Will concrete legislation help home seekers?
While industry bodies have devised their own code of conduct for builders, the draft real estate regulatory bill was recently made public for stakeholders comment. Realty sector representatives voice their expectations and apprehensions
The Draft Real Estate (Regulation & Development) Bill, 2011 was recently made public for stakeholders comment and it has elicited a wide variety of reactions ranging from the good to the bad and even the ugly. While home seekers are optimistic that this bill would help resolve the pending issues and enhance transparency levels, builders point out that the government may have come up with a too simplistic solution for what is essentially a complicated industry.
Scope for corruption
Lalit Kumar Jain, CMD, Kumar Urban Development Ltd, shares, "We are studying the provisions and will come out with final submissions to the ministry. We feel this bill can lead to corruption and inadequacy instead of solving the problem of transparency and greater accountability. We do not want any human involvement and make this issue more complicated. CREDAI believes in pure transparency, so we don't require any kind of licensing as it would add on to innumerable sanctions and approvals. Instead we don't mind online registration of our projects. Due to the regulation of this bill prices will increase, as this will create another window of clearance. Apart from this, three years of jail is detrimental to the sector and because of it good businessmen would refrain from entering into this sector. This in turn will affect the industry."
Consider practical hurdles
Shailesh Sanghvi, director, Sanghvi Group of Companies, feels that the regulatory bill can be welcomed only when a proper study of processes involved in the real estate sector is done. "It should consider the approval issues faced by the developers that ultimately result in delay of processes and loss to the sector and the end user. The drafting committee also should comprise of developers to ensure that the voice of the industry is heard. Before implementing the bill, practical hurdles being faced by the sector should be considered. The regulatory bill can definitely bring in transparency and build confidence in the Housing segment customers if the factors mentioned above are reflected upon."
Further project delays
Vishwajeet Jhavar, CEO, Marvel Realtors, says, "We believe that by and large a regulatory authority would be welcomed. However our concern is, with one more regulatory body in the picture, projects may be delayed further. If cash flows are controlled by the Government and not done as efficiently as per the project financing requirements, then it may add financial cost to projects, eventually leading to an increase in property prices. The Bill will increase transparency and accountability within our industry, which will help in the long term. Since Marvel is regulated through Private Equity investments and all our projects are ring-fenced, we do not foresee any changes in our regular way of working."
Need of the hour
Neeraj Gulati, MD, Assotech Realty, opines, "We welcome this move and feel that such a bill is need of the hour. We believe its implementation will ensure that developers comply with norms and follow guidelines while transacting with buyers. It will also enhance accountability of the builders, resulting in better delivery and increasing customer's confidence to invest in real estate. But the bill should also contain clauses for customer regulation. There are numerous instances where costumers do not remit their instalment fees. We should have a bill that is unbiased and benefitting parties on both side of the table."
Protection for consumers
David Walker, executive director, SARE Homes, comments, "The proposed real estate bill to be introduced by the government is a welcome move, as we understand the aim of this bill is to enhance transparency and accountability in real estate transactions. The objectives of this bill resonate with our core values of trust and transparency, which are the cornerstones to building value for our customers and stakeholders. We hope that this bill will also enhance efficiency and competitiveness and provide consumers with added protection".
Provisions protect buyers
Bikram Sen, CEO, ArthVeda Fund Management Pvt Ltd, says, "We welcome the new Real Estate (Regulation & Development) Bill, 2011. It is designed with the intention of bringing transparency to the sector. Most of its provisions are designed with a view to protect the buyer. For most home buyers, especially the middle and low income segment, it is the single largest buying decision of their lives. Besides the buyers, it is also good for the lenders, investors and other stake holders since they would have a more clear idea of what they are investing in or lending against or doing business with. We think the Real Estate Bill 2011 will give a fillip the sector by encouraging more professional developer behaviour and a safer decision making environment for the buyer."
Instilling customer confidence
Mukesh Bhagtani, CEO, Jaycee Homes Ltd., says, "This is a positive step by government and will go a long way in bringing more accountability and transparency in real estate transactions. Given the current market scenario, the bill will help instil confidence among general public and home buyers alike, which is the need of hour. The bill will help initiate best business practices in the industry, thus bringing credibility whilst encouraging regulated growth and development for industry and economy of the country."
Increased transparency needed
Harresh Mehta, CMD, Rohan Lifescapes, feels that the proposed legislation is both necessary and good in intent. It will change the ground rules and dynamics of the business if implemented in spirit. "Increased transparency is really necessary. The proposal to centralize litigation before a tribunal is a welcome move. Actual implementation will depend on the respective states which is different from the other agencies like SEBI and IRDA. It will give much more comfort to home buyers and in the long run facilitate faster growth."
