Indian real estate sector needs regularization

The stock market has SEBI to provide guidelines, define conduct and processes, provide a redressal system for both buyers and sellers and install necessary consistency and standardization. The proposed real estate regulatory body intends to do the same for the Indian property market, which currently presents a rather under-organized picture, Ashutosh Limaye, Associate Director – Strategic Consulting, Jones Lang LaSalle Meghraj said. Further he added, The Indian real estate sector needs regularization, especially in the light of the multitude of local ways of doing business.
He also said, “The body will require builders to provide actual and verifiable figures for area their projects occupy, legal status of the land involved, chargeable built-up spaces, etc. Moreover, it intends to provide a badly-needed redressal system for property buyers. If this authority performs the intended functions efficiently, it can do much to induce confidence in foreign real estate players intending to invest in India and generally eliminate elements that come on the heels of an immature system. Such a body is required to bring about a happy medium between the ways in which real estate business sis done abroad and the way it is done in India. It can give Indian real estate more international credibility and boost investor and actual end user confidence levels.”
Currently, only listed real estate companies are accountable for the ways in which they conduct their business. This is not true for smaller players, and such an agency would make unlisted companies equally accountable. It is definitely possible that a certain number of developers would perceive such regulation as a loss of freedom. In the developer world, there is a huge spectrum of types and scales. At the base of the pyramid are local developers with small scale operations who will need time to get used to the implied processes and systems, which they may not see themselves as equipped for. Such developers would expect to be given a reasonable period to fall in line, which is fair. The regulatory body would be expected to not only provide restrictions and responsibilities, but also to clearly define developers’ rights.
Limaye added, The market needed the wake-up call that the recent slowdown dynamics provided. Developers have now become more introspective and retrospective about certain errors of judgment and ways to do business. While such a body would certainly have been welcome earlier, there is probably no better time than now for it to be put in place. Developers are now in a better position to realize that in the long run, far from being given the short end of the stick, they will benefit equally by increased transparency. One must remember that this regulatory body would ensure the welfare of the industry, which comprises of both developers and buyers.