet approves Real estate regulatory bill
Jun 06, 2013
DELHI: The long wait is finally over. Real estate industry in India will now have a regulatory body. The Union Cabinet approved the Real Estate Regulatory Authority Bill on 4th June 2013. The Bill would cover all developers coming up with a project of 1000 sq meters and above.
Odisha Cricket Association to return AT Group's money
Jun 06, 2013
BHUBANESWAR: Odisha Cricket Association (OCA), in trouble for receiving Rs one crore from the dodgy AT Group for some cricket matches, on Wednesday said it is willing to deposit the money with the state government to benefit small-time investors.
Builder held for Rs 50 crore housing scheme fraud
Jun 06, 2013
BHUBANESWAR: The Crime Branch (CB) on Wednesday arrested a builder for allegedly raising around Rs 50 crore by floating dubious housing schemes. Managing director of Umamani Home Creations Narayan Chandra Nayak had promised inventors lands, on the outskirts of the city, but reneged on the deal.

Latest Realty News Of State

Realty Talk's