Land related issues
Sachin Sandhir, Managing Director, RICS South Asia, opines that the fragmented and unorganised real estate sector is in definite need of a regulator. However, given that 'land' is a state subject, the establishment of a regulatory authority is a tedious task, basis which there have been numerous ongoing consultations and debates on the proposed real estate regulator.
"RICS appreciates the initiative to further improve upon and facilitate a smoother introduction of the regulatory authority within the purview of the revised regulation bill. Specifically in relation to the Appellate Tribunal, this has been provided for within the new version of the bill and is at a central government level as opposed to the earlier state government level. As the bill leaves it to the discretion of state governments to establish a regulatory authority and rules and procedures in due course, the benefits of the bill would only be seen once the state governments have established their respective authorities, which could take time in setting up."
Dispute resolution mechanisms
Additionally, it seems that consumers will need to file a complaint with the state regulatory authorities first and will be able to approach the Appellate tribunal in cases where they are not satisfied by the verdict of the state regulatory body. This approach could make the redressal mechanism time consuming. Therefore, there needs to be more clarity in the bill regarding the role of the state dispute resolution mechanism and that of the Appellate tribunal at the central government level, Sachin Sandhir feels.
Beneficial to all
Rajiv Sahni, partner, Real Estate Practice, Ernst & Young, feels that it is a well intended bill and can be beneficial to developers and buyers alike, when implemented in the right spirit. The bill's key tenets of setting up an authority and compulsory registration are confidence building measures, which will help attract a larger audience for the developer. Information on saleable area, list of approvals, time schedule for completion help buyers take an informed decision. Increased transparency levels in projects eventually translate to customer delights.
Greater clarity required
"Further, provisioning for allotted money would help developers forecast cash flows better... cost savings will happen with on time completion... benefits everybody. By making sanctioning authorities responsible, approval delays can be controlled and developers will be ensured fair play. Set up of appellate authority is an effective time tested process and representations from many government departments will ensure convergence of diverse views and lend rationality to judgements. However, some provisions like cancellation of registration of developers, punishment for developers for various offenses need to be more sharply defined, so that it does not act as impediment to running genuine business due to harassment," he emphasises.
While industry bodies have devised their own code of conduct for builders, the draft real estate regulatory bill was recently made public for stakeholders comment. Realty sector representatives voice their expectations and apprehensions
The Draft Real Estate (Regulation & Development) Bill, 2011 was recently made public for stakeholders comment and it has elicited a wide variety of reactions ranging from the good to the bad and even the ugly. While home seekers are optimistic that this bill would help resolve the pending issues and enhance transparency levels, builders point out that the government may have come up with a too simplistic solution for what is essentially a complicated industry.
Scope for corruption
Lalit Kumar Jain, CMD, Kumar Urban Development Ltd, shares, "We are studying the provisions and will come out with final submissions to the ministry. We feel this bill can lead to corruption and inadequacy instead of solving the problem of transparency and greater accountability. We do not want any human involvement and make this issue more complicated. CREDAI believes in pure transparency, so we don't require any kind of licensing as it would add on to innumerable sanctions and approvals. Instead we don't mind online registration of our projects. Due to the regulation of this bill prices will increase, as this will create another window of clearance. Apart from this, three years of jail is detrimental to the sector and because of it good businessmen would refrain from entering into this sector. This in turn will affect the industry."
Consider practical hurdles
Shailesh Sanghvi, director, Sanghvi Group of Companies, feels that the regulatory bill can be welcomed only when a proper study of processes involved in the real estate sector is done. "It should consider the approval issues faced by the developers that ultimately result in delay of processes and loss to the sector and the end user. The drafting committee also should comprise of developers to ensure that the voice of the industry is heard. Before implementing the bill, practical hurdles being faced by the sector should be considered. The regulatory bill can definitely bring in transparency and build confidence in the Housing segment customers if the factors mentioned above are reflected upon."
Further project delays
Vishwajeet Jhavar, CEO, Marvel Realtors, says, "We believe that by and large a regulatory authority would be welcomed. However our concern is, with one more regulatory body in the picture, projects may be delayed further. If cash flows are controlled by the Government and not done as efficiently as per the project financing requirements, then it may add financial cost to projects, eventually leading to an increase in property prices. The Bill will increase transparency and accountability within our industry, which will help in the long term. Since Marvel is regulated through Private Equity investments and all our projects are ring-fenced, we do not foresee any changes in our regular way of working."
