HDFC chairman Mr. Deepak Parekh has advocated the need for a real estate regulator in an attempt to protect the interest of property buyers in the country.
In his letter to HDFC shareholders, Mr. Parekh has written, “The real estate sector has been growing rapidly and is a sensitive sector given its strong inter-linkages to other industries in the Economy. I have advocated the need for a real estate regulator, though I understand this proposal has been met with stiff resistance from certain members of the developer fraternity. Though land is a state subject and would therefore require regulators at each state level, there can be a mechanism whereby there is an apex national body, which can oversee the functioning of state-level real estate regulators.”
Mr. Parekh has written that developers rarely offer any warranty for the flats and in case of disputes, consumers have only the consumer or civil courts as recourse - both of which may take ages before a case can even come for hearing. Delays in handing possession of the property to a purchaser have become the order of the day. Needless to say, the developer community is free from any liability in case of any delay.
He wrote, “The Indian housing market may have saved itself from the contagion effect, but this should not relegate the need to advocate transparency in the real estate market.”
He further stated, “Stimulating a rental market will go a long way in providing affordable housing. Developers need to be incentivezed to build rental accommodation”.
Parekh conveyed that the subprime crisis has also brought to light the fact that there is no substitute for cautious and prudent lending. The basic tenets of home financing are simple - lending must be done according to earning capacity, which is on a cash flow basis and not on asset values.
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Builders and developers are not averse to the idea of a regulator in the real estate sector.Confederation of Real Estate Developer Association of India (Credai) president Kumar Gera said that developers want a regulator to discourage the unscrupulous players from entering the sector.He said that Credai has made a number of representations to the government in this regard. He said that the real estate development industry is fragmented and there is no pre-qualification, resulting into entry of fly by night operators in the sector.He said, formation of a regulatory body should not end up creating another layer of controls and licensing, which would promote corruption.President of National Real Estate Development Council (Naredco) Rohtas Goel concurring with the view said that government should first draft a regulatory act, with the consultation of real estate body. The regulatory act should be adopted by all states. Goel said that in the competitive era, developers while selling their project promises a number of things to its buyers. But some times, he might not be able to deliver those things on time because of changes in the law or delay in getting permission In that situation, there are cases when customer refuse to pay to ask for damages. If there is a regulator, he said, genuine builders can seek redressal in that situation.For more view- realtydigest.blogspot.com
The Union Government will set up a regulator to address builder-consumer complaints in Delhi in six months, the Union Urban Development Minister, Mr Jaipal Reddy, said
The regulator would take up complaints such as “cheating”. “Small consumers need protection and builders clear titles,” he said. “The regulator would be set up with the backing of a model legislation,” the minister said.