Need of the hour
Neeraj Gulati, MD, Assotech Realty, opines, "We welcome this move and feel that such a bill is need of the hour. We believe its implementation will ensure that developers comply with norms and follow guidelines while transacting with buyers. It will also enhance accountability of the builders, resulting in better delivery and increasing customer's confidence to invest in real estate. But the bill should also contain clauses for customer regulation. There are numerous instances where costumers do not remit their instalment fees. We should have a bill that is unbiased and benefitting parties on both side of the table."
Protection for consumers
David Walker, executive director, SARE Homes, comments, "The proposed real estate bill to be introduced by the government is a welcome move, as we understand the aim of this bill is to enhance transparency and accountability in real estate transactions. The objectives of this bill resonate with our core values of trust and transparency, which are the cornerstones to building value for our customers and stakeholders. We hope that this bill will also enhance efficiency and competitiveness and provide consumers with added protection".
Provisions protect buyers
Bikram Sen, CEO, ArthVeda Fund Management Pvt Ltd, says, "We welcome the new Real Estate (Regulation & Development) Bill, 2011. It is designed with the intention of bringing transparency to the sector. Most of its provisions are designed with a view to protect the buyer. For most home buyers, especially the middle and low income segment, it is the single largest buying decision of their lives. Besides the buyers, it is also good for the lenders, investors and other stake holders since they would have a more clear idea of what they are investing in or lending against or doing business with. We think the Real Estate Bill 2011 will give a fillip the sector by encouraging more professional developer behaviour and a safer decision making environment for the buyer."
Instilling customer confidence
Mukesh Bhagtani, CEO, Jaycee Homes Ltd., says, "This is a positive step by government and will go a long way in bringing more accountability and transparency in real estate transactions. Given the current market scenario, the bill will help instil confidence among general public and home buyers alike, which is the need of hour. The bill will help initiate best business practices in the industry, thus bringing credibility whilst encouraging regulated growth and development for industry and economy of the country."
Increased transparency needed
Harresh Mehta, CMD, Rohan Lifescapes, feels that the proposed legislation is both necessary and good in intent. It will change the ground rules and dynamics of the business if implemented in spirit. "Increased transparency is really necessary. The proposal to centralize litigation before a tribunal is a welcome move. Actual implementation will depend on the respective states which is different from the other agencies like SEBI and IRDA. It will give much more comfort to home buyers and in the long run facilitate faster growth."
Land related issues
Sachin Sandhir, Managing Director, RICS South Asia, opines that the fragmented and unorganised real estate sector is in definite need of a regulator. However, given that 'land' is a state subject, the establishment of a regulatory authority is a tedious task, basis which there have been numerous ongoing consultations and debates on the proposed real estate regulator.
"RICS appreciates the initiative to further improve upon and facilitate a smoother introduction of the regulatory authority within the purview of the revised regulation bill. Specifically in relation to the Appellate Tribunal, this has been provided for within the new version of the bill and is at a central government level as opposed to the earlier state government level. As the bill leaves it to the discretion of state governments to establish a regulatory authority and rules and procedures in due course, the benefits of the bill would only be seen once the state governments have established their respective authorities, which could take time in setting up."
Dispute resolution mechanisms
Additionally, it seems that consumers will need to file a complaint with the state regulatory authorities first and will be able to approach the Appellate tribunal in cases where they are not satisfied by the verdict of the state regulatory body. This approach could make the redressal mechanism time consuming. Therefore, there needs to be more clarity in the bill regarding the role of the state dispute resolution mechanism and that of the Appellate tribunal at the central government level, Sachin Sandhir feels.
Beneficial to all
Rajiv Sahni, partner, Real Estate Practice, Ernst & Young, feels that it is a well intended bill and can be beneficial to developers and buyers alike, when implemented in the right spirit. The bill's key tenets of setting up an authority and compulsory registration are confidence building measures, which will help attract a larger audience for the developer. Information on saleable area, list of approvals, time schedule for completion help buyers take an informed decision. Increased transparency levels in projects eventually translate to customer delights.
Greater clarity required
"Further, provisioning for allotted money would help developers forecast cash flows better... cost savings will happen with on time completion... benefits everybody. By making sanctioning authorities responsible, approval delays can be controlled and developers will be ensured fair play. Set up of appellate authority is an effective time tested process and representations from many government departments will ensure convergence of diverse views and lend rationality to judgements. However, some provisions like cancellation of registration of developers, punishment for developers for various offenses need to be more sharply defined, so that it does not act as impediment to running genuine business due to harassment," he emphasises.
No comments:
Post a Comment